Last week, I had a conversation with an investor looking to invest in an unnamed digital agency. He seemed like a genuine guy, though his intentions were clearly financially motivated–obviously a good thing for an investor–but there was a thorn in my side from the start of the conversation. I knew I was speaking to a potential competitor, albeit a complete newbie to the industry, and he only had one goal for this chat: extract as much industry knowledge out of me as possible for his own gains. I should have dismissed him, kept my mouth shut, and politely sent him on his way.
But I didn’t do that. I’ve been waiting a long time for a conversation like this, and Bob just happened to catch me at the right time. His name wasn’t Bob, but let’s call him Bob.
This is not Bob
The call with Bob came at a critical time for me. I’d recently attended several meetings with potential clients about possibly working together. These meetings ended well, but they started off in the same predictable manner, with one particular reservation that I’ve heard often enough to make the title of this article:
“I’m not interested. I’ve worked with agencies before and had very bad experiences”
Unfortunately, I’m forced to spend the first 30 minutes of what should be a positive and productive meeting defending myself against other people’s charges.
It’s frustrating, but completely understandable.
Bob needed to hear how it really is, and how it should be done. Granted, it would have been far more sensible to be more coy, but I felt that it was ‘for the greater good’ that he knew my true feelings. If I can help it, I will not accept another bit-part player in the industry who’ll potentially drag it down another notch in the eyes of those I aim to help.
This is not just for Bob and his ilk; I think everyone should hear the truth, especially my current and future clients, so I’m happy to risk offering some genuine inside info to all and sundry if it means that just one person I speak to about partnering with my company reads this and becomes a bit more clued up about the industry.
What I Should Not Have Said
Here are a few things that I probably shouldn’t have told him about some ‘standard’ agency offerings, lest he think this is the best way to approach the field. I described, with disdain, how there are two types of agency: sales focused and client focused.
- A sales-focused agency will likely turn a good profit. It’s far more difficult for a client-focused agency to see high margins
- 12-month contract periods are often the norm, securing recurring revenue regardless of results
- By the time the client finally finishes their contract and probably elects not to renew, you can have two or three more clients lined up to take their place
- Agencies can get away with having just a little bit more knowledge than the client and still sell a deal to them
- Package deals can be sold at a low cost with high margins. They are easier to sell than a customised strategy because they’re much cheaper for the client and much easier for the agency to manage
- Sales-focused agencies can make great margins by outsourcing their workforce offshore
- Most SMEs know they need SEO, but aren’t willing to spend a lot of money. They’re prime candidates for a cheap and quick deal
- You can run a profitable agency purely by focusing on the quantity of clients you bring on board, and nothing else (results included)
- Marginal benefits can easily be disguised as ‘real results’
- Promises of high keyword positioning within a short timeframe look very good, and are much easier to sell than customised strategies with relevant KPIs
- One-size-fits-all models are very easy to scale
A golden ticket for any investor, right?
And here’s what I told him is likely to happen if he opts for the above:
- Clients embark on the campaign with uncertainty and suspicion
- Before long, the client will be scrambling around looking for the results they were promised, and won’t find them
- The client’s relationship with your agency will deteriorate, and they will become angry at the amount of time remaining on their contract
Your agency can react by devoting just as much time to holding clients to their contract as you did in coercing them into the original deal.
Sell, sell, sell > collect the debt -> repeat
Absurd, isn’t it? I’m surprised it’s not criminal. Yet, not only is it possible, it’s an actual business model that is deemed a good option for some! The trouble is that many agency execs don’t care. They’re happy and safe in the knowledge that when a client cancels, they have two or three ready to come and take their place.
I tried to sense Bob’s response, but he was more eager to listen further than to offer comment. A hint of surprise, perhaps, that I didn’t seem to endorse this model.
Here’s my role in all of this:
- Client loses money and vows never to hire an agency again
- Vine Digital offers to help client, and Richard spends far too long apologising for his industry rather than engage in a positive and productive conversation
I should have left the conversation right there, alluding to high margins and scalability and other buzzwords which I’m sure were careering around his cranium, safe in the knowledge that he’d just become ‘one of the rest’. At least I would’ve known he’d be no competition to my company.
That’s what I should have done. I really shouldn’t have gone into detail about how Vine Digital does things. It’s completely private information, and is the foundation of our own business model, and Bob didn’t deserve to hear one measly morsel of it.
But I owe it to my clients, past, present, and future to get this out there. I owe it to the genuine players in digital marketing, of which there are certainly a few out there. It was my duty not to unleash another pretender into the industry. I knew it was the right thing to do.
I’m also safe in the knowledge that our model is bloody hard to execute, requiring a galaxy of stars to align for it to be a success. No amount of investment capital can buy it, and nobody can steal it, no matter how much information I divulge. It requires a genuine desire to do good, and that’s not something that can be sourced: it must come from within, and if other genuine competitors reading this have got it, then all power to them.
Here’s how we do it at Vine Digital. These are our foundations and core principles to our model. The pros and cons are designed for Bob, the guy looking to decide whether or not to pump his money into a digital agency:
- ROI-driven (aka “making money for the client”)
- Success is tangible
- Campaign success is synonymous with business growth for the client
- Success feeds staff morale and a desire to keep succeeding
- Risky business model for Vine. If we don’t deliver, we lose a client, and we lose morale
- In some cases, in can be quite hard to provide ROI. Especially when you can only affect a small part of the business. It’s entirely possible if you know what you’re doing, but you’re setting the bar as high as it can be
- No Contracts. We prove ourselves month in, month out, and a client can cancel at any time
- Complete safety for the client
- Vine must deliver great work and achieve results. We’re completely accountable each month
- Risky business model for Vine. Zero certainty of recurring revenue
- We spend time with our clients. We listen, then listen some more. We offer lots of ad-hoc advice and strategy
- Client acquires a true ally and advocate of their business
- Transparency allows for accurate and tangible targets and results
- Vine becomes intimately involved with the client’s business, and learns to share their desire for success, which permeates across both businesses and the campaign itself
- Relationships develop which allows for longevity in the campaign; essentials for the success of both parties
- Lots of man-hours
- Lots of unaccountable hours spent on client calls and in meetings
- Quality Above Quantity: Services, Client Numbers, Staff Skill
- The highest level of service possible
- Maximum amount of attention given to any one client
- Hugely resource intensive for Vine
- Expensive staff
- Expensive services
- Very difficult to scale
- Data-driven. No Vanity KPIs
- Full transparency between Vine and client
- Success or failure is immediately apparent
- There’s nowhere to hide. We win, or we lose
So, go ahead, Bob, take a long look at how we do things. I’ve given you two options at extreme ends of the spectrum, and you can decide your place between them.
To My Clients, Past, Present, and Future
You know you need to focus on digital. You know that it’s very difficult to build a multi-skilled internal team, and you know that there are some agencies out there that can help you. Please, for the love of God, make a wise choice, and don’t fall for what seems like a cheap and easy option.
If I meet with you and you’re put off by the cost of our services, then I sympathise with you and I totally understand that it seems like a risk. But you’re also going to get this article e-mailed to you, and hopefully, you can be dissuaded from opting for a cheaper deal.
Whichever sounds most appealing, I can help you. If you like option A, I’ll give you Bob’s number because he seemed to be an ‘option A’ kind of guy. I can also supply you with a very long list of other wannabes. If you like option B, give me a call. My mobile number is 0497669228.