The world is vertiginously changing, new challenges constantly emerge, there are more and more cuts in the market and companies navigate this unprecedented new paradigm with no certainties.
One of the main problems that publicity and marketing agencies face are profit margin cuts. Apart from the economic factor, this move comes along with talent and unnecessary expenses cuts and an investment in specialized teams, which gives an advantage to those with less structures.
So, how is it that independent agencies are acquiring more and more margin and space in such an unstable market?
We have met with two heavyweights from the independent agencies market. On the one hand, we have James Nord, from Fohr, an agency that specializes in influencer marketing. On the other hand, we have Kyle Tarter, from BuyBox, an agency that specializes in eCommerce and Amazon optimization. We chatted with them about the reasons for this exponential growth and the main challenges and opportunities that they face.
James Nord claims that the first key to becoming a market leader is transparency with clients and budgets. Everything is built on the notion that you may be worth the budget or not. When your company is small, you do not need to support thousands of employees and offices around the world, which leads to being more just and competitive with your budget. Small agencias have a competitive advantage that win over the companies’ interest by learning that they spend thousands of dollars a year on creatives. By cutting off talent and unnecessary costs and by turning to remote work, they achieve great work with smaller teams and a smaller price, which leads to a good quality service that costs less. This makes big companies narrow down their investment margin dedicated to creatives and to delegate that to agencies that offer an integral and quality service.
This proves that the nature of businesses has changed. Before, an army of people was needed to offer a service to clientes, but today, technology is enabling companies to be not only more agile and smaller but also more competitive.
Tarter agrees that the dynamics have changed and that communication has become central: by cutting talent, the interactions with people inside the business have changed. This forced them to change the way they communicated with their clients and to find a common language in order for both parties to understand their relationship.
One of the agencies’ competitive advantages is the specialization. Both Nord and Tanter agree that in order to be able to scale, you need to commit to a certain segment in the market and study how to scale through that sector.
For Fohr’s founder, it is key to pay attention and look for new opportunities in the market that arise around the segment you specialize in. Fohr has a particular growth mentality: they constantly reinvest in the business, but they know that growth happens in different timeframes and processes. Once you have shown the market that you are a leader and that you offer something special, you can make opportunities for yourself based on that. And if you are looking for new opportunities, make sure that you can make it right. The more aligned you are to your company’s DNA, the more you will avoid opportunities that do not adjust to what you can offer.
Tarter thinks that specializing is equally important to being agile, because if you focus too much on systematizing and scaling, then you will fall behind on being the best in what you do. Think about this: it is easier to focus on being agile, on providing the best values to your clients and to work with systems that you can set up and change. For BuyBox’s COO, it is essential to understand what will retain your clients in the long term and how to solve their problems in a scalable way. Identifying our clients’ needs and wishes and achieving effective communication with them is a must.
4) Motivated teams
One of the advantages in the creation of teams for independent agencies is the leeway, the participation and the impact that employees have on the company. Tarter says that the people he has worked with are happier working for a small agency than a big company. This is because despite the stress and amount of work, they feel motivated to have a bigger influence on the business. A happy employee works better and for a longer time inside the company.
James Nord added that personal growth is one of the most exciting processes for a person. In order to be happy at work, at least ambitious people need to be challenged, supported and rewarded for achieving their goals.
That’s one of the main differences between big companies and small agencies: the bigger the company, the smaller will be the opportunities for growth, and culture becomes politic. That is one of the reasons for so much staff turnover, which happens when challenges stop and the opportunity for growth is small. At independent companies, the challenges are never ending: the incorporation of new teams brings changes and new opportunities.
In order for small businesses to grow, they must invest in their employees and give them responsibility and the possibility to make an impact on their company’s path.
The complete opposite happens in bigger companies, where a junior employee does not have the change to ruin something. As a result, those high guards become demotivational for those who crave growth. In Fohr, they managed to build a culture that enriches and supports collaborators and gives them interesting projects to work on. They empower their employees to look for challenges and celebrate them when they achieve results. This allows for them to set up a motivated and stable team in the long term.
We have reached the last but not least important key, which is the technology factor. Technology has enabled agencies to scale with less collaborators than their competition and it has also positioned them in the market.
For Fohr’s founder, getting funds to invest in technology is an essential step. In order to make money, your work must stand out because of its efficiency, and the only way to achieve that and to scale in the process is through technology.
BuyBox did that exact thing by creating their business from technology. According to Tarter, it is easier to increase equity, to build and to manage with technology. At the same time, technology must be an investment, a reason for proving that its use improves and betters both the business and the teams: there must be an investment in order to earn a return on investment. Thanks to the addition of a management system, BuyBox expanded their client portfolio: they managed to centralize everything in a single space and they created a systematized process to incorporate more staff, which enabled their adaptation to the company’s methodology in a fast and effective way.
So, how can COR help a marketing agency?
COR is a project management software that helps agencies in the management and structure of tasks and activities with their AI feature. It also helps with the scaling of marketing agencies by standardizing and streamlining operations. COR allows for:
1) Achieving scalability: COR provides the necessary analytics that lead a business’ growth in terms of profitability.
2) Defining projects’ deadlines: This is ideal for calculating the scalability periods. The software has a time tracking system that is used for every task and project.
3) Managing resources and teams: Through the delegation of tasks, the excess of work is eliminated. The system also shows the needs regarding the hiring of staff.
If you want to know more about Fohr and BuyBox’s trajectory and their marketing strategies, learn about them in this exciting interview.