As a marketing agency, you spend a lot of time thinking about customer acquisition and customer retention. You’ve got designers, writers, strategists, and account managers—some of the best in the business—but you’ve got to keep them busy with a steady flow of client work if you want the organization to survive.
While customer acquisition and new business are important, customer retention is even more important, and if you’re on retainer with the majority of your clients, it’s plain to see why. Customers who stick with you become a reliable source of recurring revenue—and with enough of them, you don’t have to worry about chasing down new leads.
There’s only one reliable way to increase customer retention in a marketing agency, and that’s by proving your value. Marketing services aren’t often seen as “necessary” the way office space or workforces are, and even if they were, there are hundreds to thousands of competing firms ready to swoop in and take your clients away from you. The trouble is, with so many digital marketing strategies with hard-to-prove metrics and increasingly skeptical audiences, it’s more difficult than ever to prove you’re worth every dollar a client spends with you.
Fortunately, there are ways around these pitfalls. As a marketing agency, you need to deliver results worth more than the cash your clients are giving you if you want them to stick around. This is how you do it.
First things first. There are a handful of general rules you’ll need to follow if you want to be perceived as a “valuable” agency. Remember, perceived value isn’t always the same as tangible value—and tangible value is worthless if it isn’t effectively demonstrated. How and when you interact with your client can make all the difference in whether your “value proof” is effective.
Here’s how you can do it:
(Image Source: Rap Genius)
(Image Source: BuzzSumo)
With that introductory advice out of the way, let’s move on to more tangible ways to prove your value.
Hard Facts: Proving ROI
As a marketing agency, you have to love numbers. Numbers are objective; they don’t require finagling, manipulation, or candy-coating to sell your service. If you can objectively prove the value of your work, you’ll never have to worry about a client leaving.
The question is, how can you prove that value?
For most modern marketing agencies, it comes down to a basic calculation of ROI (return on investment). To keep things simple, I’m going to assume that the majority of your marketing campaigns can be measured for success based on conversions and/or traffic, but you can substitute other metrics here as well—it’s really a matter of semantics.
First, you need to know how much you’re actually costing your client. You may or may not know this, depending on how closely your sales and strategy departments work together. For agencies on retainer, this rate is simple—it boils down to a consistent, unchanging monthly fee that you can use in all your future calculations.
If your rate is variable, or if your client only pays for select services on an irregular basis, you’ll have a harder time making an accurate equation. Do your best to calculate an average monthly expenditure (or look at only one month at a time), and set that figure aside; we’ll be revisiting it shortly.
Conversions can take many forms; for these purposes, I’ll define a conversion as an instance of a user taking meaningful action, which can then be translated to a financial benefit. This is a complicated definition, so let’s use a few examples to illustrate this:
Your client may have multiple types of conversion on a single web presence; this will make it more difficult, but not impossible to calculate the total conversion value. Your best bet is to reduce the field to more manageable numbers, tracking the conversions that are most important, or tracking all conversions together to determine an “average” value.
Ultimately, your goal here is to come up with the “average” value of a conversion. For that, you may need to calculate things like close ratios, lifetime customer values, and average cart value.
Once you have that, we can move on to actually tracking conversions.
There are several ways to do this, but one of the easiest is through Google Analytics. In this system, you’ll be able to create an item called a “Goal” for every conversion opportunity on your site, and then track its growth over time. To get started, head to your admin panel and look for the Goals button in the third column over:
Then, you’ll be prompted to create a new Goal. If you’re running with a basic setup, like filling out an information form or making a purchase, this will be nice and easy for you. Google actually offers several templates based on the most common Goals created. To start, you’ll select one of these Goal types.
From there, you’ll have the opportunity to set further parameters. For example, if your Goal conversion is the act of “Creating an Account,” you can choose the exact instance when this conversion is counted as complete, such as reaching a “thank you” page:
After that, you just need to fill in a few more details (which vary depending on your setup thus far). You can also assign a value (which you’ve already calculated above) or set up a funnel to track only certain types of traffic that convert.
Once created, your Goals (and subsequent reporting) will be the best tools you have to showcase the value your client’s site is bringing in. You’ll be able to view not only how many times the Goal was reached, but demonstrate the actual monetary value of those exchanges.
Now, there’s one flaw with this, and that’s the fact that not all Goal completions will be your doing. To address that, we need to look at the types of strategies you’re using, the types of traffic you’re getting, and the types of traffic that are completing your Goals.
One thing at a time.
Since we’re talking about proving your objective value, most of this section will be dedicated to finding traffic you were responsible for generating, and tying those traffic figures to monetary Goal achievements. However, be aware that inbound traffic alone can be considered to have value. For example, every user that arrives at your client’s site and doesn’t convert will at least walk away with a higher awareness of your client’s brand. I’ll talk more about these “hard-to-measure” values in the next section.
Let’s take a look at the major types of traffic that you’ll want to measure. Once logged into Analytics, check out the Acquisition tab, and head to the Overview section.
Here, you’ll see a pie chart illustrating the main sources of traffic your client’s site receives (you may see more than these, including advertising traffic, but these four are the primary ones an inbound marketing agency should worry about).
In each of these segments of traffic, you can access a “deeper,” more detailed report that will tell you about the type of visitors you receive, where they came from, what they did on the site, and whether or not they converted. For example, the Referral traffic chart will show you the biggest sources of referrals in your backlink profile, and your Social media traffic chart will show you the most popular platforms you use:
These reports aren’t perfect because you can’t prove the psychology of every user who enters your client’s site, but collectively, they can illustrate the power of your current strategies.
Now, you need to bring all these figures together. Using the individualized traffic reports in combination with your total Goal figures, you can calculate approximately how many conversions your efforts have generated for your client. Combined with your “average conversion” value, you can come up with a specific dollar amount of revenue that your firm is responsible for generating. Compare this to your total monthly cost, and hopefully your newly generated revenue will exceed it. If it does, it means your value is almost conclusively proven. There’s only one point of possible contention here; your marketing firm might be generating your client a profit, but what if another marketing firm can generate a bigger profit? I’ll elaborate on this in my next section.
If your costs exceed your objective value here, don’t worry. This isn’t the only way you can prove your value; you still have two more realms of possible value that you can prove and/or demonstrate for your client.
There are two reasons why you’ll want to describe your competitive value, which I alluded to above; first, it allows you to demonstrate that you clients won’t find a higher ROI from someone else, and second, it increases your total value as a company. The goal here is to show that you’re worth more than just your objective ability to increase sales, either because your level of overall service is higher, or because you have some approach, disposition, or ability that your competitors don’t have or can’t match at your price level.
That being said, there are three main ways you can prove your competitive worth.
First, get a feel for what your competition is like. It’s a simple step, but too many marketing firms overlook it. Try to find out what services they offer, how they complete them, how much they cost, and what kind of results they offer.
To start, identify marketing firms similar to yours. You can run a quick Google search to see who else is in your area, or cast a broader net by scoping out national competitors. For example, you could browse marketing-based LinkedIn Groups to find influencers in the industry, or individual consultants who might pose some kind of a threat—in my cursory glance, I found 45,000 such Groups, so don’t feel like you need to peruse all of them:
Inc.com also suggests almost 500 of their top 5,000 growing companies are marketing-related.
(Image Source: Inc)
Once you find out more about who your competitors are and what they’re doing, you can better position yourself to demonstrate value. For example, if you find out that a close competitor of yours only offers monthly reporting instead of weekly, and has no social media marketing services, you could let your client know what a better deal they’re getting with you.
You could also go a bit more abstract here and demonstrate value with the resources you’re able to provide. For example, you could claim that your experts have more experience than those of your competitors, or that you have access to more sophisticated tracking technology. Just make sure your claims are justified—dishonesty could ruin an otherwise solid reputation.
It doesn’t take much to add a personal touch to your service; don’t forget that on the other side of this relationship isn’t a “corporation”—it’s another person, or maybe a few other people, and all of them appreciate the human element of your relationship.
Going the extra mile can give your client those “warm fuzzy” feelings, and help them to see your partnership as an actual partnership, not just a tool to use for their own advancement. This will separate you from the competition, increase the perceived value your agency brings to the table, and make it harder for the client to walk away during brief periods of less-than-stellar results.
Hopefully, you can master this approach intuitively; all you have to do is be friendlier. Opt for in-person meetings and phone calls over emails or text messages. Inject humor and personal conversation into your regular updates. Get to know your clients, and be straightforward and honest with them. Send them a handwritten piece of mail every once in a while, like a thank-you note or a congratulations—they won’t forget it.
(Image Source: Mark Sanborn)
Try to think about this strategy as little as possible. If you overthink it, your efforts might be misconstrued as insincere or manipulative. Instead, just treat your clients like you’d treat a friend, and truly strive to help them succeed.
Digital marketing is a fast-paced industry that responds, sometimes violently, to new technologies and new trends. It’s easy to miss an update here or there with few consequences, but if you do this consistently, it will only take a few years before your entire approach is rendered obsolete. The solution is to adapt, by incorporating new strategies and making new recommendations for your clients whenever possible.
The “newness” of your ideas holds a value, which you can demonstrate to your client (though not in a way as concrete as ROI). If your results are sagging, it could just be because you’re on the cutting edge of the latest marketing trends and you haven’t worked out all the kinks yet. If your pattern of growth has been disrupted, it’s because you’re trying to stay ahead of the competition.
Adaptability is all about taking a short-term risk to avoid a long-term failure, and it’s important that your clients are aware of this. Some marketing firms get by with adhering to now-obsolete practices and never changing them—mark yourself as a differentiator.
Finally, let’s not forget about the secondary benefits all your efforts have for your client’s bottom line. These effects are devilishly hard to pinpoint, and even harder to quantify, but they do exist, and they do provide an extra layer of value to your overall marketing efforts.
Every time you do something that puts your client’s brand in front of an unfamiliar user, you are generating value for that brand. Imagine some of the following scenarios:
In all of these instances, your marketing efforts have led to sales for your client due to the brand visibility and reputation increases you’ve sparked. These won’t show up in your Goals report in Google Analytics, and unless you make each user take a survey about what led them to your site, you won’t be able to definitively conclude how many instances like these you’ve prompted.
When a brand appears on publications like these:
It definitely leaves an impression. Be sure to reiterate this value to your clients.
Your client’s readership pool is a gradually increasing segment of users who either are customers or have a high potential of eventually becoming customers. Some of these make themselves evident by following your client on social media—the behaviors of these are relatively easy to track. Some follow your client via an RSS fed. Some may simply bookmark your client and return to read regularly—but these folks show up as Direct visitors, which normally aren’t credited to a marketing agency.
It’s also hard to quantify the value of things like social shares and social engagements, the former of which is an indication of content success and increased brand reach, and the latter of which is usually associated with a positive increase of brand loyalty. Again, it’s hard to quantify these benefits, but they are there—so don’t neglect to mention them.
Inbound marketing strategies generally carry some degree of permanence, unlike traditional advertising methods. When you write a blog post for Forbes, it stays up indefinitely—compare that to a billboard that comes down forever after a month of visibility. Accordingly, strategies like content marketing and SEO carry a degree of compounding return; writing 10 blog posts this month gives you 10 blog posts of value. Writing 10 more blog posts next month gives you 20 blog posts of value, and so on. What does this mean?
It means when you’re calculating your current objective value (from the ROI section), you’re only looking at the present value of your efforts. You’re completely ignoring the future value of your efforts, which are significant. For example, if you prove that your $100 blog post yielded 100 new visitors worth $0.50 each, you’d have an on-paper loss of $50. However, this figure doesn’t include the fact that this article may generate 100 more visitors next month, and the month after that.
Your current snapshot does take into consideration the compounding value of previous efforts you’ve taken, but because these strategies often carry exponential rates of return, you still can’t write off the future value of your investments.
It takes a long time to build momentum in a marketing campaign. It takes months, sometimes even years, to establish a footprint of thought leadership and develop the foundation for a long-term strategy. Part of your value as an agency is staying the course—to follow-up on the strategic foundation you’ve already built. If that course is deviated from, or abandoned, the initial costs of setting it up will also be abandoned, and the client will have to reinvest in a new foundation (unless someone else comes in to build off yours). Accordingly, you can argue that it’s more efficient to continue with you than it is to seek agency elsewhere.
These secondary benefits are just that—secondary—so don’t try to position these as your ultimate statement of value. Instead, use them to complement or enhance your primary arguments.
This is a massive guide to try and boil down to a few takeaways, so I’m only going to recap the high level here:
If you can do this, and assuming you’re seeing positive ROI, you should have no trouble demonstrating that you’re worth what your clients are paying you. If you’re struggling to do this, it means you need a change to your strategic approach; your client’s bottom line is your bottom line, so enlist the best services to deliver the best results.