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How Fast Should Your Digital Marketing Agency Be Growing?

Lauren Lawson 4 months ago Sales Enablement

It could take at least two to three years before your PPC ad agency becomes profitable and even longer to find a repeatable and replicable process that can yield sustainable growth and the successful scaling your agency longs for.

Given that timeframe, it is more crucial than ever to constantly review your operational needs such as office space, account and sales manager skill sets, digital marketing enablement platforms, PPC tools, and your business’s capacity to take on future expansion.

Yes, you may be a business that is moving in the right direction, with happy clients and steady revenue growth, but the question that always lingers in any business owner’s mind is: “Am I growing as fast as I should?”

Ask that question again but with a slight twist: “Am I growing as fast as I can?” and you may find the answer is easier than you thought.

Analyzing Growth

I happened to come by an essay that knocked it out of the park: Startup = Growth by Paul Graham. In this article, he emphasizes that continuous growth rate analysis is how you reach success.

He clarifies that if a company is to continue growing, then it has to be scalable and fall within the following criteria:

  • Provide a service or product that consumers frequently need
  • Have the ability to reach and serve all consumers

Being constrained in either criterion determines whether or not you are a start-up.

Business Stages

A business goes through three stages of growth, according to David Skok:

1. Stagnant-slow growth: Discovering an equitable product-market fit, usually when a business is just trying to figure things out.

2. Quick-inconsistent growth: The product or service is on-demand and is successfully distributed; however, a profitable and repeatable sales model that is scalable has yet to be established.

3. Slow-consistent growth: Scaling has been achieved, and the business is up against internal and external limits.

  • Internal: limitation of bandwidth and resources
  • External: limitations of its market

Success Rate

According to Forbes, the survival rates of small business are:

Business Rate Survival

What Rate Is Acceptable?

Paul puts growth into perspective, saying that 5 to 7 percent per week is acceptable but achieving 10 percent per week is extraordinary.

Very few will accomplish an extraordinary number week over week, but sticking within an acceptable range should be the goal for any business that wants to grow at a decent pace.

To measure a growth rate effectively, you should base it on your business revenue and, as a last option, acquisition. If we analyze the below graph, you can see how the percentage margin of growth begins to narrow as businesses get older, making it more challenging to hit ideal quarterly and yearly growth rates.

Average Forcasted Annual Revenue Growth

Operations and Resources

Now that we have covered some stats regarding business growth rates and the pursuit of its consistency as a business endeavor, let’s go over the other component that will make or break its achievement.

Team Expansion

You need to ensure your team has the capacity and, most importantly, the skill to continue supplying the demand for digital marketing services. While a skilled staff requires a high investment, it does weigh in heavily for the quality of service provided.

As an agency, you’ll need to determine if there’s room for improvement in your teams’ processes and effectiveness. Once this has been explored and fulfilled, you’ll have a clearer picture to project how many new hires will be needed throughout the year to contribute to your growth goals.

The right ad agency management software can help you avoid onboarding too many employees when you could, in fact, operate and hit goals with only half of the team. This resonates with the same concept that hiring new employees is more costly than investing in your current staff by improving their knowledge and skills.

Client Retention

Your existing clients’ value is far more important than what you think will come in from a prospective client. Revenue growth within your current portfolio is consistent and has a higher lifetime value, which is something you’ll want to retain at all costs.

“Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” – The Value of Keeping the Right Customers, HBR.org.

This point ties in perfectly with emphasizing the need to build skilled staff who can provide proactive retention efforts towards your clients and transfer these skills to others.

Sales Enablement

Agency Growth

Knowledgeable and proactive teams that are capable of promoting growth for your company are essential to your long-term success. Pairing them up with a powerful sales enablement platform and intuitive PPC tools can help them become more efficient than ever.

PPC sales enablement and collateral have kept our need to hire at a minimum while maximizing our teams’ output potential.

The Secret For Agencies to Streamlining

Your Agency Growth

When it comes down to it, only you can make decisions for your agency that will take it where it needs to go.

Have a plan and make use of effective agency management software to review its progress and ensure it grows at the right pace for you and your clients.

Compass can help. If you’re interested, we can go over PPC tools that can make a difference in your agency’s development.