Paul Roetzer (@paulroetzer), author of The Marketing Agency Blueprint, recently joined HubSpot’s David Wells (@davidwells) on his webcast Inbound Now to discuss the rise of hybrid agencies, and why the agency model needs to be transformed.
Below are some of the key takeaways from the conversation:
Billable hours are the simplest solution for agencies; however, this model doesn’t make sense for the client.
- Impacting the client’s bottom line should be more important to agencies than meeting hour quotas.
- Different activities/services have varied perceived and real value, so it doesn’t make sense to charge the client the same amount for all work.
- Distractions are inevitable; it’s highly unlikely that you are devoting 100% of your attention to the client at all times. The client shouldn’t have to pay for inefficiencies.
Set pricing is more transparent since both parties agree to a set scope and price for desired services.
- Time tracking and reporting is even more important when using set pricing, as you have to regularly understand how efficient you are and be able to evaluate your pricing structure.
- Pricing is iterative. Based on actual time logged, you can adjust set fees based on historical performance. It takes constant tracking and tweaking to get it right.
- Publishing your pricing prequalifies leads. You only attract leads willing to pay your published price.
- Business development becomes much more efficient when you standardize services and pricing, as you remove question marks surrounding costs.
The current agency model is broken. Change is needed to survive.
- Technology is evolving so fast. It directly impacts the types of services agencies can offer and the processes/platforms they use. Because of this, firms of the future need to be tech savvy.
- Agencies can’t do services in silos anymore, as content, social, search, etc. all play off one another. You need to either plan for integrated services with partners or offer all the services within one agency.
- Agencies can’t only rely on service revenue. They need to diversify their revenue sources to stay competitive. Alternate revenue streams include: publishing, affiliate programs, partnerships, speaking, training programs and more.
Versatile talent is the heart of every hybrid agency.
- Writing is one of the most important strengths when evaluating potential talent. Other skills to consider include search, social and analytics.
- When you find someone with raw talent, there are online resources and books out there to expand their skills. Integrate these into your internal training programs.
Evaluate agencies based on how they market themselves.
- If looking to outsource marketing services, go to the agency’s site and see what they do. Look for things—strong calls to actions, downloadable content, etc.—that tell you they actually understand the services they are talking about.
- Understand who your account team will be and how project management works. If the agency has constant turnover, then that’s a problem. You want to work with agencies that do a good job of retaining talent.
Embrace failure.
- Be willing to take risks. If you don’t have a little anxiety, you probably aren’t pushing yourself far enough.
- A little bit of fear is good.
Want to hear the complete interview? View it in its entirety below or on the Inbound Now site.