We live in unpredictable financial times. 2021 saw the fastest economic growth in decades in America and unprecedented job creation. The economy overheated to the point that we also began to experience the highest inflation rates in decades. Now, between high costs and ever-rising interest rates, the economy is incredibly unstable. Did we grow too fast? Will Putin make another rash move in Ukraine and send the global economy over the edge? When will supply chain issues finally clear up? How much higher will interest rates rise? When will inflation subside? Are we headed for a recession? Are we already in one? There is a lot for business owners to be concerned about. This article offers up eight actionable tips on how to grow your agency in an uncertain economy…and a couple of inspiring stories of massive companies that did just that through the right marketing.
#1 – Lean Into Your Prospects Fears
This tip is perhaps the most obvious once you think about it. The fear you may be experiencing as an entrepreneur is one that many other business owners are experiencing. Their markets are uncertain. They aren’t sure what will happen with their costs and their supply chains. Is a recession about to hammer their revenue streams? Changes in the online world — particularly those made by Google since adopting new leadership – may have made once reliable or cost-effective marketing in the past neither of those things in the present. Many of the prospects we are talking to have very legitimate reasons to be worried.
Lean into that.
We, as marketing professionals, have the solution to many of those problems. Let’s talk — I mean really talk — about their problems and their fears. Then let’s talk about the way that a consistent lead flow/revenue stream can solve those problems. Maybe the new marketplace will lead to a slightly lower ROAS or slightly higher CPA, but isn’t it worth it to overcome those problems? Maybe it doesn’t lead to that at all. Prospects who haven’t been able to keep up with the many changes in the digital marketing world may only be getting left behind because of a lack of expertise, not a lack of opportunity. We can certainly help those folks. Moreover, during times of economic uncertainty, many companies make the mistake of drawing down on their marketing budgets. That means competition levels (and thus costs) may be lower than normal. That also leads us to the next, crucial point.
#2 – Invest in Marketing When Competitors Aren’t
When other companies stop investing in marketing, it creates a vacuum. Our agency call that vacuum opportunity. To be sure Google and Facebook have not yet seen a decline in revenue numbers. They have, however, noted that growth has slowed significantly. In the Great Recession of 2008-2009, ad spend dropped more than 12% in Google in the US, (according to adage.com) at a time when the whole world was pivoting from traditional advertising to digital advertising. If we were to enter another serious recession, the decline in advertising in Google, YouTube, Bing, Facebook, Linked-In, etc. is likely to be even steeper. This means that most industries will have less competition and budgets will stretch further for those who persist in their marketing. Research has shown again and again that reducing marketing budgets is not the best way to survive a recession or period of inflation. Research published in the SMU business school reported that “Companies that have bounced back most strongly from previous recessions usually did not cut their marketing spend, and in many cases actually increased it. But they did change what they were spending their marketing budget on and when to reflect the new context in which they operated.”
History gives us a couple of examples that prove this principle. Let’s look at the most severe economic collapse in American history, the Great Depression. Entering the Great Depression, Post Cereal dominated the marketplace. Predictably, Post slashed its marketing budget during the Great Depression. Kellogg’s Cereal, however, took a contrary position. They doubled their marketing budget over the course of the decade. Having just launched a new product called Rice Krispies in 1928, they decided to counter the depression by attempting to grow their revenue stream They created three characters to go with their products called “Snap,” “Crackle” and “Pop.” They invested heavily in advertising. They increased profits by some 30% and emerged from the Great Depression as the market leader. They continue to dominate their rival, Post Cereal to this day.
An even better example might be Proctor and Gamble. Many folks mistakenly think of P&G as a major manufacturer. They are not. They are one of the world’s most successful marketing agencies, acquiring manufacturers, completely revamping their marketing, and making relatively small changes to production. The marketing is typically centralized with P&G while each subsidiary handles its own operations. During the Great Depression, most competitors slashed their marketing budgets. P&G recognized radio as an emerging technology and a hidden opportunity. In 1933, they launched a “serial” (what we now call Depression-era radio soap operas) called Oxydol’s Own Ma Perkins. This was the first of its kind show, a daily drama, that also happened to peddle P&G’s detergent, Oxydol. And now you know why they are called “soap operas.” Oxydol’s Own Ma Perkins was a huge hit. By 1939, P&G was producing 21 different radio soap operas and had become an industry giant. Not surprisingly, in 1950, P&G launched the first television soap opera.
What emerging or changing market is available to businesses today? Where are the opportunities for agency growth? They surely lie mostly in the digital space, and are available to those willing to invest in growth while the rest of the world is shrinking back.
Think about the following:
1. How does this apply to your existing clients?
2. How does this apply to your new prospects?
3. How does this apply to your agency?
#3 – Sell to Your Current Clients
As we just noted, this principle of investing in down markets applies to most businesses. It is much easier to sell your existing clientele than it is to sell new prospects. The approach needs to be something along the lines of this: Mr. or Ms. Client, are you concerned about declining lead flows or revenue streams? Is it time to double down on the work you are doing now that is yielding good results? Is it time to diversify and add some additional online opportunities to your lead generation portfolio? What areas can you invest in now and get amazing value because your competitors are cutting back? We want you to grow through these uncertain economic times, not shrink. The companies that do best generally invest more to stabilize or even expand their revenue streams, rather than cutting costs. That Is the type of growth we want for you.
#4 – Provide Incentives or Promotions
The pushback you are likely to receive from existing clients is that funds are tight, and that leaves little room for additional marketing dollars. The best way to counter this is to show the value of the service relative to the cost. However, in competitive markets and with tight budgets, sometimes even this isn’t enough. Some of our agency partners offer discounts for prospects that bundle different services. We have discounts baked into our prices for clients willing to make longer-term commitments. If there are free services your agency can personally offer – such as a complimentary hour of conversion advice with each new contract, or linking to and liking all of their social media properties, this would be a good time to do so.
In this day and age, many folks with tight budgets may either want to launch an SEO or SMM campaign themselves, but be unsure how to do so effectively, or 2- want to cut outsourced SEO or SMM campaigns from a third-party vendor/agency and bring them in-house, but are still unsure how to do so effectively. In either case, our white label SEO Initial Analysis Reports and our white label social media Initial Analysis Reports can be great tools to help guide prospects looking for a DIY approach. We can sell market research and they can benefit from a one-time expertly orchestrated strategy guiding their DIY efforts.
#5 – Expand Your Offerings
If you have not yet made the decision to partner with That Company, I would encourage you to make that move as soon as practical. Our breadth of services can be a Godsend to specialized agencies. Even we are not done diversifying, however. Here at That Company, we are consistently looking for new services, and tweaks we can offer to current services. In recent years, we added (and later revamped) Google Business Profile optimization, including the Valued Input review collection tool. This summer we have been considering adding a couple of other services/tweaks to existing services. We are looking to stay on the leading edge of digital marketing offerings. You should diversify, as well. We have several partners who offer web development services, and a few that offer software development and video services. If you want to add those services, we can make an introduction for you. Personally, you can probably bring consulting or graphic design, or programming experience to the table. Don’t be afraid to offer a wider selection of services to your prospects during these times. Diversity is your friend in uncertain markets, and any service that allows you to begin building a positive relationship with your clients is worthwhile.
#6 – Focus on Efficiency
Many agencies, when faced with an unpredictable future, focus on cutting costs. This is the wrong approach. Too often this leads to lower out-of-pocket costs, but poorer service, fewer leads, and worse client retention. Instead, look for inefficiencies, and go after them with a hatchet. Studies have shown that cutting administrative costs has the least impact on business growth/stability during a recession, so start there. Here at That Company, we were able to find redundant or little-used agency tools that we discontinued to save a few hundred dollars per month, at one point. Now is the time to trim your spending on your least cost-effective lead generators and prioritize the better performers. Have you been meaning to explore the low-cost replacement for a particular piece of software? Check it out now. Are there employees or departments that are underperforming? This is the time to push for greatness. Have you had an innovative new approach you were afraid to try out? Now is the time. Lean into those free marketing tools, like Linked-In messaging, joining entrepreneurial Facebook groups in your area, joining your local Chamber of Commerce, attending local business networking events, etc. This is the time to squeeze more out of every resource. It is also the time to measure more. Determine what your KPIs are, and pursue them passionately. Don’t do less with less. Do more for less.
#7 – Make Sure You Have a Good Financial Plan
First and foremost, it is vital to have a good handle on your finances, understanding the revenue, expenses, and profit lines every month. It is also important to have a cash reserve, or a plan to operate without one if times get tight. If any services you use offer deferred payments or interest-free installments, those would be wise to take advantage of right now. In short, take full ownership of your financial situation, and develop contingency plans for multiple scenarios.
#8 – Maintain an Abundance Mindset
This last piece of advice may seem counter-intuitive given everything we have just discussed. It may also seem impractical. It is neither. The truth is, there is more than enough business out there for you and every agency you know of. Think of the county you live in and all of the businesses there. Now imagine just half of all the businesses in that county came to you to do their marketing in the next 12 months. You (and we, as your partner) would be overwhelmed with work, in most cases. There are over 3000 counties in the US alone. There are more businesses out there that need the services we provide than we could ever possibly meet or service. Many agencies, both large and small are going to take an approach exactly opposite the one described here, and their businesses will fold in the coming months. With a greater need on the part of prospects and less competition, there is the opportunity for you to emerge from this time of economic uncertainty stronger than ever. This is the mindset I want you to cultivate.
It is important to realize this because your mindset absolutely matters in sales and marketing. We must walk into every client meeting with the mindset that the prospect needs our expertise more than we need their business. We don’t need any specific client in order to succeed. Yet, what we offer our prospects can be the difference between growth and decline, between success and failure for them. When we truly believe that, our ability to inspire confidence in our clients — and to close the right deals — skyrockets. Never let them see you sweat. Always make them want it more than you do, and you will find a great deal of success.
Conclusion – How to Grow Your Agency in an Uncertain Economy
This is certainly not an exhaustive list of ways to grow your agency in these chaotic times. It is smart to stay on top of market trends and keep on the lookout for other great tips. That said, if you are looking for how to grow your agency in an uncertain economy, follow these eight tips and continue to expand your offerings with That Company and you’re off to a great start. Here is to a healthy and prosperous several months.
Written By: Derrick