While most firms are struggling to adapt to the new business environment brought on by the COVID-19 epidemic, demand for digital marketing agencies and services is rising. Online marketing has become standard practice as more companies are forced to develop digital campaigns to differentiate themselves from the competition and boost their bottom lines.

No industry is exempt, however; statistics from ProfitWell revealed that even entirely online subscription-based SaaS companies have been finding it difficult to attract new clients and must instead deal with the elevated risk of client attrition.

You’re undoubtedly considering scaling up if you’re trying to meet the increased demand for digital marketing agencies. This is no small task, and you’ll probably experience some growing pains, but if you take the necessary safety measures and processes, you can minimize the discomfort of the change.

In this article, we’ll outline several tactics for scaling your digital marketing business in the current climate without compromising on client satisfaction or service quality.

• What are the Challenges of Scaling a Digital Marketing Agency?
• How to Scale a Digital Marketing Agency?
• What are the KPI With a Marketing Agency?

What are the Challenges of Scaling a Digital Marketing Agency?

Let’s first look at the difficulties one can face in developing a digital marketing business so that we can better grasp our scaling tactics. As you scale, you’ll be able to avoid these problems in your agency by knowing exactly what to look for.

1. Increasing Client Churn

According to this Forbes article that reported the results of the latest Biz2Credit Small Business Financial Health Survey, in the second quarter of 2020, small business owners’ sales fell by 52% year over year while their payroll costs fell by 54%.

Read Also: What is the Best Way to Learn Digital Marketing?

This is, of course, largely due to COVID-19’s effects. Some firms were forced to shut down for a period of time in early 2020, and we can also assume that clients’ shifting purchasing patterns simply led to reduced earnings.

Businesses may have had to terminate contracts with their marketing agency as a result of having to reassess their priorities. Churn may be a major issue for digital marketing organizations striving to scale because when a client abruptly cancels their contract, the agency might be left with an excessive number of employees and insufficient resources.

2. Low Profit Margins

Profit margins for the whole digital marketing sector, according to a 2019 Promethean Research poll, are estimated to be approximately 18%, however many agencies, especially small to medium firms, only have between 11% and 15%. Especially if you have to maintain staff compensation and expand your payroll budget to take on new talent, this can be difficult for agencies who are seeking to scale.

Before justifying the expense of adding additional team members, agencies frequently need to attract new clients or upsell their current ones. However, this also presents a problem because current teams and staff must undertake additional tasks before they can hire more people to help balance the workload.

It becomes a delicate task to hire new talent at precisely the right time to support your agency’s current effort to scale because the ad industry is known for having higher-than-average turnover rates, with compensation cited as one of the main reasons a digital marketing employee might leave their agency. This brings us to our final challenge.

3. Finding Quality Talent

Of course, with such fierce competition, it can be challenging for a digital marketing business to acquire qualified people. It is no different when trying to recruit fresh talent to either fill in the gaps or help your agency grow to influence employees of one firm with the promise of greater pay, work-life limits, and career progression.

According to WordStream, finding and training new personnel is the third-biggest difficulty for agencies.

Employers have begun to address this issue by presenting themselves as openly as possible, emphasizing their workplace cultures, and making ongoing efforts to offer employees pertinent benefits, such as mental health programs and extracurricular perks, to make their employment more comfortable despite the fast pace.

How to Scale a Digital Marketing Agency?

Even if you have the best talent or product in the world, you’ll be setting yourself up for failure if you don’t have mechanisms in place for growth.

To help you scale your digital marketing business, we’ll be sharing some practical techniques today. You can put these suggestions into practice as soon as you start receiving new clients in order to expand your business and ease your headaches.

1. Automate Your Reports

If your company is like the majority of others, you likely began by performing all of your customer reporting by hand. Once more, most modest agencies do. Even though it may be annoying, that initially works.

But eventually, your business expands. And all of a sudden, manual reporting is simply insufficient.

Putting together analytics from all of your clients’ various marketing platforms isn’t that difficult when you only have one or two clients. But you also need regular reports for any new client you add to your books. And it quickly turns into a task that takes up an increasing number of hours each month.

Work smarter, not harder, if you want to grow your digital marketing agency. It is not a good use of your time to spend hours manually compiling customer reports. Additionally, it’s challenging for people to maintain the consistency and accuracy that Metrics Watch’s automated reporting solution can.

You look unprofessional if your reports are late or wrong. Furthermore, there may be better places to spend your team’s time. By automating your reports, you can free up their time and improve the level of service you provide to your customers.

2. Put Efficient Systems in Place

Workflows that are ineffective can be used by a team of one or two persons. It makes sense that in the beginning, you will prioritize your clientele over administration.

However, shoddy working practices don’t scale well.

When your agency starts to expand, something that took longer than necessary when you had a small number of clients now takes much longer. Systems must be in place when you begin to hire more people to ensure that everyone is operating in the same direction.

Everything runs more smoothly when workflows are optimized. Your entire team is familiar with these procedures and how to follow them. This means that you won’t be wasting time.

There should be a standardized process in place for everything, from employing new employees to billing clients after delivery.

3. Hire the Right People

You will eventually need to hire more employees as your digital marketing agency expands. It’s fantastic to see your team expand and your capabilities rise at this time.

But once you start to scale, every hire has a significant impact. Small teams rely on each member contributing, cooperating, and taking accountability for their duties.

Putting excellent hiring policies in place from the beginning can help you locate the appropriate people and offer you something that can scale with you as you develop, despite how tempting it may be to just bring in friends and current contacts.

Excellent new workers can be attracted with the support of clear role descriptions, well-documented shortlisting and interview processes, and strategic job postings.

4. Outsource Where Needed

You likely had on every hat there is when you first launched your marketing firm. Owners of small businesses frequently perform all duties, including finance, human resources, sales, marketing, and client relations.

Your time increases in value as you start to mature. You are the boss in addition to working for your own clients. You’ll need to be present to help your team, make decisions, and direct your organization to greater success.

Certain obligations are truly your sole responsibility. However, many people don’t. Decide what you can assign, then do it. Where necessary, outsourcing is also included. A consultant is capable of managing finances, human resources, and recruitment, frequently at a lower cost than hiring someone directly.

5. Remember Your Own Marketing

The proverbial shoemaker’s offspring are said to be barefoot. The marketing for the digital marketing agency may follow a similar path.

Even though your crew is quite knowledgeable, it is mostly focused on enhancing the brands of your clients. It’s possible for your personal online presence to fall off the priority list.

Make time for marketing your own company as you seek to expand your agency. When your budget permits, you should designate this as a specific position inside your agency. It is ensured that this remains a top priority by having someone whose primary duty is to draw in new customers.

6. Add New Services

You could initially only be able to provide a small selection of services to customers. However, when you add more members to your team, your ability and diversity of knowledge expand.

As a result, you can begin to provide additional services, which is a great approach to grow your business. You can broaden your prospective clientele while upselling your new items to current customers.

Investigate the needs of businesses in your niche before introducing new services. Offer items that are in high demand, go with your current offering, and are reasonably priced. If your team doesn’t already have the necessary talent to deliver the new service effectively,

7. Invest in the Right Tools

Nothing is more annoying than trying to complete a task without the necessary tools. The good news is that there are many choices available to simplify the life of specialists in digital marketing.

Naturally, those tools are expensive. However, spending money on the appropriate software can significantly impact your agency’s potential to grow.

This includes both marketing-related tools like SEO, automated reporting, and social media management as well as solutions that streamline your processes like CRM, project management, and accounting software.

These tools let your staff provide the finest service to your clients while saving you time.

8. Foster a Culture of Learning

It can be tempting to focus all of your efforts on luring and satisfying clients while you work to develop your agency.

The time spent away from such tasks won’t bring in money and may seem to be wasted time. But hiring and keeping skilled employees is essential to your agency’s long-term success. Making learning and professional development a top priority is the best method to expand the competence on your staff.

Ensure that your staff members have the time and resources to continue their education, stay abreast of industry developments, and develop their expertise. Establish a culture of curiosity in your business.

Your employees will show their commitment in return for your investment in their professional goals. In the long term, you’ll also wind up making more money because your team’s expertise and experience are always expanding.

9. Track, Evaluate, Respond

How can you tell if your marketing initiatives are accomplishing your clients’ objectives? You monitor the outcomes, draw insightful conclusions from the data, and apply what you learn to continuously improve their efforts.

As you expand your digital marketing firm, that same evidence-based strategy will prove invaluable.

Monitor every facet of your brand’s performance, as well as the marketing activities of your clients. Financials, customer retention, employee satisfaction, and marketing KPIs are just a few examples of metrics that can help you determine whether you are on the right track and where space for development exists.

You may use this data to determine your strategy and approach for the coming year, pinpoint areas for future growth, and find new opportunities.

What are the KPI With a Marketing Agency?

The effectiveness of your marketing efforts in luring potential new consumers is the subject of lead generation KPIs. Any marketing expert will tell you that, depending on the kind of campaign you’re running and the user’s unique path to finding you, a lot goes into lead creation. Here are a few crucial KPIs to monitor for lead generation:

1. Monthly new leads

You can determine how successful your marketing activities are overall by keeping track of the quantity of new leads created each month. If there is a sudden, significant reduction, look more closely at those campaigns to determine how they might be improved.

2. Primary lead sources

Or to put it another way, how did your leads hear about you? You can get a sense of where your audience is by keeping track of the number of leads produced by each source (organic search, digital ad campaigns, referral traffic, social media, etc.). This will also help you determine which channels are most successful for you.

3. Marketing Qualified Leads (MQLs)

Based on marketing efforts, these leads have in some way expressed interest in your good or service. This typically indicates that they have provided their contact information voluntarily, completed a form to download a white paper, chosen to receive a newsletter, etc. Monitoring the number of MQLs you produce each month can be a helpful indicator of the efficacy of your efforts and the contribution of marketing to the whole sales process.

4. Sales Qualified Leads (SQLs)

The sales team decides whether MQLs qualify as a sales qualified lead after passing them along to the sales team (SQL). Teams typically qualify leads by comparing MQLs to their desired client profile, however the particular criteria may vary (demographics, industry, location, etc). If too few MQLs are turning into SQLs, it could be wise to review your marketing tactics to make sure you’re luring the right kind of clientele.

5. Cost per lead (CPL) 

Cost per lead, which is also a price model for digital advertising, describes the amount of money spent on marketing for each lead produced in the context of digital marketing KPIs. Divide your campaign’s overall marketing budget by the number of leads it produced to get at this figure.

Narrowing your target audience will help you increase your CPL by ensuring that the people who view your advertisement are the ones you want. If segmenting your audience will help you better target each segment if that is the wrong method for you, try it. Last but not least, carefully examine the content of your ads to ensure that it contains a call to action that is both clear and effective.

6. Cost per conversion/ Cost per acquisition (CPA)

Cost per conversion, like cost per lead, determines how much a campaign spent to bring in actual customers. Divide the campaign’s overall marketing budget by the number of conversions to arrive at the figure.

7. Average time of conversion

This metric gauges the effectiveness of the conversion process by examining the typical time it takes a client to convert. You first need to know the total amount of transaction time for the period or campaign you are evaluating in order to compute it. Multiply that total by the number of conversions.

8. Customer Retention Rate (CRR)

This indicator tracks the frequency with which current clients come back to conduct business with you. It can indicate how happy and devoted your consumers are to you and, on the other hand, serve as a warning sign when there is a sharp fall. Subtract the total number of customers at the conclusion of the period you’re analyzing from the number of new customers to determine your CRR. Then multiply the result by 100 and divide the result by the initial number of clients.

The first step in raising your CRR is to examine more closely at the clients you did lose and try to determine why. Has your product, service, or other endeavors recently changed? Have you had any feedback from customers? Other helpful techniques include developing a strong customer feedback system to head off possible problems, stepping up your customer education efforts, providing rewards for loyalty, and talking more frequently and directly with your consumers.

9. Conversions

You might track a few distinct kinds of conversions in digital marketing. You may determine the effectiveness of your digital advertising campaigns and website text by calculating the conversion rate of visits to leads. You can determine how well-targeted your efforts are and whether they are generating the correct kinds of leads by calculating your leads to opportunities conversion rate.

One thing to keep in mind while measuring conversions is that it’s more beneficial to consider conversion in connection to particular data slices (e.g. mobile conversion, by location, etc.). More actionable data will be produced as a result, which you may use to advance.

10. Returning vs. new visitors

You may determine whether you are successfully attracting new visitors to your website by comparing the number of returning visitors to the number of new visitors each month, as well as whether those people connect with your material sufficiently to desire to return.

Read Also: How to Become a Digital Marketing Strategist?

If there aren’t enough repeat visits to your website, it’s possible that they’re having trouble navigating it or aren’t finding what they’re searching for. You may need to improve your SEO if you aren’t drawing in enough new visitors.

11. Average time on page and session duration

In contrast to session duration, which shows you how long a user spent on your website overall, across all the pages they visited, omitting entrance and exit pages, average time on the page refers to the average amount of time a visitor spends on a particular page (i.e. reading your blog post).

Look more closely at your content if either of these numbers is too low. Make sure your material meets their expectations and is substantial enough to hold their interest by carefully considering the kind of information a user might be seeking while visiting that page.

12. Website conversion rate

Simply divide the total number of sessions by the number of conversions for the campaign or timeframe you’re monitoring to determine your website’s conversion rate. Multiply the outcome by 100 to express this as a percentage. This number might be helpful in illustrating the importance of your website in the sales process.

Make sure you’re offering easy ways for customers to learn about your products or services and contact you about them if you want to increase the conversion rate of your website. Verify that any page that would be relevant contains the essential details, including an easy way to reach you.

13. Click-through rate (CTR)

CTR, in its most basic form, is the frequency with which users click links that lead to other pages. As a result, you may assess CTR for internal links on your own website as well as organic search results and online advertising campaigns. To figure it out, just divide the clicks by the impressions, then multiply the result by 100 to get the percentage.

Look more closely at the context of those links to raise your CTR. Are the links visible to the user and obvious? Are you giving users enough information to help them understand what to expect when they click, and does the landing page live up to those expectations? Are the links relevant to that page, and do they provide sufficient value to the user?