Written By Bethan Vincent
*Well, mostly everything. I stand by the statement generic marketing advice is often meaningless and great marketing is heavily context dependent. For every point in this piece there will be a business that bucks the trend. The important thing is that you understand and work with the specific nuances of YOUR market, YOUR audience and YOUR objectives.
The first rule of agency/consultancy marketing is that there are no quick shortcuts. I’ve spent the last two years building a marketing strategy consultancy, before that I spent 2.5 years as the marketing director of a software consultancy. In between I’ve helped numerous agency clients develop differentiated propositions and define compelling positioning in crowded categories.
The overwhelming lesson I’ve learned is that developing a successful agency/consultancy marketing engine is one of the hardest jobs out there and it requires a monumental amount of focus, nuance and, dare I say it, creativity.
On a fundamental level, agencies and consultancies sell the output of human brains – a product which is hard to meaningfully differentiate. After all, you can’t exactly add new features to a 2 million-year-old piece of kit (this is one of the many reasons you see agencies branch out into building proprietary tools and software).
This lack of functional difference leads many agencies to rest their messaging around the pillars of “we think differently” or “we’re creative”. This is lazy at best and frankly, some level of creativity is the bare minimum I’d expect from an agency partner. It’s hardly something that sets you apart from every other outfit.
Another distinctly agency/consultancy-focused challenge is the low barriers to market entry and lack of regulation. Anyone with a laptop can set up a TikTok account and call themselves a marketing expert.
There are apparently 17,015 Advertising Agencies businesses in the UK as of 2023, an increase of 0.6% from 2022. This makes the agency landscape incredibly saturated and exposed to commoditisation, especially at the lower end of the market where content agencies are increasingly playing arbitrage with ChatGPT’s output.
Linked to this very point is the third challenge – trust. Any prospect who has engaged agencies before will have likely been let down at some point by a poor partner who has either underdelivered, not delivered at all, or at the worst end, delivered something that’s actively damaged the business. This only serves to create another layer of complexity, as agencies need to actively work to combat the poor reputation of their entire category.
In the face of a sea of sameness, saturation and low levels of trust, how should an agency or consultancy approach their marketing?
The curse of shallow and wide
“We target challenger brands” – this isn’t a target market. This is an aspirational piece of fiction focused on a business mindset. Often this type of messaging is a proxy for “we target growth-focussed businesses’ – my riposte would be that surely, most if not all, businesses are growth-focused. Therefore you’re basically indicating your total addressable market is every business that you can service geographically.
Most agencies and consultancies go so broad with their target audience that it’s frankly meaningless. Unless your marketing budget runs into billions of dollars, you won’t be able to generate one touchpoint with the entirety of that surface area, let alone cultivate meaningful relationships over time.
Another example of this would be “we exist to help b2b SaaS companies” – again this is a huge category. There’s a significant difference between working on Atlassian’s global account and working with a niche SaaS start-up. On a fundamental level, you’re extremely unlikely to be able to service both profitably, let alone develop a compelling proposition that connects with each of them.
So what does good market segmentation look like? Remember my warning above that great marketing is contextual. I’m afraid the answer is that “it depends”.
There are however a few meaningful lenses we can view market segmentation through:
- Firmographic – categorising based on specific business characteristics such as industry, company size, location, tenure and revenue.
- Needs (jobs to be done) – focuses on the jobs or tasks that customers are trying to accomplish, i.e. successfully launch a new product to market
- Behavioural – this is based on buyer behavior and actions, such as purchasing habits (i.e. they use tenders and RFPs) and engagement (i.e. desire to leverage certain technologies such as AI)
- Cultural – for example, sustainable brands may wish to work with agencies that share their values.
To better understand which segmentation lenses work best for your business, you can build a picture using your own historic accounts by looking at previous client data to analyse revenue, churn rate and average account value.
By categorising your accounts based on these factors, you can identify patterns and commonalities among your best-performing clients, making it easier to recognise which characteristics contribute to their success. It’s highly likely that a few similar account types account for the bulk of your revenue and the bulk of your good clients.
In my experience the “right” type of segmentation usually involves layering a couple of market segmentation methodologies over each other. Relying on one segmentation lens can lead to your segmentation being too narrowly defined or superficial, equally as meaningless as too broad a view.
For example, we worked with a software consultancy client whose sweet spot fell in what we deemed the “heritage transformation” segment. These consisted of UK enterprise companies who built software in the 2000s and were now crumbling under the weight of technical debt and out of date systems. They needed to modernise their application stack and were looking to re-develop around microservices. They had a distinct preference for an on-shore partner due to their desire for quality, security standards and ease of communication.
I hope it’s easy to see how this clear definition of the target market allowed us to be extremely precise in our targeting and messaging. We knew instantly if a prospect was going to be a good fit.
The dangers of industry segmentation
You’ll notice in the example above we didn’t go down the industry segmentation route – i.e. we’re the software consultancy for financial services. While industry segmentation can be an effective way to target specific markets, it is important to recognise the potential dangers associated with this approach.
Industry Overlap: Relying solely on industry segmentation can lead to overlooking potential clients with similar needs that span across multiple industries (see the needs based segmentation example above). By focusing narrowly on a specific industry, your agency or consultancy might miss out on opportunities to work with clients in other sectors that are a high fit for your expertise and approach.
Overgeneralisation: Industry segmentation may result in overgeneralising the needs of clients within a particular industry. Just like the famous B2C example of Prince Charles and Ozzy Osbourne sharing the same demographic characteristics but little else, not all B2B companies in the same industry are cut from the same cloth. For example, Rolls Royce and Rivian are both car manufacturers. I bet they don’t have anywhere near the same agency needs or preferences.
Limited Differentiation: This is really the biggest material risk. By targeting clients based on industry alone, your agency or consultancy might struggle to differentiate itself from competitors who also focus on the same industry segment. Anyone can say they are the “X agency for X industry” – it’s frankly done to death and extremely easy to replicate.
Concentrated Exposure Risk: Relying heavily on industry segmentation can lead to an over-concentration of clients within a single industry. This exposes your agency or consultancy to potential risks, such as economic downturns or regulatory changes that might disproportionately affect that industry. Remember travel in the pandemic? Eggs in multiple baskets is a long term risk mitigation strategy that is worth pursuing.
Have you noticed most agencies look and sound the same? From the “our amazing team” page to the “we are innovative” messaging, everyone converges around the same me-too proposition.
In his recent post on what to do when demand dries up, our very own Jon Paget shares the difference between differentiation and distinctiveness
“Being different means at least one aspect of what you do is something others don’t or can’t offer. Being distinctive is standing out from the crowd and being recalled by your target market at a moment of need”
The ultimate goal is to differentiate yourself from the competition, but if you can’t do that, you at least need to be distinctive (“we are creative” fails on both counts!).
So how can agencies differentiate themselves? This looks like the cultivation of unique expertise or team skills, the development of proprietary methodologies or technology, or the development of a new service offering. If I’m honest, most agencies and consultancies will really struggle with meaningful differentiation because it takes time, money and effort. Though it is worth it if you can find that wedge that sets you apart.
If it is difficult to differentiate based on unique offerings or expertise, it’s essential to focus on being distinctive in your approach. This involves creating a memorable brand identity that positions your agency or consultancy as a top-of-mind choice within your category. Being memorable is about standing apart from the pack and having a distinct voice on and within your market. What’s your unique point of view? What are you saying that’s worth listening to? What are you doing to build and engage an audience for the long term?
As I’ve said, an agency’s value is ultimately the output of human brains, so how are you tangibly bringing this to life for prospective clients – what, exactly, are they buying into?
You can’t win with just case studies and creds decks
You’re not going to fix your new business problem with more sales enablement assets. Sorry.
Case studies and creds decks serve a purpose mainly towards the bottom stages of the marketing funnel, where they help demonstrate expertise, showcase past success and provide concrete evidence of the value your agency or consultancy can offer. However they unlikely to be effective in building brand awareness or capturing the attention of a wider audience. Realistically, are you going to download a case study from a LinkedIn ad from an agency you haven’t heard of? (Remember my caveat that there are exceptions – this can work if you are targeting the case study brand’s direct competitors, but that level of granularity will be hard to achieve through targeted advertising).
Moreover, case studies and creds decks often suffer from a lack of differentiation and can be perceived as dull or repetitive by buyers who have been promised the earth before.
Instead of relying solely on case studies and creds decks, agencies and consultancies should invest in a diverse range of marketing strategies to create a comprehensive and effective full-funnel approach.
A crucial aspect of growing your business is building relationships with the right people who may not currently be in the market for your services. By cultivating these connections, you can position your agency or consultancy as a familiar and trusted partner, ensuring that when these individuals do eventually enter the market, your brand will be top-of-mind.
This proactive approach to relationship-building can be achieved through networking, strategic partnerships, hosting or participating in industry events, and consistently sharing valuable content and insights that resonate with your target audience. The magic is finding the combination that works best for your positioning, target audience and available resources (that’s where our go-to-market strategy support comes in).
(It’s also worth thinking about the fact that sales enablement assets can sometimes pique the interest of direct competitors who are looking for your ideas and client list).
Your audience has choice paralysis
I conducted a piece of research a few years ago for an agency who was looking to find out more about the purchase criteria of their target customers. One quote from a CEO has always stuck with me:
“I just don’t know how to choose. Everyone promises the same thing, puts me through the same sales process and expects me to understand the same opaque acronyms. I don’t even know how to separate the good from the bad anymore. So I stick with in-house people – at least I have more control over them.”
It’s funny, people often think their biggest competitor is the agency around the corner, but so often it’s doing nothing. Complacency. Humans are risk averse – we have a preference for a sure outcome over a gamble with higher or equal expected value.
So what does this mean for agencies and consultancies? Again it comes back to being clearly different. To overcome clients’ hesitation and stand out we must focus on clear differentiation and effective communication of their unique value proposition. This involves simplifying your messaging, avoiding jargon and making it easy, painfully easy, for clients to understand what sets your agency apart.
This messaging also has to be tested out in the wild with real prospects to ensure it actually resonates. A significant number of agencies tend to pursue their marketing efforts without collaborating or seeking external input. This myopia is another reason why agency messaging tends to converge on the same old tropes.
So be transparent about your processes and expertise, showcase how you can deliver tangible results and exceptional service. Don’t just tell, truly show your value. (Yes this is where case studies do come in handy). It also comes down to how you can deliver risk mitigation for the client, whether that’s break clauses or the promise of a glowing testimonial/case study based on performance benchmarks being met. Clients want you to have skin in the game.
Play to win
As I said at the start, there’s no one-size-fits-all approach to agency and consultancy marketing, but by understanding the specific nuances of your market, audience and objectives, you can tailor your strategy to better resonate and deliver results.
Embrace differentiation, distinctiveness and build relationships with audiences before they are ready to buy. Remember, the path to agency growth is paved with a continuous reinforcement of your stand-out proposition.
Marketing, after all, is an infinite game with ever-changing rules.
If you’re ready to take your agency to the next level, check out our recorded webinar on “How agencies should approach growth in 2023.”
With guest speakers from Milestone Advisory, we dive deeper into actionable strategies and share valuable insights to help you navigate the challenges ahead.
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