The Keys to Scaling Success for Marketing Agencies
By Moira Alexander, Founder of PMWorld 360 Magazine and Lead-Her-Ship Group
Marketing agencies are indispensable partners to the companies they serve, but with increasing global competition, rapid technology evolution, talent retention challenges, and expanding client demands, today’s marketing agency has to be nimble and constantly scale in order to thrive, not just survive.
This blog explores the pressures facing modern agencies, how client expectations are driving rapid change, and the best scaling strategies for successful growth.
Macro Challenges Facing the Marketing Industry
Economic pressures impact virtually all industries, but in the professional services sector, where your people are your products, they create unique challenges that simultaneously make growth both imperative and more difficult. Marketing agencies must adapt to the growing macro challenges that are reshaping the industry.
Increased Global Competition
The ongoing digital transformation of most businesses spells more lucrative opportunities for marketing agencies. But it also means more competition. As more companies leverage digital marketing with great success, more international players are vying for these marketing budgets. In his Entrepreneur article, “Digital Marketing is Crowded, So How Can Your Agency Dominate?” Timothy Carter says it’s a hyper-competitive marketing landscape that’s putting marketing expertise and authority, scalable solutions, and differentiation in high demand.
Kantata recently partnered with Salesforce and Canam Research to conduct our State of Agency Operations survey to gain a firsthand perspective on the current challenges facing agencies and their priorities to address them. This research found that 46% of respondents have expanded their product or service portfolios in response to changing business conditions.
For most marketing agencies, the work to attract, win, onboard, and manage clients is manual, labor-intensive, and often costly. In Aaron Agius’s article for Forbes, “Four Pitfalls Most Digital Marketing Agencies Encounter When Scaling,” he explains that these processes can be significantly more complex if the systems in place are outdated or aren’t scalable enough to grow with agencies. Yet, the State of Agency Operations research showed that nearly three out of four agencies are highly dependent on spreadsheets.
This reliance on traditional approaches can directly impact the customer experience and negatively affect a prospect’s perception of a marketing agency. Our research shows that for many, a fragmented tech stack with too many tools is leading to challenges like difficulties with integration (35%), too much manual effort (33%), a lack of effective workflow management (30%), and data silos (26%).
While the Great Resignation has given way to “The Big Stay,” finding and keeping the best talent is still a key concern for agency stability and growth. Today’s employees are highly focused on:
- Financial compensation
- Job fulfillment
- The ability to be authentic at work
- Personal well-being
- Job creativity and innovation
- Job satisfaction
- Work flexibility
Atomik Research findings in “The Changing Dynamics of The Modern Workforce” reveal that 61% of senior leaders say they spend at least a third of their time each day trying to solve employee turnover issues, which is pulling focus from core responsibilities like ensuring exceptional client experiences and business development. Likewise, our State of Agency Operations research showed that agencies see the employee experience as the third most important area of improvement in the next 6-12 months, with 41% of respondents focused on it.
Demand for Customization and Personalization
It’s estimated that 63% of digital marketing leaders struggle with personalizing marketing solutions. When marketing agencies fail to tailor their marketing approach to a client’s unique needs, it can lead to unsatisfactory customer experiences, missed opportunities, and wasted resources. As clients are looking for more control over how and where their marketing dollars are spent, agencies are under increasing pressure to evolve their offerings.
Clients are looking for agencies that can deliver:
- services aligned with their digital transformation initiatives
- qualified marketing agencies that can deliver specific services
- automation and more self-serve marketing technology
- access to real-time relevant marketing analytics from anywhere
- agility to adapt to changing client demands
- economies to make the most of shrinking budgets
- technologies that integrate directly with their systems
- built-in data compliance and security protocols
To adapt to this changing market, marketing agencies must combine full-funnel capabilities, the latest technologies, and an agile operating approach that enables ongoing adaptation.
5 Effective Scaling Strategies for Marketing Agencies
With change a constant in today’s marketing world, flexibility has become a necessity, not just a nice-to-have. Finding new ways to sustain growth and efficiency requires tools and capabilities to activate value-driven marketing at scale.
Marketing agencies must be able to make decisions based on current, relevant data to optimize marketing operations. Having the right resources, strategies, and technologies in place can set marketing agencies up to scale and transform operations for sustainable success.
Emphasizing these five strategies can help put your agency on an effective growth trajectory:
1. Assess Your Current Level of Operational Maturity
To know how best to grow, it’s important to clearly understand your organization’s current state of maturity. According to Accenture, the journey and scaling strategy will differ for each agency and will depend on where you fall within these four levels of operations maturity in terms of data, processes, talent, and technology.
- Stable = foundational
- Efficient = automated
- Predictive = insights-driven
- Future-ready = intelligent
Assessing your current state of operational maturity provides the baseline for taking action and measuring progress. From here, creating agility using real insights is vital.
2. Determine the Right Offerings Mix
Capability gaps in marketing agencies can reduce budget efficiencies, team effectiveness, and technological savvy. To scale successfully, agency leaders must adopt the right approach to balancing and optimizing technology and resources to serve the evolving needs of their clients. In fact, our State of Agency Operations research found that 74% of agencies have made or intend to make changes in their business strategy in the near future to adapt to market shifts.
Multidisciplinary teams comprising internal and external members with the right capabilities can be key to meeting clients’ changing needs. Since shrinking budgets can mean that many firms have to find ways to do more with less, a wide range of solutions is key to remaining resilient and consistently delivering tremendous results for clients. According to Gartner, the best strategy to achieve this is identifying and implementing the right mix of internal and outsourced resources. Having the right tools in place to manage these resources and enable effective collaboration is key.
3. Create Data-Driven Agility
In the book Madison Avenue Makeover, which documents the transformation of Huge from a digital agency into a product-centric growth acceleration company, author Michael Farmer diagnoses a key scaling challenge agencies face:
“Agencies today do not run themselves to achieve scale – each client is run as a separate service business, and each client’s services are different from other client’s services. The current agency business model is fragmented; there is no way a CEO or top management team can improve agency performance.”Michael Farmer, Madison Avenue Makeover
Visibility is key to effective scaling, and fragmented data stands in the way of agility. Refining the agency business model to eliminate data silos while expanding the sources and types of data you can access and act on provides a more precise picture of clients, location-based behaviors, and changing demands. By leveraging past data and predictive analytics, agencies stand a greater chance of powering and maintaining business growth, especially when operating in a remote environment.
Data is also key to making the most effective use of resources. For four out of ten State of Agency Operations respondents, resource allocation and capacity planning are some of the most difficult tasks. Likewise, at least 30% of agencies say project estimation and forecasting are key challenges. All of these tasks are highly dependent on easy access to accurate historical and forecast data to enable continuous improvement.
4. Support, Encourage, and Advance Marketing Talent
It’s no question that employees are the lifeblood of any thriving marketing agency. Clients appreciate advanced technologies that create convenience and timely insights, and the team members you employ give them comfort and offer a personal touch at every interaction. From sales teams, account managers, creatives, and project coordinators to CMOs, everyone plays an essential role in meeting clients’ specific needs. As clients want more from agencies, teams will be pushed to new limits.
This makes supporting employee satisfaction and growth opportunities key to strong client relationships and continued agency success. In fact, State of Agency Operations respondents cite employee retention as the number two challenge to their business. This is why 41% of them are prioritizing the employee experience over the coming year.
An estimated 55% of CMOs in Gartner’s survey say they included flexible work options, such as location, hours, days, desk mobility at the office, work amount, and even freedom to choose projects. Across every initiative, developing a sustainable talent pipeline with the right tools, policies, processes, and technologies that support their well-being, provide opportunities for advancement, and encourage individuals to perform at their best is the key to sustainable success.
5. Invest in Technology That Scales
With more agencies operating remotely and servicing remote clients in an increasingly digital world, the technology landscape must adapt and scale to meet the needs of employees, clients, and other stakeholders. As a result, many agencies we surveyed are investing in new tools to accelerate and streamline performance — 40% in business intelligence, 30% in project/task collaboration, and 24% in resource planning/resource management.
In reevaluating the technology that supports scaling, marketing agencies need to replace outdated technology and generic point solutions with scalable, purpose-built SaaS-based software. By gravitating towards vertical SaaS software solutions specifically designed for marketing agencies’ unique and evolving needs, agencies will have the tools they need to overcome key operational challenges, increase visibility, create loyal customers, mitigate risk, and maximize profits. It’s time to overcome the hurdles that come from manual workarounds and bring efficiency to the forefront for the benefit of employees and clients alike.
The Right Solution to Scale Marketing Agencies Effectively
As more companies realize that technology is an essential tool for scaling, finding the right approach is more important than ever. From having the right capabilities, to easy integration, to enabling the most effective use of data, investing wisely is essential. The Kantata Professional Services Cloud is designed specifically to address the needs of marketing agencies, providing the insights and control you need for effective growth and long-term profitability.