Growing Your Agency With The 80/20 Principal

At the beginning of Veza Digital, I focused all my attention on closing new deals based on the perception of social proof, credibility from other brands, and providing case studies in a sense to help the prospect decide to go with us. It worked for us, my close rate at the time was around 20% and it helped us grow initially. The problem was, we got a lot of low-level clients who quite frankly paid too little and asked for too much. This was happening more frequently than we liked and we realized that if we want to scale past $100,000 per month, we needed a change in mindset and how we do everyday things.

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Introducing 80/20

After a couple of months of struggling to out-compete other agencies for our client-facing business, I realized that our high-paying clients were A) the most profitable and B) less stressful because they didn’t ask for much. It was this moment when I took a look at how much was being paid to us and I took all the top-paying clients and saw their deal size, and literally from that point on, all new clients who came to us would have a floor pricing of what our top clients had been paying us.

My goal at this point was to charge so high that we had no competition, of course with charging high you need to have your A-Game at all times. This includes; giving value, and yes value can be subjective, but consider all the things that prospect value:

Lifecycle Responsiveness - Even during the proposal stage you want to be quick to give them a proposal that is clear cut, to the point, no fluff of what they get, how much they pay, and timelines. This is a direct reflection of the quality of your work after they pay you. You want your account managers to be responsive with client touch points and check-ins and always move the dial to spend more time with you every month.

Talk about the future - No one likes it when they’re speaking with someone and all they talk about is WHAT they get. You need to articulate to the prospect how it is going to benefit them in the end and what it’ll cost them in terms of speed to markets, new revenue, conversion rate, etc. This is a mindset you and your team need to have throughout the client lifecycle.

Guarantees - You need to be ultra-confident in your pricing and offer your prospect guarantees if they choose to work with you. I learned that guarantees will out-pace “case-studies” or “testimonials” 10 to 1, every time. People are on the edge for a reason, showing previous work is good, but talking about the future and offering guarantees will do wonders for your growth.

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Right now, I want you to do the following exercise in your agency. Look at all of your clients who are paying you either monthly retainers or per project and see how much money you are expected to earn from them this month. Rank them in your Excel or Google Sheets from 1-20.

It needs to look somewhat like this:

Let’s say you have 20 clients that are paying you monthly retainers or per project. You want to focus your efforts on the top 7, retain them, upsell/cross-sell them, and then make a plan to get your 8-14 to the top 7 by doing offering more value to them. Honestly, your 15-20 clients are usually small projects, but it’s good to have them on board and continue building a relationship with them. You need to talk to your 15-20 about the opportunities you are creating for 8-14s. For your 8-14s, you need to talk about the premium service they’ll get when they’re 1-7. I would recommend you read the book The 80/20 Principle by Richard Koch.

Lastly, if you are working on project-based timelines and payment milestones, I would recommend that you do an audit on your delivery workflow and how it affects timelines. It can be surprising after you analyze your delivery workflow to see missing gaps that could be expedited to finish the project sooner and as a result, you get paid sooner. A lot of times our white-label marketing partners tell us stories on how they’re waiting for clients to send something or approve an update, which is valid reasons. But of course, if you properly manage your workflow at the start you can plan for these things or request them earlier. If you are struggling to map out your workflow, client touchpoints and requirements gather, contact us today.

The key to scaling your agency past $100,000 per month is realizing RIGHT NOW that you can be charging more, delivering projects faster, and moving your existing clientele up the 80/20 ladder.