As an agency, your business grows when one of a few things happens:
- You get more leads and close more of them
- You retain clients for a longer period of time
- You trim back expenses
Let’s be honest first, getting more leads and closing more of them is really hard. We all wish there were a magic button labeled ‘New Leads,’ but if you’ve been trying to increase leads to your site, you know it’s just a lot of hard work and trial and error.
I always like to say that if you don’t have any leads, then you need some leads. But if you have leads, then the answer to your growth problems probably isn’t “not enough leads.”
I’m going to show you why client expansion is an agency’s highest leverage and how you can make it work for your agency.
If we can solve your expansion problem, then we can solve your leads problem because you’ll have more margin in your business and therefore be able to invest in the right team and additional lead growth.
My promise to you is that after reading this post, you’ll understand three things:
- What client expansion is and why it’s so important to your agency
- How to structure your contracts, so you build in upsell opportunities
- How to not scare off prospects by upselling them too early.
Let’s get into it.
- Client expansion is the system you build for taking an existing client from one level of service to another level of service, which also means they’re paying you more and getting better results. This is important because it is always easier to get someone already paying you to pay you more and because your acquisition costs on this additional revenue are essentially zero. If you’re doing a good job and show them additional opportunities for growth (for an additional investment), they are much more likely to work with you as opposed to finding someone new. Hiring is difficult, and they will welcome anything you can do to save them from going through that pain again.
- The best way to expand client accounts is to build in points at which you can upsell them naturally during the contract. I recommend that agencies follow a client management sequence of weekly check-ins, monthly reporting, and quarterly account reviews where more senior members of the delivery teams are present. This cadence is loosely based on the Entrepreneurial Operating System, or EOS, as found in the book Traction by Gino Wickman. By building in a business review every 3 months, you’re able to talk with them at a strategic level and use your knowledge of their business and their metrics to talk about new areas where they can see results too. Just make sure you come armed with data, not just an approach of “we can do more things for you too.” Challenge yourself to make the business case.
- Finally, it is important to not scare away prospects with upsells too soon. Note that I say prospects, not clients. Prospects have not signed with you yet, whereas clients are active and paying you for your services. It’s semantics, but it matters because I see agencies lose deals all the time because they try to upsell in the proposal process. I firmly believe that you should sell someone what they want and need. Get your foot in the door first, prove your value and results on that channel, then look to expand the project later once you’ve established trust and metrics moving in the right direction.
Look, there are so many companies out on the internet who are trying to sell you on the idea of “more leads.” I should know, as my company is a lead business. But at the end of the day, you will just end up wasting a lot of time and money if you can’t close and then retain and grow those contracts.
To review quickly what we’ve covered, here’s why client expansion is an agency’s highest leverage and how to do it.
- It’s significantly cheaper to sell to an existing client instead of a new client. Thus, it probably makes more sense for you to get your existing clients to pay you more rather than new clients to pay you something.
- Build in quarterly business reviews where you have senior people in the room and talk metrics and growth. Use this as an opportunity to talk about additional opportunities for more growth with your company. Make sure you’re talking metrics and telling stories.
- Don’t scare away prospects from becoming clients by trying to upsell them before they’re sold! Sell them what they want and need, then upsell them later once you have data and can speak to business impact.