With a recession looming and panicking many digital agency founders, not all of the news needs to be doom and gloom. In fact, many of the world’s largest companies were built during recessionary times, and particularly within the digital space, opportunities abound to actually grow amidst a recession rather than fearing a crash.
The key to not only surviving a down economy but emerging stronger is in planning and execution. Fear and emotion should be replaced with objective planning and intention. Charles Gaudet, CEO of Predictable Profits, is one of the most renowned coaches to agency founders and has a track record of helping them build massive businesses, even in turbulent times. We caught up with him for his playbook on how to turn a recession into a period of massive business growth.
What unique challenges do agencies face in a recession?
Charles Gaudet: Today’s buyers are more discerning. They spend more time researching, exploring, and evaluating options.
Plus, with budget restrictions, your competition is no longer other agencies. Instead, it’s anyone vying for your potential client’s attention.
Agency CEOs are already seeing the effect of these challenges in the sales pipeline. Deals now take longer to close, prospects are ghosting, and executives keep lowering revenue targets.
However, this isn’t the case for all agencies — only those that haven’t adapted to a more discerning buyer. At Predictable Profits, we help agencies scale sales pipelines with strategies that factor in:
- Buyers buy on their own time (so it’s critical you stay top of mind).
- Buyers need information to make smart decisions (so make relevant details available to them).
- Buyers must know why working with you delivers an experience that differs from any other agency or tactic they previously tried.
What mistakes do agencies often make when trying to grow during a recession?
Gaudet: The biggest mistake is thinking that price is an issue for buyers. This often leads to discounting services, resulting in tighter margins. It also forces your potential clients to focus on the price of doing business with you rather than the advantages you provide for them.
The next common mistake is placing too much emphasis on bringing in new business. When agencies do this, it directs attention away from existing clients, creating an increase in churn.
And, finally, the third mistake is pulling back on marketing and advertising to cut costs. Committed digital agency CEOs see a recession as a time to grab market share and drive new growth. This requires you to do more marketing and advertising because your competition is usually cutting back.
What can be done to maintain client retention during a recession?
Gaudet: First and foremost, position your agency as a “must have” rather than a “nice to have.” Clients need to know that they would be worse off without you. So remind them of the advantages and/or return on investment of working with your agency. It also doesn’t hurt to point out the challenges they face without you.
Another way to maintain client retention is through quality relationships. Create client experiences that inspire loyalty to your agency. Buyers are less likely to cancel their contract when you have a strong relationship with them.
What is the key to continuing to grow revenue when the economy is slowing?
Gaudet: Economies are neither good nor bad — they’re just different. The key to growing revenue in a slowing economy is a willingness to adapt. You can’t use the same strategies and expect different results. Your strategies must evolve to match a more discerning buyer.
For instance, you may need to adjust your messaging to reflect current pressures or concerns. You may also have to change terms to provide greater flexibility for buyers concerned about long-term contracts or heavy upfront charges.
The fact is, your target audience is different now. Since they’re more selective, appeal to their need for knowing why your services are a “must” and how you compare with competitors. You can do this by sharing the pros and cons of what you offer, as well as providing buying criteria that prospects can use when researching digital agency options.
Other helpful resources for today’s buyers include case studies, reviews and data that supports using your services. You should provide as much information as possible upfront — including answering all objections — without requiring prospects to contact you.