Agencies must diversify or die?
2020 has thrown one hell of a lot of challenges at us, but on the whole agencies seem positive about the future according to The Drum’s Agency Outlook Report 2020.
42% of agencies surveyed by The Drum said revenue has significantly reduced in 2020, however 56% have confidence in Q4 business performance. And 60% expect revenue to increase in the coming 12 months.
These green shoots of confidence have in part been built thanks to agencies ability to pivot and adapt during these challenging times. 68% of agencies revealed they have changed their service offering in 2020 or intend to do so in the next six months.
But how will this diversification of services impact agencies in the long term? In the short term, offering more services to fewer clients seems like a strong strategic move. However, when the world returns to a semblance of normality, could we be faced with an even more homogeneous agency landscape than we already see?
Long term success for agencies will be found when they understand and can successfully communicate where they live within the sea of 28,000 UK agencies available for clients to choose from. It is easy to fall into a trap of becoming all things to all people in order to survive but agencies mustn’t lose sight of their core values and reason for being if they want long term success.
Follow these three marketing tips for agencies planning to diversify.
1. Only introduce new services that truly compliment your current offer, values and positioning.
Any new offer must align and build on what you are already good at. There are likely many other agencies with years of experience offering this service which is new to you. It must therefore feel authentic to live within your suite of skills and relevant for your current client base to want to buy from you, rather than an existing expert. Ensure your communications tell the story of your proposition effectively.
2. Test your new service offer with current clients.
It makes sense to offer your new services to the relative safety of your current client base. You are after all more likely to up-sell a current client rather than convert a brand new one, especially this year. However, treat them as you would a hot prospect and offer them the value adds you would when hunting a new client. Create high-value content to help nurture them along the path to purchase and work hand-in-hand with your account teams to offer seamless communications on your new offer.
3. Don’t lose your ‘special sauce’
Adapt your marketing and communications strategies to reflect the new offer without losing what is unique to you. Brands increasingly want to work with agencies that reflect their business and customers. It’s therefore OK to not be the right fit for every client and the agencies that can maintain their ‘special sauce’ in hard times will reap the rewards ultimately.
If you would like to discuss how to communicate and market a new service offering for your agency, get in touch.