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Agency guide to thriving through coronavirus and a recession
To say that we've entered some fairly turbulent times would be an understatement no matter where in the world you live and work. If it's not already happened both you and your agency's clients are going to feel the pinch. Your primary goal needs to be to lead your team through the uncertainty and provide as much stability and security as possible. You also need to help your clients navigate through the downturn offering them solutions that will give them a competitive advantage and help them grow. And in doing so, you'll help ensure that your services are considered critical to their operations and not added to the chopping block as your clients look to minimize their expenses.
Take note that your clients' knee-jerk response is going to be to cut their marketing budgets. Pragmatically, you can understand the reasons: since there is less money coming in, owners need to trim budgets so that there is less money going out. In fact, we've seen so many agencies do this over the last month.
But why do so many businesses immediately cut marketing budgets first?
Generally speaking, business owners view marketing as secondary to their core offering. For example, if they're in the business of selling cameras, then they're going to pour their resources into their inventory, their employees, paying the lease and keeping the lights on.
Secondly, many business owners also have the idea that the marketing they've been doing for years will sustain them during an economic downturn. They know that people aren't going to forget their business and their brand the second they stop advertising. They know sales aren't going to completely dry up the day they cut their marketing budgets.
To a degree that's true. However, eventually, their sales will drop and their prospects and customers will turn to whoever has developed the top-of-mind awareness in their niche. That means they're going to turn to the business that keeps advertising through a recession. Long term this may take a business from trying to survive to close its doors.
Indeed, research suggests that businesses that cut their advertising budgets during a recession are NOT more profitable. Specifically, the research shows that businesses that cut ad budgets 10% were not any more profitable than those who didn't cut them at all.
Now here's the important part: research further shows that those businesses that cut their budgets hurt themselves over the long term. The reason is that once consumers start spending again, they're going to spend their money with the businesses who kept advertising throughout the downturn. Top of mind awareness is important.
Point is, if your clients cut their marketing budgets now, they're going to hurt their sales in the long term. That's why your agency's services are more important than ever right now. And that's what you need to convey to your prospects and clients.
So, how will your agency survive this recession? Read on…
Six ways to survive and thrive in a recession
We've just established that continued marketing should be an important part of your clients' overall strategy for surviving the recession, but take note that this advice applies to your agency too. Let's now look at six specific ways you and your clients should be using digital marketing during the downturn...
#1. Continue investing in ads
Ad spends are often the first to get cut, but these should be maintained or adjusted but not eliminated. Even if people aren’t buying as much, they ARE still buying. And as mentioned above, consumers are going to buy from those who keep their offers in front of the audience both during the downturn as well as after it’s over. That’s why you’ll want to be sure to main your ad spend, and perhaps even increase it if you’re able to.
Our agency runs paid ads for clients across multiple industries. We had to pause the campaigns for our home remodel client because they could not take on any work during the shutdown and no one wanted contractors coming into their homes. Now that the economy here in the US is opening up we’ve educated our clients on the importance of continuing their paid marketing campaign and they agree. Their campaign goes live next week. Another client of ours is in the non-profit health space and they ramped up their campaign during the lockdown. Each industry will be different, the point is to understand how paid campaigns can help your clients and educate them as to why they shouldn’t stop all advertising because they are trying to save money. Paid campaigns should be one of your agency’s goto solutions to deliver ROI for clients quickly.
#2. Invest in SEO
Investing in search engine optimization is a smart move for most businesses especially local businesses because establishing good rankings now will pay off many times over when the economy opens up and consumers start spending again. Consumers’ purchasing habits were already trending to online first search queries for a brand, product, and services. During COVID-19 this is only going to skyrocket as consumers practice social distancing and look for solutions online vs. just walking into a business.
This is especially true if your competitors or your client’s client’s competitors aren’t spending as much time optimizing their sites for search engines, as then it will make it easier for you to achieve and maintain high rankings for targeted keywords for your agency and your client’s.
Sure SEO takes time but like all things, there are low hanging opportunities you can leverage in days where you will probably see results in weeks not months. 3 things you could focus on this week could be:
- Building relevant local citations are most commonly known as a mention of a business in a direct listing site. Check out WhiteSpark to learn more about how to easily find and create local citations.
- Run an on-page SEO audit for pages that Google Search Console shows are ranking on page 1 and 2 for keywords that drive leads to your website or your clients.
- Write content that helps serve the intent of leads and prospects. We will dive deeper into this in the next point.
#3. Create relevant content
It may feel like coronavirus and the recession have hit the brakes on life as we know it. However, people are still searching for information about how to grow their businesses, which why it’s important that you develop a content strategy during this time.
Note: the key is to develop content that connects the conversations the audience is already having in their head in relation to a problem or desired outcome with your brand. Whenever applicable, tie in coronavirus and the recession into the content you’re creating for clients and for yourself.
A good example of this is the advertising you’re seeing on TV right now. Pizza delivery places aren’t touting fast delivery, because that’s not what is most important to consumers now. Instead, they’re talking about cooking pizzas at 500 degrees (kills germs), how the pizza is never touched once it comes out of the oven, and how contactless delivery options are available.
Likewise, your agency content shouldn’t be talking about rapid business growth, because that’s not happening for a lot of business owners. Instead create content for business owners that addresses how to survive during a recession. Most agencies who have offices have had a remote — work from home solution in place for years others have been working out of their home since inception. Let your prospects and clients know that your business processes support remote work and that you’ve helped many businesses grow without having to meet in person.
When working with your client’s make sure to find ways to put the current situation into context for their ideal customers. For example for our home remodeling client, that means not just writing content about how they are an award-wining remodel company but discussing how they’ve always been a safety-first company and communicate what they are doing to address the health concerns a homeowner may have with contractors coming into their homes to work on their project.
#5. Get perspective, show empathy, add value
While your agency may be feeling the pinch right now, please do keep in mind that your clients are feeling the same way. If you start looking at your clients as ATMs and sales quotas, you’re going to lose the all-important human connection with your audiences, which will in turn affect sales. Be sure to connect on a “real” level with your contacts through your newsletters, blog posts, newsletters, and other communications. Send personalized emails to your clients, pick up the phone, and see how they are doing and what you can do to help. Good business revolves around building good relationships.
We believe adding value as being one of the best ways to enhance a client relationship. Before you can add value, it helps if you know what your client’s biggest problems or desired outcomes are and then aligning your expertise and services to help them.
We emailed all of our clients and called select oned letting them know that we were in it together and that we were there to help and support them at the start of the COVID-19 crisis. We asked them what were some of the current business challenges they were facing COVID-19 or not and listened.
We had several responses that led to wins big and small, we also had a lot of our clients say thank you but not want to do anything since their priority was ensuring business operations and payroll. We understood where they were coming from. Sometimes just letting your clients know you are there for them, makes a world of difference. Other times it leads to wins like these:
- Setup Training & Strategy Calls: A few clients requested website training and strategy calls for us to show them how to get better results from their website and give them ideas on how to grow their business.
- Increased Retainer Hours and Client Retention: We proactively set up calls with clients on larger retainers to discuss how to better use their retainer hours as their priorities changed. We had our doubts about this approach but decided to do it because we position ourselves as partners who solve problems not just do commodity work. This has turned out to be a blessing where we’ve only increased retainer hours not decreased them over the past 2 months.
- New Redesign Project: We closed a 10K+ redesign project when we communicated to a client that they didn’t have to wait for business as normal to work on their site. We reminded them that their team would have time to focus on the project and that the new site could be live before the lockdown ended.
- Win-Win 15K+ Deal: We found out one of our clients was spending a lot of time working on manual reports and paying staff to do things we could automate. We closed a 15k+ project that we completed in a few weeks and are now saving our client dozens of hours each month and frustration.
Ideally, you are looking for a win-win situation but that may not always be the case. Show empathy and focus on how you can add value to your clients and you will come out ahead in the long run. One of our agency’s core value stems from this famous quote by Zig Ziglar — You can have everything in life you want if you will just help other people get what they want.
#6. Growth audits that deliver tremendous value and results
Now is also a great time for both you and your clients to audit your websites. Audits can help you quickly identify weaknesses and opportunities related to design, SEO, conversion optimization, page performance, security, and other factors that help a business thrive online.
We know that the majority of our customer base and our ideal customers are looking for ways to grow their business online. So our agency routinely offers a growth audit to our clients and a value add to all of our prospects in our sales process. The way we position it in our emails, website, and other collateral is:
Get your free Digital Growth Audit and learn how to generate more traffic, get more customers, and maximize your digital marketing ROI.
We’ve found that these growth audits are very appealing to both prospects and customers when we tell them that our team of experts will analyze their site and prepare a personalized report to show them exactly how to turn their website into a fine-tuned sales and marketing resource, to grow their business, and maximize their digital marketing ROI.
TIP: Our agency is able to generate reports that would have taken us hours to do in minutes by using My Web Audit. It makes it fast and easy to run a variety of audits for your prospects and clients. You can view a list of free audit templates your agency can use here.
So, you can see the different ways that your agency can help navigate your prospects and clients as well as your own agency through this downturn. Now let’s look at specific strategies your agency can use to save money and stay profitable…
How web agencies can stay profitable during a downturn
One of the keys to profits is to make sure your clients know that you’re offering them essential services that will help keep them afloat or even grow during the downturn. Check out these ideas:
Seek out recession-proof clients
Plenty of your clients may be feeling the pinch of this coronavirus crisis and economic downturn, and they may lower their spending with you no matter what sort of data you provide or emotional appeals you make. You can protect your business by seeking out recession-proof clients.
This is not the first economic downturn so we can learn from the past. Data shows that not all industries nose dive in a recession. If you target the top 10-20% of most industries you will probably be fine. For those of you who don’t here are a few industries you should look for clients in. Businesses that serve these industries have a track record of performing better than most in recessions:
- Health and Senior Service
- Financial Advisors & Tax Consultants
- Food and Restaurants
- Retail Consignment
- Pest Control
- Freight and Logistics
- Repair and Maintenance
- Home Staging Experts
- Commercial Cleaning Services
- Transporation, Moving and Logistics
Provide market research and solutions
Depending on how long your clients have been in business, they may be new to working through a recession. Even if they were up and running during the last downturn in 2009, they may not have weathered it very well. You can offer market research to help them pinpoint the best opportunities for their particular industry in this current economy. This is exceptionally beneficial to agencies who have niched down and truly understand what is needed by and industry and how to help businesses in that industry thrive.
We can do lead generation for almost any type of business but we focus on helping companies in industries we’ve had tremendous success in. I’m constantly surprised by how many agencies don’t do this.
It’s so much easier to sign a prospect when you can show them that you’ve solved the problem they have for a company similar to theirs.
Identify your clients' recession strategies
In order to create marketing that works right now, you need to know how your clients behave during a downturn. That’s why your first step is to identify their recession strategies.
Broadly speaking, your clients will either be spenders or savers. Some of the savers will hit the brakes and completely shut off all advertising. Others will cut back, preferring to focus on activities that offer higher ROI. Meanwhile, spenders will keep on spending.
When dealing with both groups, the key is to engage them on an emotional level and then justify with logic.
For spenders, you can reassure them that they’re making the right decision by choosing to continue to invest in their business.
For savers, you can point them towards the services they need the most, as well as those that provide a good ROI.
For example, if a company is getting a lot of traffic, then you don’t need to sell them SEO services. Instead, provide conversion optimization services to help them make the most of the traffic they’re already getting.
One important note here: people change over time. The way people behaved during the 2008-2009 downturn may not necessarily be the same way they’re going to behave in this downturn. That’s why you need to do a deep dive to understand what your clients are thinking right now and what sort of services they want. And likewise, when they do hire you, then you need to do a deep dive into their market as well so you can tailor a marketing strategy for them that gets results.
Here’s an image of consumer behavior from a report in a Harvard Business Review article.
Cut an unnecessary costs
Your clients shouldn’t be the only ones looking to cut costs, chances are you’re likely doing the same thing. As you know, you should keep up your marketing spend especially if it’s the primary source of leads for your business. This will help you get you through the downturn and beyond.
That being said minimizing expenses especially unnecessary expenses it critical for your business. Start with looking at your credit card and bank statements for subscriptions to software and services you don’t actively use or that don’t deliver much ROI. Don’t make the mistake of canceling an app subscription that’s $19.99 to save money when that app saves you an hour or two of time a month. Although every dollar counts making cuts to save money that lead to you spending more time is often going to be counter-productive if your hourly rate is $100 for example. Also consider the impact a cut may have on the quality of experience you are offering your clients.
Unfortunately, if things get hard you may need to let go of some of your staff. We recommend speaking to your team and being transparent about temporarily reducing staff salary or hours as an effort to avoid laying off members of your team. If you have to let go of a team member, analyze their talent and fit for your agency. It will not be easy to replace a talented team member who is a great fit for your agency down the road so try to retain them and hire for roles that a freelancer can easily cover..
Diversify your client base
I’m sure you’ve heard someone say “Don’t Put All Your Eggs in One Basket“. The same principle applied to your agency. If you’re getting 20% or more of your revenue from one client, then you’re setting yourself up for problems in the future. If the client closes up shop or decides to work with a different agency, you’re going to be in a bad position. That’s why you’ll want to proactively diversify your client base as soon as possible, including finding new clients in recession-proof businesses.
Diversify lead-generation strategies
Leads are like oxygen for your web agency, and that’s true more than ever right now. As mentioned before, don’t cut your marketing budget, as you’ll gain both a short term and long-term competitive advantage if you continue to advertise.
However, here’s another warning to not pull all your marketing eggs in one basket. If you’re getting a significant portion of your leads from one channel or one other source, then your agency is going to falter if that source dries up. Protect your business by diversifying your lead-generation strategies and sources.
Our agency’s top sources for lead generation that help us generate dozens of leads each month are:
- Search Engine Optimization which we have been doing for years.
- Referrals from complementary business partners like IT consultants
- White Label Agency partners who leverage our services to grow their agency.
Our lead generation strategies for our SaaS are different because we need them to be scalable. These help us generate 100’s of leads each month
- Content Marketing + paid acquisition using Facebook ads
- Affiliate Marketing + product partnerships
- LIve & on-demand webinars
Focus on staple services
When your clients are looking at what services to cut out of their budget, they’re going to eliminate the “nice to have, but not necessary” services such as content writing and try to do it themselves. If the majority of your services fall into the “nice to have” services category, your agency is going to suffer when businesses don’t perceive your services to be mission-critical.
Here’s what to do instead: focus on staple services that solve expensive problems or your client’s desired outcomes. These are the “must-have” services that clients won’t cut out of their marketing budgets, such as lead generation and ongoing optimization services to help them convert more website visitors into leads and lower their customer acquisition costs. These services help their business bottom line and will always prove essential to their ongoing operations. These also happen to be the services you can easily bill based on value delivered vs. time and effort.
Plan ahead and saving for a rainy day
You should ideally have at least six months’ worth of cash reserves set aside, and ideally you should have as much as twelve months saved away for rainy days. This will help you weather the downturn, hold your marketing spends steady, and even hang onto your talent for many months.
Depending on where you are in your business you may think this to be impossible You’ve got to start somewhere, so if you aren’t saving start budgeting accordingly so you can start putting away a percentage of your net profits towards building a cash reserve.
Now is also the time to create a worst-case plan for your business. What will you do if your clients stop working with you? What will happen if you don’t have enough cash reserves to stay afloat?
You’ll want to consider both how you’ll bring in more revenue, as well as what expenses you’ll cut first (and second, and third… and so on) in the worst-case scenario.
None of this is fun to think about, but it’s better to do it now while you’re thinking clearly, rather than later when you’re in panic mode.
Rethink invoicing and credit
If you’re like a lot of agency owners, you may work on a 30-day term with clients, where you submit an invoice and then give clients 30 days to pay you. However, this typical way of doing business is dangerous during a recession, as clients may start deferring payments for two or three months. Even worse, some of your clients may go out of business.
Over the years we’ve transitioned into plans where the client pays for our retainer services at the start of the month. For ad-hoc services we try to get as many clients to add a credit card on file that we can bill immediately at the end of the month.
The second step is to assess your invoicing system and fix any weaknesses. Be sure that your system enables you to quickly identify clients who are paying slowly. Any clients that send in checks or pay using a bank transfer are closely monitored to ensure we continually follow up with them if an invoice is past due. Here’s an example of an email we would send out:
I hope this email finds you doing well. I think we all are stir crazy about not being able to do the things we took for granted over a month ago! Hopeful we see a return to more of that next month.
The routine of running my business has given me a lot of strength, as I hope it’s doing for you.
And that brings me to this—the reason I’m contacting you.
I’ll be honest, there’s no “simple” way to send an email like this.
But the fact is that our invoice HAWINV05214 with a total of $3599 that we sent on April 1st is past due.
I hate to remind you of it during such uncertain times, but I’d greatly appreciate it if you could review the invoice and the services rendered.
Please let me know if you have questions
We follow up every other week via email or a call if the invoice is still past due.
Review your marketing budget
As you know by now, the key is to not arbitrarily cut your marketing budget. Maintaining your marketing campaign will help you beat the competitors some of which who will probably cut their budgets. Now having said that, you need to take a good look at your budget. You may need to reallocate your funds to accomplish two things:
- Diversify your marketing strategies/sources.
- Focus on the activities that give your agency the best ROI.
As any good marketer should, be sure to measure the key performance indicators from your campaigns and continue to invest in the campaigns that give you the best ROI. So for example, you may decide to eliminate your LinkedIn ads, and instead reallocate those funds towards your Google pay per click campaign that has a higher ROI.
Focus on existing clients
As mentioned earlier, you need to diversify your client base. However, this doesn’t mean you should neglect your existing customers. On the contrary, you want to also put a lot of focus on your existing clients, as this both saves money and grows revenue.
Simple: it’s cheaper and easier to persuade an existing client to spend more money with you, as opposed to finding new leads and converting them into paying clients.
During an economic downturn, you can help your existing clients using the strategies outlined previously (such as conversion rate optimization or lead-generation services). Be sure to go the extra mile to keep them happy, and provide them with key metrics that matter to them to show them why continuing to invest in your services is a smart business move for them right now.
Even if some of your clients aren’t spending money with your right now, you want to work on retention strategies. Nurture the relationship now, and they’ll spend money with you again once the downturn is over.
Improve your conversions
Finally, you’ll want to look at your website, ad campaigns and landing pages to see where you can improve them. Test and track everything meticulously, so that you can increase your ROI and know the best places to put your ad dollars. Improving conversions not only helps you convert more visitors into customers, when done right it will also increase your customer acquisition cost so you get more customers while spending less on your marketing campaigns.
I’m surprised as to how many agencies don’t invest in optimizing their own brand assets from their websites to social media profiles. They lack what it takes to build trust, establish their expertise, and show prospects how they’ve delivered results time and time again for businesses just like them. Solve this one key point and you’re going to have more business than you’ve ever had before.
Consumers and business owners are taking a financial hit right now as the coronavirus and resulting economic downturn affects more everyone. However, your agency can weather this storm and come out the other side stronger than ever if you apply the tips you just read about – and you can help your clients do the same thing, which will make you indispensable.
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