The pace of digital is increasing, clients are more demanding, not less, and budgets are still decreasing—how can you scale an agency in this ever-changing landscape?
The digital marketing industry is unlike any other I’ve experienced in financial services, telecoms, and construction.
The only word I can think of to adequately describe the pace of change is ‘nauseating.’
It’s hard enough to keep up with corporate and legislative changes at Google, Facebook, Twitter, etc.
(GDPR, Twitter Terms of Service, Facebook and Instagram privacy updates, to name a few.)
But if you only focus on digital marketing as a job, think what it must be like trying to build an organization around it.
While there isn’t one single answer to this conundrum, we found the key to happiness and success.
Collectively, we began by identifying the biggest pain(s) we were experiencing as an agency.
We chose to listen to the issues our clients were having and turn that into a product that could add value.
And by doing this, it helped us scale an agency—one we thought was unscalable.
I hope the story of our agency and ultimately, our product launch (hello ContentCal!), will provide an interesting read.
And you may also take away some tips on what to do (and what not to do…) if you find yourself in the same boat.
Getting Started
In 2014, we started life as a social media and digital agency called ASTP.
The founder, Alex Packham, previously ran the social media department at a large corporation and was responsible for managing a roster of retained agencies.
The sheer number of players and budgets involved was mind-boggling.
Alex saw an opportunity to take his enterprise-level social media experience and offer it to smaller businesses. And that is how ASTP came to be.
The next two years were spent trying to scale. For anyone who has attempted to grow a business that relies on people power, this is much easier said than done.
To scale an agency, you need predictability. You need a process. You need transparency.
But when your business is young, picking up year-long contracts can be nearly impossible.
Clients’ low appetite for risk meant mostly project work and three-month retainers.
We were typically working for small and start-up businesses that were not only wary of working with a young business, but social media in general: will it work for them?
We picked up any work we could get.
Hiring and Structure: the Challenge
We’ve used freelancers before (and the community of freelancers here in the U.K. is growing) but our first hire was a graduate.
In the early stages of an agency, having multidisciplinary employees is critical to ensuring you have optimum resource utilization.
We invested massively in these first hires in terms of courses, education, and training.
We took a big risk that paid off.
These first hires have only just moved on after three years. And that is way above the average agency staff churn rate of 18 months here in the U.K.
Maintaining Culture As You Scale an Agency
For us, culture is an ongoing process.
For the first hires we made, it seemed easier to hire intelligent, but less experienced people and nurture them.
Once we had more than five employees, that hiring strategy became difficult to scale.
Because the team was busy, less time was devoted to nurturing and onboarding each new hire.
That meant we needed to hire more experienced (read: more expensive) people in better-defined roles.
That in itself created a bit of a shift. Moving from all mucking in together to get things done, to more defined responsibilities and management structure.
It’s only natural that at this point you see some staff turnover. But just because the structure changes from flat to something resembling a pyramid, this doesn’t mean communication needs to follow the same structure.
As long as communication is open, the team is aware of everything going on, and they still feel plugged into the journey. And hopefully, they will continue to enjoy the ride.
Not all Customers are the Right Customers
We all need money to survive and scale an agency. The thought of turning any business away is a crazy one for most small businesses.
With less than 10 employees, we’d grab what we could. But there were times when we got burned, either from over-servicing a client, taking on out-of-scope projects, or giving away too many ideas as part of a pitch.
Not all business is good business. In the early days, you need to minimize waste wherever possible.
Three years on and now with 30 employees, it’s amazing the difference saying ‘no’ has made. This can actually build trust. It tells your customer that you are focused, and have a true understanding of what you do.
Ultimately, it had the net effect of them wanting to give us more work.
Finding Alternative Revenue Streams
One of the wonderful things about being an agency is working as an extension of your clients’ business.
This means you become exposed to a wide array of challenges these businesses face.
I guess that’s why so many software companies start life as an agency (Hootsuite, Basecamp, and our very own ContentCal).
It’s exposure to these challenges which can light a fire in the entrepreneurial agency owner.
In 2015, ASTP had about 10 clients for whom we ran social media. Each time we took on a new client, we would have to hire more people to service them.
With the pace that social media operates at, it was incredibly challenging to structure a process that adequately supported both speed and quality, while still allowing for client communication, collaboration, and sign-off.
Every month, we would prepare a spreadsheet-based ‘Content Calendar’ with all the necessary info and leave a space for comments and approval mark-ups.
We’d spend hours creating this to ensure it was perfectly aligned with a clients’ strategy, then happily send it on over to our client.
Then we would wait. Then we’d ask for feedback. And then we would wait some more.
Eventually, usually at the 11th hour, we’d get feedback via email.
(Of course, there were no comments added to the spreadsheet.)
And, in a mad rush, we’d make the amendments, manually copying and pasting the content into whatever scheduling tool we were using at the time (Buffer/Hootsuite).
It’s a small wonder why we had to hire so many people to look after these clients.
Creating a New Tool
We knew we had to transform this process, but we could not find the right tool to support it.
The only choice was to build our own.
So, Alex sketched out how we saw the system working and handed it over to a developer.
One year later, in 2016, ContentCal was born.
Despite being a living, breathing product, ContentCal was still, at this stage, just an idea. It wasn’t a business in its own right. Yet.
But when you truly believe in a product, what better testing ground than your own clients?
While it wasn’t perfect, we’d created something which put planning, collaboration, approvals, publishing, and analytics into one platform.
It immediately saved us two hours per week, per client.
Those results, along with feedback from our clients, encouraged us to formally launch this as a standalone product.
Don’t Do It Alone
The best businesses are built by teams. So Alex gathered a founding team to take on responsibility for product development, technology, and growth.
The barriers to entry in launching a software product are far higher than they are when launching a service business.
You can launch a service business with some contacts and some know-how.
But for software to scale and see returns, you need to invest heavily in getting the right experience involved.
You must understand the size of the market you are serving, and whether your product addresses the needs of a mass audience.
It’s all very well building something for your own purposes. But until you get into the trenches with as many prospective customers as possible, it’s very easy to create something that only services a small audience.
Six months into our launch, it was clear that we were onto something.
Users and customers were growing, and it was starting to become predictable and repeatable.
Running a software business is capital intensive in the early days.
We had to create a strong founding team to attract investors we needed to help fund the business.
The wise experience they have brought with them has been transformative.
Transparency Always Wins
When you are growing a business, things happen at lightning speed, and it’s easy to lose control.
Team stability should be your number one priority. This happens through openness, honesty and crystal-clear communication.
And to be honest, these are the values we need to live by in our industry, as a whole.
The communications industry is blighted by a lack of transparency.
The latest woes at Facebook are the latest manifestation of that.
For many, digital marketing (not just social media) and the tactics involved (programmatic advertising, cookies, re-targeting pixels, influencer marketing) can be confusing.
And as service providers in the industry, it becomes our job—our responsibility—to cut through the jargon and deliver pragmatic and understandable strategies.
One of the main reasons our product has grown so much in 18 months is its ability to provide transparency and visibility across teams and activities.
In fact, many agencies use our product as a sales tool in pitches to illustrate this transparency and engender trust from their clients.
We continue to grow both the agency and software sides of the business. And while it’s never easy, we do believe it is possible to scale an agency, which is the unscalable.