There are two core metrics that should drive a lot of the decisions you have in your organization; churn & sales. A great agency is constantly studying these two numbers diagnosing them from every angle learning specific areas of opportunity. 

The more you are able to understand these numbers and what they are composed of the better you’ll be equipped to making the right decisions for your business.

In this report, we want to look at churn, which is something we’ve been studying for about 10 years across two different agencies. The first one was scaled to over 1,000 clients and the second one we’ve scaled to over 200 full time employees in just 5 years. 

When you’re a young agency, churn is so important because 1-2 clients can represent a large portion of your income, however as you scale, the same is true. Imagine you’re an agency like Hite and you’re doing $500,000 per month in MRR.

If you have 10% churn monthly, you’ll need to do $50k in new sales just to break even. If you can create an environment where you’re more likely to have 5% churn, if you do $50,000 in sales you’ll grow by 5%.

Understanding why clients leave and acting on it, isn’t only the key to scaling. Agencies with lower churn, partake in other benefits such as receiving more referrals & a much higher evaluation when it comes to selling the business. 

Hite is constantly focused on understanding the why behind our growth & this is essential for your business if you want to scale in 2023.

Churn is critical, especially as you scale for churn is a representation of the quality of your product, service, & customers.

Every agency is constantly battling both the increase of sales and the decrease of churn.

Defining Churn? 

Churn can be broken down in a lot a ways, but for agencies, the most common two churn metrics you’ll see is Client Churn & Financial Churn. These two churn types can be define these two churns as followed: 

For Client Churn we will look at the monthly turnover of clients regardless of financial impact.

For example, If in January you had 10 clients pay you then in February only 8 of them paid you, that would be a turnover of 2 clients and equal 20% churn. In this example it would not matter how much each client represented financially. 

For Financial Churn, we look at the monthly turnover of revenue regardless of clients.

For example, if in January you had $20,000 in recurring collected MRR and in February you only collected 18,000 of that $20,000, it would represent a 10% churn rate. 

Understanding the difference between these two numbers is crucial, let’s look at the following list of clients. 

MRR

Client A $1,000

Client B $5,000

Client C $2,000

Client D $3,000

If we were to lose Client B, you would have 25% client churn, however you’d have 50% financial churn. There could be a very large difference in these numbers especially as you scale. 

The Problem With Researching Churn

Doing research on churn for agencies doesn’t come easily. First off, about 80% of agencies that exist today would be defined as micro agencies, doing less than $15,000 in monthly revenue of which the vast majority do not keep up with, nor have any data on their numbers, especially when it comes to churn. 

Are You Ready to Master Social Media?

Become a Certified Social Media Specialist and learn the newest strategies (by social platform) to draw organic traffic to your social media sites.

Click here

If you take into consideration those that do keep great track of their numbers, between those they may manage and report back churn in many different ways, even beyond the above numbers.

For example, there is a well known agency that is doing several $100m in annual revenue that keeps track of their financial churn, but in their own way focusing more on net growth vs. churn.

In their model, they look at how much was lost, and measure that against what was upsold in order to come up with a net churn. 

With that said, we believe that this report takes all those data points into consideration arriving to tangible and definitive results.

The post How to Reduce Churn appeared first on DigitalMarketer.

Here are 3 signs you’re in an Agency Armageddon

1. Renegotiation

2. Attribution

3. Ad Cost

Jason Portnoy is a serial entrepreneur, top-ranked podcast host and founder of a premier digital marketing agency. Portnoy is passionate about helping businesses get results. https://jportnoy.com/

EXTRA RESOURCES:

The 1-Page Marketing Blueprint

The #1 Reason Your Marketing Agency is Failing

The Hollywood Model

The post 3 Warning Signs of Agency Armageddon with Jason Portnoy [VIDEO] appeared first on DigitalMarketer.

If you are having a hard time getting leads and conversions from your social media marketing right now, then you want to watch this video where Kris Krohn goes over:

1. Which social media channels YOU should use based on your business
2. How to know what kind of content to create to generate organic views
3. How much content you should put out each week (without killing yourself) and,
4. His top tip for taking off on social media

Kris went from relative obscurity to celebrity-level status (and an 8-figure business) really quickly all on social media marketing…and without spending a dime on ads.

The post How to get free leads and sales with social [VIDEO] appeared first on DigitalMarketer.

Our very own Cydney D’Costa shares knowledge we’ve gathered from years of experience and countless hours serving clients. Prove to your clients their money and business are in good hands and that you’re invested in their success by sharing these foundational metrics with them: 

1. Traffic
2. Engagement
3. Subscribers
4. Customers
5. Customer Lifetime Value

Learn the right data to collect and how to interpret it to help clients see what’s going on and why your services are so valuable. 

In this video:

• Engagement Metrics to Keep a Close Eye On: 1:30 – 1:41
• The Most Common Mistake People Make on Social Media 1:53 – 2:05
• How to WOW Agency Clients & Stand Out From the Crowd 2:56 – 3:15 
• The Magic Zone for Marketers and Businesses 4:25 – 4:31

Download the Customer Value Journey aka Super-charged Sales Funnel https://www.digitalmarketer.com/ebooks/1-page-marketing-blueprint-download/

Hire a Certified Partner and Put Your Business in Good Hands https://www.digitalmarketer.com/find-a-certified-partner/

Agency Owners: Learn Our Proven System for Taking Your Agency to the Next Level https://www.digitalmarketer.com/blog/customer-value-optimization/

The post Building a Successful Business: 5 Foundational Metrics [VIDEO] appeared first on DigitalMarketer.

Digital marketing agencies can make $500,000 in revenue in 3 years and bring in an unexpected $100,000 in just 90 days.

If you’re thinking of starting an agency—we get it. We work with agency owners around the world who have figured out how to make six figures in revenue per month. These agency owners all started in the same place:

They had a digital marketing skill set that they commoditized…at scale.

The difference between working as a digital marketer and having an agency are those last two words. As a digital marketer, you only have so much room to scale. With only 24 hours in a day and a life to live, you can only work so much.

But, with an agency, you can hire other people to work alongside you—doubling, tripling, and quadrupling your output. That’s usually the North Star attracting digital marketing experts to start their agency, but it’s not always as straightforward for everybody.

If you’re going back-and-forth in your mind about starting your agency, here are 5 signs that are telling you it’s time.

#1: Your Clients Need More Work Than You Can Deliver

Freelance digital marketers will see the neon sign telling them to start their agency when their clients keep asking for more work. At first, you can handle the work on your own. Soon, you’ll have to hand it off to subcontractors. And after that, it’s time to consider turning your business into an agency model.

You’re clearly doing great work if your clients want more. But without a machine to clone yourself, you’re stuck at the ceiling of 1) how much work you can do per week, and 2) how much work you SHOULD do per week.

If you’re squeezing in 50-60 hour workweeks to try to get everything done on your own—it’s time to start a digital marketing agency. Your offer is validated, and it’s time to sell to your customers (businesses who need help with digital marketing!).

Start a digital marketing agency if your clients want more work from you than you can deliver on your own.

#2: You Have More Subcontractors Than You Can Manage By Yourself

Once your digital marketing business hits a point where you hire subcontractors, there’s a ceiling that’s above that. You passed the ceiling of being the only expert on your team. To pass the next one, you’ll need someone to take charge of your subcontractors. If you have a dozen clients and five subcontractors, you’re starting to feel that ceiling. That’s a lot of work to review, communication to handle, and accounting.

You need help. That help comes from your first agency hire—an Account Manager that sits between your subcontractors and you. You’ve officially become an agency once that Account Manager joins your team. Breathe a sigh of relief. That one hire will save you hours (if not days) of work that was making you feel like you were bursting at the seams.

It’s time to start a digital marketing agency if you’re too busy to run your subcontracting team on your own.

#3: You Have a Consistent Stream of Incoming Clients

This is the goal, right? Getting to a point where your inbox is filled with new client requests and your DMs all ask for more details about working with you is a pretty great life. Until it starts to get overwhelming, you want to help everybody, but you can’t bring on more clients because it’s impossible to get the work done for them.

Cue your agency. When you create SOPs, hire subcontractors and Account Managers—you can take on work and hire more people as needed to deliver it. It’s time to start an agency when you have more people requesting to work with you than you could possibly handle with your current team. This is a tribute to your ability to market…yourself. Impressive, very impressive.

If prospects are reaching out weekly to work with you and you don’t have the capacity to help them, it’s a sign to start your digital marketing agency.

#4: You Want to Focus On Your Business, Not the Deliverables

Deliverables used to be your passion, but now you’re like looking at the big picture. You’re watching the lead generation data, going into flow mode creating SOPs, and you like spending your time talking about the future of your business—not the deliverable due that day. If this made you nod your head, it’s time to start your agency.

You can take yourself out of the “deliverable chair” and put yourself into the “CEO chair.” Instead of publishing Facebook ads, writing content, or worrying about client data analytics, you’ll focus on getting more customers for your agency. Your team will handle the client work, and you’ll grow the business. Wanting to spend less time delivering and more time building is your sign it’s time to start your agency.

An agency model is your next step when the idea of growing your digital marketing business is more exciting than handling the deliverables.

Related Articles

• 2 Ways to Take Back the Power in Your Business: Part 2

• 2 Ways to Take Back the Power in Your Business: Part 1

• Unlocking the Secrets to Recruiting and Retaining Top Talent in Your Agency

#5: You Can Strategize How to Start Your Agency

Starting an agency is a natural progression of working as a digital marketer, hiring subcontractors, and turning that business into an agency. But, that doesn’t mean the education behind running a successful agency comes naturally. You’ll know when it’s time to add a subcontractor to your team when your contractors ask for it, or you can see their workload is maxed out.

You won’t know how to create an agency growth funnel, send a perfect agency proposal template and the lessons of marketing that nobody ever taught you when it comes to growing your agency. That’s all education you’ll have to learn through experience or choose to catalyze by reading the Agency Growth Toolkit inside of Lab. Inside the Agency Growth Toolkit, you’ll also get the Appointment Getter Template, Client Intake Questionnaire, lessons on creating the perfect agency pipeline, and the specifics of building a steady stream of clients in 30 minutes a day.

Growing an agency comes with dangerous pitfalls. Entrepreneurs are ready to start their agency when they’re open to learning these pitfalls and proven success templates.

Start Your Digital Marketing Agency

Your digital marketing agency can turn your annual revenue into monthly revenue if you do it right. Running an agency is far from a walk in the park, but for the determined and passionate entrepreneurs—it’s one of the rides of a lifetime.

Is it the right time to start your marketing agency? It is if…

#1: Your clients need more work than you can deliver

#2: You have more subcontractors than you can manage by yourself

#3: You have a consistent stream of incoming clients

#4: You want to focus on your business, not the deliverables

#5: You can strategize how to start your agency

Like any other business, agencies come with potholes and huge pitfalls. Avoid the inconveniences and potential business killers by learning how to run your agency with help from the experts.

Join Lab to get the Agency Growth Toolkit and learn the digital marketing strategies that have generated millions of dollars in revenue from top marketers (and agency owners!) worldwide.

The post Top 5 Signs That It’s Time to Start a Digital Marketing Agency appeared first on DigitalMarketer.

No matter whether your state looks like it will go into lock down again soon, you should have a plan to keep your business running just in case. You can never appropriately plan for the building to catch on fire, but you can plan a few safe escape routes.

#1 Remote Work

Digital Marketing Agencies in the age of COVID have the luxury of putting the emphasis on Digital. Working remotely is already set up to your advantage. We recently spoke with Ralph Burns on how he successfully runs a remote agency of 40 people.

Here, Ralph talks about The 5 Must-Have Tools For Running A Remote Business. He talks about the tools that are the foundation of his business and how you can integrate them into yours to find success in the remote world.

#2 Digital Marketing

Your agency is looked at as the blueprint for digital marketing by your clients, so set the bar appropriately. With less people out in the world, that means more people are online. Delegate your marketing expenses tactically. If the country goes on a second lockdown no one is going to see billboards or bus ads, funnel that money into your online advertisements instead.

Get ahead of the game and start budgeting for more social media driven ads. If you need some guidance, find out how to budget your Facebook ads here. These formulas can be used for Instagram, Twitter, and LinkedIn as well! 

#3 Increase Your Online Traffic

When the pandemic hit in March of 2020, 30% of United States social media users were online 2 hours more a day. 43.1% of people reported that they were using Instagram the most during their shelter in place experience.

Online traffic has been consistently on the rise since peak pandemic, now is the time to drive those users to your business. Combining your SEO with your Social Media content is easier than ever. Listen to DigitalMarketer’s new President, Mark de Grasse, explain his Holistic Approach to Marketing. Mark’s genius 90 day marketing cycle connects your blogs to your social media and drives all traffic back to your website.

Now that we’ve been through the first lock down we are sure your business can thrive through another. Don’t let COVID restrictions bring you down, your agency is the blueprint for digital marketing, prepare your agency for the incoming lock down as though you were writing the book for all businesses to succeed.

The post Is Your Marketing Agency Prepared For a Second Lock Down? appeared first on DigitalMarketer.