Growing an Agency During Inflation
[0:11] Introduction to Performance Delivered: Insider Secrets for Digital Marketing Success podcast
[1:56] Areas of an agency mostly affected by inflation
[4:13] Keeping the office culture alive in the age of working from home
[8:06] How to approach clients who fear recession
[12:23] Finding the right talents when salaries are high
[18:21] Key things an agency should do to thrive despite the inflation
[20:01] Navigating your financials by rightsizing your business
[24:22] How to be flexible about client’s changing decisions on negotiations
[28:22] Wrap-up
In this episode of Performance Delivered: Insider Secrets for Digital Marketing Success podcast hosted by Steffen Horst, Brian Davidson is invited to talk about growing an agency during inflation.
Inflation is perhaps the most familiar word in the subject of economics, but there is no better term to describe our economic situation these days – the consistent rise in price levels of day-to-day commodities and services. Factors like the COVID-19 pandemic contribute to this. It definitely brings many repercussions and can negatively impact many things. In such cases like with Matchnode as a digital marketing agency, main aspects like their clients and the costs, are greatly affected because of inflation.
Inflation affects every type of businesses. In the digital marketing world, clients may decide to cut back their marketing investment, thinking of reducing costs. Agencies like Matchnode exist to help these businesses drive profit through paid social campaigns, but it is inevitable sometimes that a client decides to cut marketing cost due to the present economic climate. In this case, proving to clients that ROI is still there for them and that it is still driving value is a very essential task to do. Having honest conversation with your client about what you can initially deliver to them as an agency is the way to make your clients understand your point of view and make them realize how significant their marketing investment has been to their business.
Mainly because of the pandemic, working remotely has become the new normal. Rare are the days when every employee is required to report in the office. For the Matchnode team, all systems they use – Asana, Google Meet, Slack, etc. – became very effective to somehow coordinate work processes remotely just like they did when working in office. They came up with cost-saving approaches like, instead of spending the money on having an office space, they save all these resources and invest it on a team get-together every once in a quarter in different locations to keep the team culture high.
When salaries constantly go up, how does Matchnode find the right talent to support the growth of their agency? Brian emphasized that they undergo an extremely methodological hiring process to make sure that a right person is picked – someone who has passion for Matchnode’s business niche and has the desire to grow.
Discussing the financial aspect and having control over your cost, Brian mentioned that the need to right-size the business in terms of salary, benefits, etc. to optimize profit is the key. Steffen added that having a firm understanding of your financials from an investing perspective is important (i.e., where are you spending your money? Is it direct labor, office tools/systems, etc.? Are you utilizing it financially in an effective and efficient manner?) Staying on top of your finances is vital and beneficial in an economic condition like today.
With these things in mind, Steffen asked Brian what he thinks are the key things that an agency should do to ensure that in this present economic situation, they can continue to grow. Brian answered with two points in mind: (1) To think very critically and strategically, be it changing your service offering or adding some services; and (2) To understand that your client’s strategies can be shifting and that you should be communicating clearly with them. Take a time to step back and think about what has been changing.
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