A Guide to Starting Your Agency From Scratch (My #1 Tip)
It’s a question I get asked all the time: “Lior, if you were to start over, what would you do differently?” Or, “I’m just starting out, what should I focus on?”
I get this asked by veteran digital marketers, newbies, or even friends that see my stuff on Facebook and think SEO is just a money tree that anyone can plant.
The truth is there’s not much of a difference between getting your 5th client or your 34th client. You’ll have more experience, sure, but the real question being asked here isn’t one of experience.
It’s how to get money flowing through the door faster.
How do I get 4 clients per month instead of 2? How do I get my first client? How do I get higher ticket clients?
Understanding the Opportunity
That’s really what every starting business should be focusing on – sales. It’s the reason why there is no difference if you have 20 clients or 0. Each sale is a new sale, and can’t come unless there is activity being done to support that.
Taking action is not enough either, it has to be the right type of action and it has to be consistent. For example, the first questions I ask when I’m on a coaching call with someone struggling are: “are you fulfilling the work yourself?” and “what does your outbound sales process look like?”
Usually the answers are: “Yes I do everything” and “Not much, just depending on referrals and trying to figure out Facebook ads.”
The moment of clarity comes when time management and sales is fully understood. Not spending months perfecting your logo or trying to get better at SEO, not waiting to have a proper website built, and not saying you prefer to “do the work” instead of making sales.
“But Lior I really enjoy doing SEO, can’t I just hire someone else to do the sales?” Consider this: No one cares about the growth of your business more than you do.
Therefore the only things you should focus on doing right now are activities that generate cash flow. Prospecting (list building, cold emailing, cold calling, direct mailing) and Sales (consultations, closing deals). They are the most important, and no one else is going to put as much care into them as you will. (It’s interesting to note that the people that really understand this concept fast are ones in a very uncomfortable financial situation.)
You only need to be as good enough of a digital marketer to not only explain it to a prospect and sell it, but to hire for it as well. If you’re still stuck in the mindset of needing to become really good at it before you feel comfortable selling it, you’ll be stuck in that stage for months waiting for your own sites to rank as “proof” that you know what you’re doing (we all know that doesn’t directly apply to working on massive and live client sites.)
Your Very First Steps
You can kill two birds with one stone by developing a proof of concept for a real client before starting sales. The first bird is that you will gain experience ranking or getting leads for a client, and the second is that you will have convinced someone to let you work on their site. You develop this proof of concept by doing free work (or really cheap) for at least 3 people in the same niche.
Understand their lingo, work with their services, and get them results. That way you don’t have to reinvent the wheel for each new industry you stumble upon, and you also just established yourself as an expert with a proven model for getting leads in that niche. Make that four birds with one stone! More on choosing a niche here.
Getting 3 clients is important because it’s also around the same amount of clients you can handle doing the work for before your sales processes start to suffer. I see it all the time with people starting out:
“I just got my first couple of clients so I’m really making sure they get results before I do any more sales.” This is called feasting– money is in the bank and things are comfortable. But what happens when a client leaves or you want to grow? You have to start your sales cycle all over again and that can take weeks, a period called famine.
The way to get around this is by being consistent with your sales processes, especially your outbound sales. Relying on inbound (like referrals, someone magically finding your new website) is like waiting for the bus to come. It might be late, the driver might suck, or it might never come. Outbound is like hopping in your own car- you control when, where, and how the drive goes.
Don’t get started on outbound sales until you’ve developed this proof of concept and are comfortable enough to explain, sell, and hire for it. This stage is also the perfect opportunity to read sales books and start practising your consultations in the mirror, friends and family, etc
Sales is a Numbers Game
Right now I am able to close a deal 1 in every 3.2 consultations I conduct.
How do I know that? Because sales is a numbers game, and I track everything.
But here’s the thing. I need to actually speak to 3.2 people in order to get my next client. So if I’m not speaking to anyone, how will I ever get that client? This is why my core question when coaching students is “what does your outbound sales process look like?”
The #1 impact on the growth of your business is how many prospects you speak to. That’s it.
Open up your calendar right now. How many consultations are booked this week with prospects? See those empty slots? Filling up those slots with sales calls should be your number one goal and what you should be relentlessly taking action on. This is done by prospecting to fill up your pipeline. Outbound sales allows you to artificially fill up your pipeline because YOU determine how many leads get thrown into the top of the funnel.
If you’re giving up after 10 sales calls and little success, it’s because you don’t understand this concept. Either it was too hard for you to speak to enough people (more on that soon), or you made assumptions too early.
Go and do 100 sales calls over the next 4 months. Now you will have enough data for it to be statistically significant and draw conclusions from. Maybe you landed quite a few clients from that. You will be left with two options:
- Do another 100 sales calls and get the same amount of clients predictably
- Improve your sales game and conversions to get more clients out of those 100 calls
- (Increase/lower the price of your service)
- (Increase the amount of products you sell)
This concept is simple and intuitive, but it’s surprising how little people focus on it, and choose to focus on other metrics instead.
The beauty of this is that it’s entirely trackable. You can use Excel or even a simple CRM like PipeDrive and all of this data will be calculated for you.
Soon you will start to develop something called “market intelligence” in which you understand your niche and industry so well that you can improve those conversion numbers by actually rejecting people that aren’t going to be a perfect fit. You will see trends on prospects that don’t close, and you can improve your sales process by only focusing on the ones that are more likely to close.
Now instead of depending on arbitrary numbers like “100 sales calls”, let’s set actual goals for ourselves that we can also track.
Setting Really, Really Smart Goals
“I want to be rich.” “I want to hit 40k/month.”
Are those meaningful goals? Are they likely to be attained just by stating them?
My favourite type of goals and the ones you should be using are called SMART goals. In short, SMART is an acronym for Specific, Measurable, Attainable, Relevant, Time-bound.
So we can rewrite that goal to “Hit 40k/month within 12 months by landing 20 clients.” It’s Specific with a number, Measurable because we have a bank account with numbers, definitely Attainable, Relevant and in line with our overall business goals, and Time-bound with 12 months as a limit as opposed to leaving it up in the air. Now that we have this written, we need to start tracking it.
All of this can be tracked with a simple Excel row. Tracking this will give you daily tasks to do that actually get you to your goals using MATH, not theory or feelings. Simply reverse engineer your goals back down to the small actions you need to take:
- Set a realistic revenue goal for the end of the month using SMART goals
- Determine how many clients you will need to get based on how much you charge
- Calculate how many sales calls you need to conduct in order to close that many sales
- Calculate how many prospects you must engage with in order to have that many sales calls
- Convert into a daily number by dividing by 30 (or 22 to only go with business days)
You should already know these numbers based on your current outbound method, your 100 sales calls data, your industry average, or ask a peer. The great thing about Excel is that if you did these as a formula, you can actually then drag the entire row down to duplicate it and see what your revenue carrying over will be for the next X months.
Click here to Download the Excel Template with all the formulas!
As you get better at sales and your numbers change, you can modify the formula slightly to reflect that. Often this results in MASSIVE decreases in the amount of activity you need to perform per day to hit the same goal.
But what sort of prospecting are we talking about? Let’s delve into the top methods that work really well when it comes to digital marketing agencies.
Prospecting For Digital Marketing That Simply Works
It should be clear now that this post has a heavy focus on outbound sales prospecting. Things that you can actively do to get more sales, as opposed to inbound.
The top methods for inbound would be referrals, your website, social media, SEO and PPC ads. Many people see money signs in their eyes when they think of the endless opportunities to sit on the beach while their inbound ads are working for them to bring in leads.
DO NOT focus on inbound methods until you’ve completely mastered a predictable system of getting clients at will with outbound efforts.
It takes a lot of effort to setup an inbound funnel, and often people get lost in the process, waste too much money, and give up feeling overwhelmed. As described above, with outbound you know your daily tasks and what you need to do in order to hit your goals. There are no if, ands, or buts. No experimentation with creative advertising, just plain old sales that works.
The top outbound prospecting methods will depend on your location and niche. You will be able to supercharge your targeting if you already have a proof of concept and a niche chosen.
Here are my top methods of prospecting that I do as daily tasks:
- Freelance Websites – These people are actively looking for SEOs to hire, and they are HOT prospects. Even though they often post very cheap jobs and you are competing with dozens of overseas freelancers, you can often convince these companies to chat with you and hire you as a premium agency.
- Cold Email – Emailing is completely free and it’s here to stay. Everyone has an email address. All you have to do is target business owners that actually need help with their digital marketing, and email them with value (pointing out where they need help) and/or your proposal. If you’re not using ScopeLeads already to do this in an automated fashion, you should probably check it out now.
- Physical Mail – Physical mail is the most underused yet effective form of outbound prospecting. Think about all of the junk mail and flyers you receive in the mail. Now imagine you received a package in the mail, with something lumpy inside, addressed to you. There is no way you are not opening that package out of curiosity. You can’t even ignore it since it’s going to be bulky sitting on your desk. What you fill it with depends on how creative you can get, but I guarantee it gets attention.
- Direct Outreach – The biggest proponents of your business are going to be your friends and family, especially in the beginning. Everyone I know now knows what I do, and often ask for meetings for their new startups, or get me into a meeting with their bosses. You need to let everyone know what you now do in digital marketing, and make it very public. This can be done with consistent and relevant organic posts on Facebook, as well as directly reaching out to people you know that are business owners or that can connect you with one. Pro tip: You can export your Gmail contacts and blast them with an update too. This is known as “shaking the tree” to see what comes out. Can also be done with email lists from a previous business or from an affiliate.
I didn’t include cold calling as I’ve never done a straight cold call before, and based on my peers, I know it’s not the 80/20 of digital marketing agencies. Unless you have experience with it from a previous job/business, don’t bother with it.
Choose ONE of these to start with and do at least 200 of them before drawing ANY conclusions. Seriously. If physical mail is too expensive, try cold emailing or direct outreach. Even if you are doing this full time, don’t try more than one until one utterly fails (it won’t) or you mastered one.
What will start to happen as you add prospecting methods to your marketing mix is that the data you get back will point to a clear 80/20 of your efforts and results. It could be that 80% of your deals are coming from physical mail yet only requires 20% of the efforts, while the other 80% of efforts are done on freelance sites and only account for 20% of your new clients. Take this tracking seriously as it will save you countless hours and money hiring for these in the future.
A note on following up: DO IT. It doesn’t matter how much you impressed the prospect with value or by standing out from the crowd. A minute later he got another email, received a text, had to go home, or whatever it was that distracted him from taking action and responding to you. Take action for them by following up and moving forward with a yes/no. I can’t stress this enough. It may feel like 200 physical packages is enough to keep you going, but the entire point of the first contact is to get their attention, now our followup call/email will be more welcomed.
These prospecting methods allows us to have the full impact potential of growing our business: the amount of people we speak to on a daily, weekly, monthly basis.
The Most Important Part of All
Keeping your clients is just as important as getting new ones, and for so many different reasons. Obviously the longer they stay, the more billings you have. But then you have other important metrics like Lifetime Customer Value, Acquisition Costs, Turnover/Churn, and while all of these affect your bottom line, they also affect your Prospecting. It’s possible that one source of client stayed longer on average, got better results, or is more of a pleasure to work with.
There will also come a time when you experience the Law of Diminishing returns. This can be when you hire too much and the increase in spend doesn’t result in more clients (for various reasons), or when your rate of on-boarding clients equals your rate of losing clients (attrition). It’s very hard to combat this, except to to have exceptional fulfillment and delivery of results to the client. This means that it is more profitable to keep clients at this point than it is to even onboard new ones.
I’ve discussed the when, why, and how of outsourcing fulfillment in length here. One thing I regret not focussing on more in that guide is hiring a Virtual Assistant to handle most of the tasks. The idea behind outsourcing is that it allows you to focus on-yes you got it- sales, which actually drives growth. That is why one of the core questions I ask is: “are you fulfilling the work yourself?
Starting from scratch, I would only deal with virtual assistants who I invested the time and money into training and catching them up to speed with what I believe is the best fulfillment for my client. The math is just there and it will always be cheaper in the long run than hiring a contractor and of course doing it yourself.
But an interesting thing happens when you’re in the groove of your outbound process and have your averages sorted out… You start to realize that even within your “sales” activities, there are some that directly result in you generating more cashflow, and some that don’t. For example, if landing a client required:
- building a prospecting list
- reaching out to the prospect
- following up
- conducting a sales call
Which one actually resulted in the sale and was the most important? The sales call of course. So as you get busier, you tend to focus and double down on that one thing – sales calls. Meanwhile, you hire for tasks that are not just menial, but that actually result in you directly filling up your pipeline and keeping your calendar full with sales calls.
While this is a bit more advanced, this is just to reinforce that you should be focusing on ONLY doing things that move the needle in your business-AKA generate you cash- at every stage in your growth, even when you think all you are doing is sales.
I think I hammered the most important parts about starting a digital marketing agency from a high level overview. Explaining each of these processes in depth is beyond the scope of one article and I would love to save those for separate posts in the future. However, don’t let any uncertainty stop you from moving forward, experiencing and making mistakes yourself, and using creativity to achieve any of the above.
If it were me starting out from scratch, the absolute first thing I would focus on before putting into practice the sales concepts from the guide above is mindset work. Abolishing limiting beliefs, increasing confidence, reworking my self-belief, and connecting my goals to my overall vision. This will keep you motivated and stop discouragement after any of the countless roadblocks you will encounter on your new journey.
Good luck, and I hope you prosper with your new business!
Let me know in the comments below how you got started, or if you have any questions about this overview!
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