THE PROFITABLE AGENCY [INBOUND 2014]
Transcript of THE PROFITABLE AGENCY [INBOUND 2014]
#INBOUND14
the profitable agencyhow to a*ract, retain and grow a profitable client base
sept. 16, 2014
presented by paul roetzer (@paulroetzer) CEO | PR 20/20
of marketers think markeEng has changed more in the past two years than the past 50 !source: Adobe Digital Distress
76%@paulroetzer www.pr2020.com#inbound14
the consumer is the true change catalyst
@paulroetzer www.pr2020.com#inbound14
90% of daily media interac;ons are screen basedsource: Google, The New MulE-‐Screen World
@paulroetzer
B2B buyers may be
up to 90% through their journey before contacEng a vendor. !source: Forrester
image: Jayneandd
@paulroetzer www.pr2020.com#inbound14
Source: Google
Every trackable consumer acEon creates a data point, and every data point tells a piece of the customer's story
@paulroetzer www.pr2020.com#inbound14
Source: Chiefmartech.com
the customer journey does not follow a linear path defined by marketers
@paulroetzer www.pr2020.com#inbound14
Define FoundaEon Projects
blog posts podcasts website video email
webinars mobile apps
tailored markeEng through a deep understanding of buyer persona needs + the ability to deliver personalized messages
Image: HubSpot
we have entered the age content, context and the customer experience
@paulroetzer www.pr2020.com#inbound14
Define FoundaEon Projects
create more value, for more people, more oDen, so when it’s Eme to choose,
they choose you
new marketing imperative
what’s holding businesses back from achieving performance poten;al?
image: Xurxo Marcnez
talent gap + tech gap + strategy gap = PERFORMANCE gap
@paulroetzer www.pr2020.com#inbound14
of marketers say their lack of skills is impacEng revenue in some way !source: 2012 MarkeEng Skills Gap Report
75%@paulroetzer www.pr2020.com#inbound14
of companies lack necessary digital skills in key areas of social media, mobile, internal social networks, process automaEon, and performance monitoring and analysis. !source: Capgemini ConsulEng
90%@paulroetzer www.pr2020.com#inbound14
a talent war has begun
for tech-‐savvy, hybrid marketers
capable of building, managing and execu/ng
fully integrated campaigns that produce results
@paulroetzer www.pr2020.com#inbound14
agile, adept at advanced marke;ng tech, and experts in inbound strategy
@paulroetzer www.pr2020.com#inbound14
how do we find the unicorns?
@paulroetzer
only 1 of the top 10 markeEng programs in the U.S. has a required undergraduate
digital marke;ng course
source: U.S. News & World Reportimage: IUB Facebook
businesses must take the ini;a;ve to mold their own modern marketers
@paulroetzer www.pr2020.com#inbound14
by 2017, the CMO will spend more on IT than the CIO. !
source: Gartner
IT = CIO CMO
@paulroetzer www.pr2020.com#inbound14
6 classes, 43 categories, 947 companies
ExactTarget IPO (Mar '12)
Eloqua IPO (Aug '12)
ExactTarget buys Pardot (Oct '12)
HubSpot raises (Nov '12)
Oracle buys Eloqua (Dec '12)
Marketo IPO (May '13)
SF buys ExactTarget (Jun '13)
0 5 10 15 20 25
$161.5M
$92 M
$95.5M
$100 M
$871 M
$79 M
$2.5 B
venture funding, mergers, acquisiEons and IPOs fuel the martech industry
@paulroetzer www.pr2020.com#inbound14
analyEcs automaEon coding content digital ads email mobile public relaEons search social tech websource: AlEmeter’s The Converged Media ImperaEve
the new marke;ng mix
@paulroetzer www.pr2020.com#inbound14
@paulroetzer www.pr2020.com#inbound14
generate leads86%
85% convert sales
build brand46%
51% increase loyalty
brand
leads
sales
loyalty
Source: PR 20/20’s 2014 MarkeAng Score Report
high-‐priority goals
@paulroetzer www.pr2020.com
sample KPIs
website traffic social reach subscribers
lead volume lead quality score
lead-‐to-‐sale conversion rates cost of customer acquisi;on (COCA)
customer life;me value (CLV) customer reten;on rates recurring revenue
brand
leads
sales
loyalty
@paulroetzer www.pr2020.com#inbound14
source: Accenture’s Turbulence for the CMO
the markeEng industry is moving too fast to internalize everything
Donovan Neale-‐May, ExecuEve Director, CMO Council
“There’s an underlying level of frustra;on among senior corporate marketers worldwide when it comes to agency contribu;ons to business value creaEon, strategic thinking, and digital markeEng development.”
source: CMO Council (2012)
@paulroetzer www.pr2020.com#inbound14
of senior marketers believe tradi;onal ad agencies are doing a good job of evolving and extending their service capabiliEes in the digital age. !
source: The Chief MarkeAng (CMO) Council report More Gain, Less Strain.
9%@paulroetzer www.pr2020.com#inbound14
where do the other 91% turn for help?
@paulroetzer www.pr2020.com#inbound14
growth is the easy part. retaining it, and making it profitable, are the real challenges for agencies.
@paulroetzer www.pr2020.com#inbound14
a cauEonary tale of churn
Define FoundaEon ProjectsPR 20/20 growth (2009)
15 new campaign clients !
$195,000 in 2009 revenue !
$503,000 in 2010 forecasts
life is good!
0 clients remain
average relaAonship lasted 12 months
49% of marketers report they will consolidate or change agencies over the next 12 months. Another 15% aren’t sure. !source: CMO Council, 2012 study
64%@paulroetzer www.pr2020.com#inbound14
Define FoundaEon Projectschurn factors
financial instability focus on outputs, not outcomes over promise, under deliver siloed services stagnant business model stretched too thin talent turnover unbalanced porqolio weak processes
agency side
@paulroetzer www.pr2020.com#inbound14
Define FoundaEon Projectschurn factors
client side
conservaEve culture/budgets financial instability lack of vision low quality product/service markeEng tech deficiencies personnel weaknesses poor management unrealisEc expectaEons weak foundaEon
@paulroetzer www.pr2020.com#inbound14
work with agency partners that care as much about
performance and success as you do
@paulroetzer www.pr2020.com#inbound14
15 ways to maximize agency profits
Source: HubSpot
1) prove performance
@paulroetzer www.pr2020.com#inbound14
@paulroetzer www.pr2020.com
2) develop scalable processes and services.
3) reduce business development Eme.
(remove despera/on)
4) achieve financial stability.
Define FoundaEon Projects
5) know when to say NO.
commit to clients and prospects who value your people, ;me and energy !
watch for red flags !
trust your ins;nct !
be willing to walk away
6) get paid for planning.
@paulroetzer www.pr2020.com#inbound14
2006
2008
2010
2014
7) establish value-‐based pricing.
@paulroetzer
8) build brand and reputaEon.
image: David Guo
Senior Pro @ $75,000 = $32/hour vs.
Junior Pro @ $45,000 = $19/hour
costs 40% less for junior pro services
9) understand service-‐delivery costs.
@paulroetzer www.pr2020.com
10) arract and nurture entry-‐level talent.
@paulroetzer www.pr2020.com#inbound14
11) move to campaign-‐based contracts.
@paulroetzer www.pr2020.com#inbound14
image: Xurxo Marcnez
12) fill talent, tech and strategy gaps.
@paulroetzer www.pr2020.com#inbound14
(eliminate waste)
13) track ;me and efficiency.
14) focus on reten;on.
@paulroetzer www.pr2020.com#inbound14
Speaking 5%
Publishing 5%
Events 10%
Sofware 10%
Services 70%
15) diversify revenue.
@paulroetzer www.pr2020.com
paul roetzer, @paulroetzer !CEO | PR 20/20 author | The MarkeAng Performance Blueprint (Wiley, 2014) & The MarkeAng Agency Blueprint (Wiley, 2012) creator | MarkeEng Score & MarkeEng Agency Insider
www.pr2020.com