Survival Strategies for Small Agencies
Small agencies are jacks of all trades, but masters of none. Usually, there is no specialization, because it’s just not worth it. Are these statements even true, and if they are, how do these generalists survive?
The question of survival as a small, or the smallest, agency is asked on multiple levels. In a beautiful infographic, Laura Müller and Luis Masallera deal with the human, and social aspects of this question. I definitely don’t want to withhold it from you:
The recommendations are the following:
- Fight for a proper fee, but stay realistic.
- Work hard, but also do some small talk.
- Be friendly, but don’t crawl up anyone’s ass.
- Take off the blinkers so that you can recognize miracles.
- Don’t forget to go home.
- Stand by your mistakes.
- Keep yourself healthy.
- Ask for help.
- Learn to say “no.”
- Take time for your passion.
I assume that no freelancer would disagree with this advice. We could probably call it a core set of advice for a balanced life as a freelancer. Now, if two or more of these freelancers got together, and founded an agency with this mindset, we wouldn’t have to worry about the sanitary basics, neither in physical nor in psychological aspects.
Fast Times, Fast Agencies: The Advantage of “Small.”
Now, it’s time to take care of the business components of small agencies. Those remaining from the nineties, like me, know that we had to keep on learning new things to survive in the business of the web, and graphic design. However, with decent effort, this was still doable back then.
Today, unifying the entire knowledge on everything related to web development, and other design-related topics in one person is simply impossible. Thus, it seems logical for an agency to take care of certain areas only, meaning to specialize itself. But in reality, there are only a few large agencies. Because of that, the path in this direction will probably block itself, even if you wanted to take it.
In my opinion, this shouldn’t be your goal either way, since large agencies are barely any different from other large businesses. You’ll always have that one guy sitting there, ruining your day. It might seem cool when you see the relaxation areas, and football table rooms of modern agencies, and other digitally working businesses. But the truth is, that even these companies also put on their trousers one leg at a time. All of these conveniences have to be earned, nobody else puts money into that. And who makes the money? Right. You, the employee. So don’t be jealous of those that have to put some of their earnings into free latte macchiato or squash arenas.
I would never join a large agency. I’m way too particular, and I have never liked Management by Champignon. My customer care is much more direct, much more personal, and adjusted much more accurately to their needs than it could ever be at any large agency.
Take a look for yourself to see, what happens with big business that is too sluggish to change quickly. Just take Blackberry, Nokia, or Kodak. Former market leaders are shadows of their former selves. Why is that? For one, companies with increasing size become increasingly sluggish, preventing them from acting fast where it’s needed. But a certain size also always comes with some kind of institutional conceit. The human factor becomes relevant. Intrigues are schemed, battles for power are fought. The customer is pushed into the background and turns into a number in the sales statistics.
The smaller the business, the more flexible, the faster it is. These days, speed is an undisputed advantage over the competition. Inflated structures remove the actual service from the client. Take the German Telekom for example. If you have a technical problem, try to get through to a real expert that will fix your problem in the end.
Of course, the state of “too small” is also a thing. When approaching a customer that needs an entire website, telling them that you can only deliver the pixels, but not the code, won’t get you anywhere either. You have to be able to come up with a defined project size from one hand.
There are two ways to do that. You either build up a cooperation network with people whose abilities you know, who you trust, and that wouldn’t rip you off. When it works, this is the best variant. Unfortunately, the human factor broaches way too often, destroying such loose structures faster than they were built.
Once done, it’s rather easy to calculate a number of people. You need x frontend developers, x designers, x backend developers, x SEO strategists, and x others. Writing the business plan can be done pretty quickly after that. Your small agency eliminates the risks of loose cooperation networks but comes with a turnover risk that is not insignificant.
How to Position Your Small Agency
Let’s assume you already own a small agency, and you are generally aware of the advantages. However, large agencies give you a tough time, since their money doesn’t grow on trees anymore, making them step down to small, and midsize customers. Some even undercut your prices, just to pay for their juggernaut of employees. I like to call this money exchange. But for you, this is life-threatening. No theoretical advantages regarding agility or flexibility can help you here. You need something more tangible. You have to communicate.
This is How You Could Approach Customers:
Define Your Target Group
If you have specialized in a certain branch, you have to communicate clearly to this target group. Don’t leave any doubts that, with you and your agency, the person you approached is in the best possible hands. Especially in web design, there are tons of examples of former pastry chefs that now create websites for the craft of baking, or the medical technological assistant bringing doctors into the web of webs.
Set Yourself Apart From Large Agencies
Make clear that the customer will get a counterpart that supervises the entire project, instead of the client being handed from department to department. Highlight your flexibility, and the ability to stay responsive even during the work on the project. Make sure your customer knows that your pool of experts from different disciplines always takes part in every project, allowing for the most innovative solutions to be made up.
It’s not prohibited to hand over the savings from not having to pay for a feel-good manager, a private gym, and a free employee canteen, to your customer, and mention it.
Highlight the Customer Proximity
Big agencies are in big cities, so are big customers. What you want are the small and medium-sized enterprises that can be anywhere. I once randomly found a company with 400 workers in a secluded forest in the middle of nowhere.
Proper supervision is important to these customers. This is possible if you are close to them, and not have to travel all the way from a large city. Another advantage is that you know the region if this were to be a factor in marketing. The aspect that you can drive over to the customer is huge. Don’t underestimate the psychological effects of good client supervision.
Of course, it’s tempting when the internet allows you to work for any customer in the world, no matter where he is. But it’s a fact that people don’t work like that. Humans do business with humans. Don’t waste your time casting your net so far that you won’t catch anything in the wide meshes in the end.
Focus on Quality
This sounds profane, doesn’t it? However, when I look at what some large companies produce, I can only shake my head. Quality does not seem to be a factor there. I can actually understand this.
In the large agencies that I know, the commission is done once it has been placed. What’s that supposed to mean? Well, there is a lot more attention on the acquisition. In at least weekly meetings, the leads are being talked about, and the liquidity is being complained about. Once the commission has been placed, the customer becomes a part of the turnover list, and, tragically, his commission has to be completed on top of that. Shoot, but hurry up. So that we don’t have to put too much money into it.
You should do this very differently, with the old manufacture concept in mind. In the end, the result will be the best one possible. Your focus is not on the placement of the commission, but on its completion.
These are my tips from 25 years of experience in a fast-paced branch. What do you think about the topic? Are you a freelancer, or an employee of a small, or large agency?