Business development is essential for every company, whether they are Coca Cola or Bill’s Web design down the road. Developing and growing your agency as an SME (small or medium-sized enterprise) brings with it its own problems and issues, whether it be embracing technology, finding a consistent flow of ideal clients, or attracting the right talent so you can provide a good quality of service.
But where do you start if you want your agency to grow? Well, that’s the million-dollar question and one that I hope I will be able to help you answer over the course of this article.
Let’s get started with our Ultimate Guide to Business Development for SME Agency Owners.
Avoiding Feast or Famine
I spoke about the ‘feast and famine’ cycle in a previous article (which can be found here) so I won’t go into great detail here. In short, ‘feast and famine’ is the cyclical nature of many businesses as they go through waves of success followed by lean spells.
The ‘feast’ part of the cycle is when times are good. Everyone has plenty to eat and you become preoccupied with serving existing clients to the detriment of marketing your agency and new business and to the detriment of your future agency.
The ‘famine’ comes when the clients dry up or a project ends. And the kicker is, this isn’t always easy to foresee – clients can end projects for many reasons and projects may end due to unforeseen issues completely out of your control.
It’s in a time of famine that most agency owners start to exert the most effort as they dedicate themselves to rekindling their order book through hard work and determination... which, with luck, can lead to another ‘feast’. But it’s also in a space of famine where agencies make bad decisions such as discounting their services or taking on any kind of client just to get money coming through the door and sadly this type of decision-making ensures that the feast and famine cycle repeats.
But the ‘feast and famine’ business cycle is not sustainable and very stressful for you and your team, and all it takes is one extended ‘famine’ to push even the most robust company to the brink of extinction. This past year’s COVID-19 pandemic is a great example of how unforeseen events can cause extended lean spells for everyone.
You may be asking how you can avoid the ‘feast and famine’ cycle. Well. I spoke in detail about this in the article mentioned earlier (here) so head there if you want a full break down.
The one thing I do want you to take from this section is that ‘feast and famine’ can and should be avoided. Make sure you have short-, medium-, and long-term plans and keep your head straight: don’t become complacent during good times. Keep those clients happy, keep focused on new business, and the money will keep rolling in.
Avoid “The client service hamster wheel of doom”
The client service hamster wheel of doom is all too familiar to many agency owners and it goes hand in hand with the ‘feast and famine’ cycle.
When times are good and you are feasting on the spoils of your success, servicing clients can become a vast black hole of time and effort. Multi-tasking becomes paramount and you seldom have time to think about your agency’s future, which is vital if you want to avoid famines and develop your company.
But eventually, the client you’ve spent so much time and effort on will sail away or the project you’ve worked hard on will finish. What now? The famine is fast approaching, and you’ve had little time to plan ahead or develop your business to succeed beyond right now.
So how do you avoid the client service hamster wheel of doom (catchy, right?)? How do you keep clients happy while ensuring you develop your business to keep the wheels turning and food on the table? There are a few things, that you can do to avoid this particular challenge, including:
Don’t be afraid to say no – You want your clients to be happy but there has to be a line in the sand. Being accommodating is one thing but being a pushover is another. Learn to say no when you have to (and teach your team to). Obviously, do it in a professional, polite way with reasons. Most clients will understand and be totally fine with it. It’s all about having clear boundaries and not just jumping when clients say so!
- Define the scope of your relationship with the client – Make it clear from the outset the type of relationship you will have with your client. Give them clear indicators of how you work. Don’t lead them on into thinking you will jump through fiery hoops into an abyss when they ask if this is something they are not paying for!
- Define the scope of the work you will do for your client – Again, make it clear what you will do for your client in terms of work (and therefore what you won’t do). Don’t be vague or lead them into thinking you will do something (to win the business) that later on you either can’t or are reluctant to do. Define the terms of work clearly and make sure your clients understand and sign-up to them.
- Ring fence time to focus on the future of your agency (let’s call this strategy) – Don’t just say you will do this when you have time but rather set aside time on specific days where you will focus on strategy (i.e., planning, product development and business development). Schedule your clients around these times and be unavailable to clients when you are in your ‘strategy time’.
- Get clear with clients the difference between a ‘standard’ service (i.e., what is included in the scope of work) and an ‘extra’ (i.e., something they will have to pay for) and if for whatever reason, you decide to do an ‘extra’ for free then make sure the client understands the value of it and that this would normally be charged for (and therefore will be charged for in the future).
The 3 components of business development
Of course, knowing that business development is vital is only half the battle. The other half is successfully implementing ongoing strategies that allow your agency to grow no matter what the current circumstances are.
How you do this is important because flailing around with various strategies with no game plan will prove fruitless, time-consuming, expensive and stressful!
Any successful business development plan will need to address 3 key components (click on 1, 2 or 3 below to read in more detail):
Marketing is a vital tool to grow your business but can equally be a time and a money pit that returns little in the way of results. Understanding what type of marketing is best for your agency is vital to growing your business. Here are a few marketing tips to get you started:
Look for a niche
I spoke about the importance of identifying for your niche in a previous article (which can be found here), so for a full breakdown of the topic head over there. In short, niche marketing is about narrowing your focus to areas that fit your specialism, your interests, and your services so you ensnare the most likely clients to be interested in what you do.
You’ve probably seen big businesses throw out a wide marketing net. And for them, it works (although if you look carefully, they too have a clear niche(s). They have the funds and muscle to pull in a wide client base. But for SMEs who don’t have unlimited budgets and an instantly recognisable brand, wide net marketing is a massive waste of resources and seldom bring results. So be a specialist not a generalist.
But how do you find your niche and once you have, how do you ensure you maximise its potential? Here are a few tips to help you out:
Know your audience (customer avatar)
A customer avatar (or buying persona, as it is also often called) is a detailed picture of the ideal client who you would like to work with. You customer avatar will be the client most likely to want your products and services as well as being the easiest to work with.
Think hard about who you are trying to sell your products to. What do they look like? What are their needs and pains, and how do you meet them? Where do you find them and what type of marketing entices them? Developing a good picture of your ideal audience will make marketing to them a much easier proposition.
You can learn more about creating your ideal target customer (persona) in my FREE workbook.
One quick tip - You might be tempted to go after different groups and different audiences, but this may water down your marketing message. Resist the temptation to go big and focus marketing efforts on your niche.
Keeping the sand timer filled
I like this metaphor - humans are like sand timers and if you don’t engage with them before the sand timer runs out, they will forget about you and look for another agency to meet their needs. You could run an amazing engagement campaign but if you don’t follow it up clients will soon forget you (and by from your competitor!). This is why any marketing strategy you implement must keep potential client’s sand timers filled. One great way to do this is with a mailing list.
The power of your mailing list
If 100 people who fit your ideal client engaged with your marketing today how many do you think would buy from you?
In my experience, only one of them would.
So, the question is, how do you nurture the other 99 so when they are ready to buy they raise their hand reach out to you?
One of the best ways to pull clients to you (without harassing them) is through value-based content email marketing. Clever email marketing builds a relationship with your customers while allowing you to remind them that you’re still here for them. It’s a clever tactic and one that is proven to work. Recent statistics on Hubspot (article here) show that businesses who use email marketing effectively see a 760% increase in revenue. It’s no wonder that 80% of business now use the strategy as their main form of customer contact.
The most important part of any business is the revenue/profits it generates. And the only way to generate revenue is to make sales.
Unfortunately, there is no magic bullet solution to generating sales. The key is to do a few things and do them well. Don’t overstretch. Look at the areas of outreach that you are comfortable with, are best at doing and therefore can do consistently, and focus on those.
Make sure you qualify prospects carefully, so you invest your limited time in the hot prospects rather than the fact-finding time wasters.
You also need to understand the sales funnel (see image below) and its stages, especially the importance of building KNOW, LIKE, and TRUST with clients. The three phases can be described as follows:
· KNOW – potential clients see your products and services through your marketing, networking or via word of mouth. They haven’t yet formed an opinion about them but they know they exist.
· LIKE – As the client understands more about your products and services they form an opinion and begin to like what you do. They may even start to engage directly with you, but they don’t yet trust you enough to become a customer.
· TRUST – This is the part of the sales funnel where the revenue is generated. At this stage, clients trust you so they are willing to buy from you. They know your products are great and want more. Once a client reaches this stage they will return to you over and over… so long as you keep that trust in place.
Marketing will help you through the KNOW and LIKE phases, but you will have to work hard for them to TRUST you. To get TRUST you need to effectively keep your clients close through direct contact and more detailed communications. Let them know when you have a new service they might be interested in and provide them with free value-added content.
A word of advice: steer clear of cold email or cold LinkedIn outreach methods as they rarely work (Why? Well there is no effort to build KNOW-LIKE & TRUST!). Few people ever responded positively to being cold-called back in the day, and that is truer than ever today, whether it be by phone, email or social media!
3. Client retention & growth
Client retention is also something I’ve written about extensively previously (my Ultimate Guide to Client Retention can be found here), but it’s important to understand that retaining clients is a key factor of business growth.
No agency can afford to adopt a mobile phone approach to client retention where you focus all your energy on winning new clients, not the ones you already have. This leads to a revolving door of customers which can be more time consuming and, at the end of the day, far more costly for your business.
An article in Forbes magazine in 2018 put the cost of finding a new customer at five times that of retaining an existing one. Figures like that just aren’t sustainable over time. That’s why you need to implement strategies for keeping current customers happy as well as attracting new clients to your business.
Do some account development planning to future proof your client relationships and when you have your planning/strategy meetings with the client, go armed with new ideas for future campaigns.
Business development as an SME agency owner can be challenging but it is essential to deliver controlled growth.
Make sure you do two crucial things that will ensure success:
1. You work out your best business development strategies to engage with your ideal target customer.
2. You ring-fence time every week in your diary to focus on these business development strategies.
I hope you’ve enjoyed our Ultimate Guide to Business Development for SME Agency Owners. Have a look around my website for many other useful articles and free eBooks to help you with your continued controlled growth.