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Digital Marketing Agency Models Don’t Work for Small Business

Posted by Lucy Railton on 11/10/19 6:48 PM

frustrated-group

Nothing stays the same, change is rapid and accelerating.  This is true for marketing as well. There’s a never ending emergence of new tools and widgets to optimize campaigns and conversions and to improve customer experience, new communications channels and social media platforms, new priorities in traditional and digital projects, new risks and new opportunities

So why is it that as the digital marketing landscape continuously shifts for small business traditional digital marketing agency and service models have not?

What hasn’t changed? The way agencies and service-providers work with clients.

There are four common models–each with its own set of issues–that have stubbornly not evolved since the days of Mad Men. 

Common Digital Agency and Service Models


Retainer Model

For an agency, retainers–and the steady stream of revenue they bring in–are the holy grail of income sources. Industry leaders tell agency owners over and over again by that they must sell retainers to their clients. From a client perspective, they represent guaranteed services when they want them. Win-win? Not always. Retainers have downsides for business owners, especially smaller B2B organizations where needs and budgets can often fluctuate.  Not only can they be expensive and inflexible, but retainers often provide one or two very specific services without tackling other marketing requirements that the client may have. And, if the services provided are value-based–but not specific to the actual amount of time it takes to execute–then it’s possible that only one party will come out ahead.

Project-based Model

Despite the push for retainers, agencies report the majority of their revenue is project-based. This works for both agencies and clients when there is a defined requirement. However, as with retainers, this model may not fully meet the needs of a small B2B owner. The strategy is often project specific, rather than being part of a comprehensive marketing plan. In addition, when out-of-scope work is identified, it results in either non billable time for the agency or unexpected costs for the client.

Freelance Model

If neither of these options work for small businesses, owners can just hire freelancers, right? Yes–but the time it takes to find quality freelancers and develop productive relationships is a burden on smaller companies.  Also, many freelancers provide niche services, which means another freelancer with a different skill set may be required. This means the client can spend a significant amount of time just managing many several freelancers; who may end up working in silos and/or not operating collaboratively. The result can be fragmented services.

Outsourcing Model

Organizations can just outsource part if not all of their marketing team. However, these arrangements often come with yearly commitments and high monthly hourly minimums–a steep price to pay for smaller businesses.

These same old models give rise to the same old problems that lead to friction–situations where the agency or client may think they are getting the short end of an ever-shrinking stick.

With process advances on so many fronts, why has the client-agency working relationship refused to adapt?

Blame it on the funnel.Traditional Sales - Marketing Funnel 

Businesses remain focused on the traditional marketing and sales funnel strategy that maps the customer journey from the moment a brand or product attracts their attention to the point of conversion (visitor to lead and lead to customer). However, customers are almost seen as by-product of a funnel instead being recognized for what they truly are—the driving force behind business growth. The marketing and sales funnel strategy has not kept pace with the fact that customer referrals and word-of-mouth have become the largest influences on the purchase process, “funnel vision” keeps organizations from seeking alternatives.22Eighteen-Flywheel

And, there are alternatives. In 2018, HubSpot adopted the flywheel, an energy-efficient, circular process where customers fuel growth. The energy or momentum that the wheel stores is a product of three factors: how fast it spins, the amount of friction it encounters, and its size. Unlike the funnel, where the customer is the outcome of the process, the flywheel has satisfied customers generating referrals—so their momentum is reintroduced into the cycle to keep the wheel and the business in motion. 

Of course, it’s necessary to eliminate the sources of friction–things like rigid processes, incohesive services, or unclear pricing structures–that lead to a slower…and squeakier…flywheel.

If it's important to provide customers with a frictionless experience to keep the flywheel spinning, then why are all the typical marketing services models rife with friction?

Just as with the funnel, agencies don’t always take into account a client’s unique and changing needs. This is especially true for smaller businesses that are more susceptible to shifting market conditions.

So, what should a new, “frictionless model” look like?

It combines all the best elements from retainers, project-based work, freelancing, and outsourcing to form an agile and flexible solution that builds long-term relationships and trust.  

Acting as a mirror to ever-evolving client requirements, this solution offers a wide-range of à la carte services–from marketing strategy development through to project execution–from a single collaborative team that is available when the business owner needs them.

Clients can scale work up and down without consequence. In months where budgets are tight, they can reduce or stop work. And they can just as easily add more hours when deadlines are tight or there’s a special project.

Plus, no contract, annual commitment, or monthly minimums removes risk and buyer’s remorse from the equation. It puts the onus on the agency to provide great work, as well as consultation and strategy development with a measurable ROI. And if they don’t? The client can stop work if at any time they are unsatisfied.

Transparent pricing also serves to lessen friction. Easily accessible reporting shows time tracked to the minute. This means the client knows what to expect at the end of the month. No surprises. They see exactly how much time it takes to execute on projects and that they only pay for work that was done.  

In this model, hourly rates vary based on service complexity, so business owners can outsource administrative and marketing coordinator level work without having to pay high consultant level fees. 

All this…without sacrificing quality. On every project, you get a team of experts work together as a team–not several freelancers who may struggle to collaborate. The solution also provides for regular client communication to determine monthly and longer-term project priorities before work begins.

With all this opportunity, it’s time for agencies and clients to take ahold of the wheel of their marketing model–the flywheel–and make a change that fosters harmonious, trusting, and mutually beneficial working relationships.

Topics: inbound marketing, small business digital marketing