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The Discipline of The Efficient Agency
An efficient agency is a byproduct of discipline & courage
Tim Kilroy
17 Jun • Estimated Reading Time: 11 minutes
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In This Week's Epistle
Percentages, Ratios, Multiples & More
Marketers are obsessed with efficiency. We measure efficiency in 5 million different ways:
Conversion rates
MER (Marketing efficiency ratio)
CPA/CPL
Time to Conversion
ROAS
ROI, etc.
We use these kinds of efficiency metrics in our case studies and emails. We use them as performance benchmarks and spend hours analyzing efficiency from all different angles. Heck, even your profit and loss statement is really just a statement that measure how efficient you are in turning labor into profit.
We are all excited about AI & workflow automation because of how much more efficient we are going to be. More efficiency everywhere…huzzah!
Where We AVOID Efficiency?
Listen - I love all of you. You are amazing and ambitious and talented. So please hear this with all the support & caring you can:
YOU ALL ARE BIG GIANT SCAREDY CATS (MOST OF YOU, ANYWAY).
Its true - I know that for most of my agency career, I operated from a position of fear - fear that the next great lead wouldn’t say yes, fear that clients will churn, or fear that it would all crumble.
We compensate for those fears by being bland, beige, boring, so:
We create positioning that is too broad
We offer as many services as we possibly can
We don’t challenge our client’s assumptions
We respond to client demands
We don’t take the opportunity to stand out & stand up.
And that makes us less efficient.
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It All Starts With Positioning
Let’s not confuse positioning with target market (or niche) - they are different. Niche is who you sell to - positioning is what you sell - no, not the service, but rather the value that you sell.
There’s a book - The Discipline of Market Leaders - that was really influential in the early 2000s. The quick synopsis is that in order to stand out in any market, you have to attach yourself to a specific kind of leadership - price, product, or service. You can’t own more than 1 position. You lead in price or product or service. Typical examples, so you can wrap your head around it quickly:
PRICE: Old school Amazon or Walmart —> Always lowest prices
PRODUCT: Apple or Porsche —> Always best in class products
SERVICE: FedEx —> Always on time
I would say the world is a little more nuanced than that, but relative to your agency, you might reframe this accordingly:
PRICE: Simple pricing, productized service, one size fits all
PRODUCT: This is the traditional “this is our process and that’s why we are worth it” kind of sale
SERVICE: This is deeply consultative and emphasis is on understanding, data, custom work and deep client integration.
You know what ISN’T in this market leadership matrix?
CRAZY CLAIMS
But Wait - What About My Case Studies?!?
When you promote 8,389% sales growth through Meta Ads or whatever, no one believes it - even if it is 100% true. You know that was an edge case. Prospects know that it was an edge case. Don’t try to sell that as anything other luck at being in the right place at the right time…
You should sell against your case studies that are real and representative of the way that you work and think. I once had a client who went from $4K/mo in sales to almost $200K/mo in sales in under 100 days. Was that amazing - yes! Did it happen because my team was amazing? I don’t think so. I think it was a really unique product that had a significant marketing budget for the 1st time - so it took off. We never sold against that case study because it wasn’t the result of a problem we solved…)
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Discipline + Bravery = Efficiency
The book is called The DISCIPLINE of Market Leaders for a reason. Deciding to compete on price or product or service takes conviction. A business has to have courage to not waver and try to be all things to all people. It has to stand for something clear and obvious if it wants to be a market leader.
In the agency world, there are few “market leaders” because it is a hugely fragmented market. But let’s talk about discipline and bravery in the context of agencies:
It takes discipline to NOT make an offer to a bad-fit prospect.
It takes courage to tell a client that “the way they’ve always done it” won’t work.
It takes discipline to NOT offer a discount to win a deal.
It takes courage to say to a client, “We aren’t as good at that channel as we are at these others, so we are going to bring in a partner.”
It takes discipline to only sell into the markets where you really can have an impact, and not chase all markets.
It takes courage to tell a client “We screwed up.”
It takes discipline to create processes that are rigorous but flexible enough to adapt to the specific client circumstances.
It takes courage to put limits on a client who is hungry for scope creep or treats your staff poorly.
It takes discipline to keep your team learning and improving.
It takes courage to lead your client rather than be lead by them
All of this creates more efficiency because:
You do not waste time & energy chasing markets and companies you can’t serve well and only make offers to right fit clients.
You keep your margins in better shape because you don’t discount or over-service your clients.
You keep clients longer through alignment, transparency, leadership & skill development.
You keep employee churn low by giving them authority and autonomy to lead clients as well as improving their skills.
Here’s a little homework for you…
What is the discipline that you need to fortify as quickly as possible?
From the hundreds of agencies that I have worked with, in order, I would say:
The discipline of service/market fit (who is your right target and how do you you help them differently than anyone else)
The discipline of client leadership (telling the client how they need to change in order to take best advantage of market conditions)
The discipline of team authority & autonomy (many agency founders don’t give their team the authority and autonomy to do the best thing for their clients and the founder jumps in and disempowers the team)
The discipline of growth (many founders confuse agency growth with revenue growth - revenue growth is a function of selling more…agency growth is the result of investing more in your team, their processes & tools)
Reply to this email with what disciplines you need to develop and I’ll shoot you some advice!
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