The agency business is hard. Really hard. To be successful, you have to work your ass off. You have to stay current on so many new emerging trends and technologies. And to do that well, you have to constantly be on the prowl for the right talent with fresh digital and creative skills (the same skills every other 21st-century business should be looking for). And if you’re able to actually find and recruit the right people, you have to perpetually maintain a culture that keeps your team excited and motivated to build their careers with you. And even if you get all of this stuff right, you have to constantly justify your value to your clients—who are almost always being pressed for ways to cut costs. Does this make your head hurt?
Unfortunately, most agencies don’t have a SaaS recurring revenue model like Salesforce or Oracle that gets their clients hooked and then bills them for eternity. We have to constantly delight our customers, reminding them of the reason they hired us in the first place, rationalizing our agency fees and defending our turf from competing firms who (ahem, falsely) think they can do it better. While we bring lots of really cool intellectual property to the table, it can go unnoticed by our clients, who are dealing with their own problems—which are often not even the real “problems” but the symptoms of asking the wrong questions. But, I digress….
Companies usually view their marketing spend as overhead, like rent or T&E. When companies miss their revenue or growth goals, their knee-jerk reaction is to slash costs, including those associated with marketing and sales. To me, that’s irrational. And, I’m not just saying that because of the position I’m in. I would argue that on the heels of weaker revenue growth, companies should not only avoid cutting costs but should also get smarter about how they spend their budget. Like reallocating spending to the things that attract, engage, convert and retain customers.
So, why do they do this? Maybe it’s because they have no confidence in their own marketing or sales abilities, maybe they think they can save their way to prosperity, or maybe it’s because they are so focused on making the quarter that they leave themselves with no good options.