The agency world doesn’t need to be so intense

Being a WordPress Agency.

Ambitious, driven, and ultra-competitive is how the UK agency marketplace is viewed by many founders.

This creates a raft of challenges for the modern agency, driven by a relentless need to grow.

However, growth-for-growth’s sake is a poor substitute for good management, sustainable planning and longevity. We all know what happens to trees that grow too fast! Plus, very few agencies go broke due to lack of sales: Too often they fail due to over-expansion and the inherent problems this causes.

As the UK agency market is growing so fast, the temptation to expand, and to take every deal on offer is difficult to ignore – but comes at a price. A growing agency suffers with a number of laggard factors that, if not managed carefully, can easily reduce it’s long-term stability at best, and at worse could sink the business.

Laggards and legacy are killers

A growing business quickly adapts to new market conditions, but not every metric adapts fast enough – and these are the laggards that can cripple agencies, including low-pricing, legacy clients, over-promising, incorrect skill sets, poor client service, staff turnover, cashflow management, and excessive firefighting.

And the cost of dealing with these issues affects profitability, client retention and quality of delivery. And these three items create a dangerous spiral that many founders simply fail to understand. A well run, stable, business suffers none of these issues.

Which raises the very real question: “Why do we need to grow?”.

Sure, the allure of more money, “ruling the world”, selling-up, moving on and even peer acceptance might sound like lofty aims. Except, mostly they are not. Mostly, these are internalised needs, and these don’t match the needs of clients so there will always be a disconnect.

If the agency and the client are working to separate agendas, the long-term relationship will never be as healthy as if they had shared goals, values and vision.

The fact agencies blindly grow for growth sake is still one of the most elementary business mistakes made by inexperienced founders. Planned growth with a defined purpose and clearly defined plateaux requires strict business goals and a deep understanding of the market, clients and the services offered.

Sustainable business rarely comes from am opportunistically growing business, but from a stable company that converts recurring revenue into net income in the most efficient manner. Efficiency comes (mostly) from great client service, zero firefighting, strong cash reserves and a right-sized workforce – stuff that’s nigh on impossible in a quickly expanding business.

Less really is more

The most successful UK agencies mainly operate using a value-pricing model – the value comes from the quality of what the agency delivers, not the quantity, and rarely the price. And the only true measure of success is longevity – driven by long-life client relationships, sustained financial stability and mutual satisfaction.

Burning bright and dying young might seem a glamorous way to go, but rarely sees any winners. And no-one remembers the dead – in the UK, failed agencies and their founders are vilified for poor business acumen, wasted opportunity and the inevitable trail of destruction they leave behind.

Small giants

We believe there is a greatness to staying small, profitable and living long into old-age. Smaller is obviously more agile, and in a world where modern working practices rarely reward economies of scale, it’s a brave call to try to build a monolithic agency from scratch as it needs the kind of skills and experience that are rarely found in the UK agency startup space.

Being small is not without it’s risks: fear of pricing, client inequality, scaling, and flexibility are the primary ones. But, mostly, these are in the mindset of the founders and grounded in fear, indecision and a lack of experience. Being stable, and not seeking pointless growth gives the founders the mental and emotional bandwidth to comfortably manage the risks.

It is often said that “80% of success is just showing up”, and regardless of which path the agency takes, you need to know when and where to show up, and then what to say. And never forget, recognise the importance of humility over hubris.

We’re proud to be small giants: Over the last 20 years we’ve served less than 200 companies, whilst helping build billions of revenue across 5 continents. Today, we work with less than 25 clients who generate in excess of £100m of digital revenue – using a team of just 15 people. We’re measured, and not intense – our aim is to sustain a business that will thrive for another 20 years.