12 mistakes that cost marketing agencies money

If you aren’t paying close attention to your finances and the way your agency is operating, it is easy to be leaving money on the table. We have reached out to a panel of digital marketing experts to weigh in on mistakes that marketing agencies may be making that could be costing them money. 

  1. Overpriced 3rd party link building sites

Ron Evan Del Rosario of Thrive Agency advises “Be wary of using third-party sites or services, especially for link building. Usually, they mark up the prices – say it’s only $40 for a guest post, they will charge you hundreds of dollars for it! We figured that we could directly send outreach emails to these websites for link building and get the original prices, rather than getting it from link vendors. This tactic saved us lots of money!”

  1. An unprofitable pricing structure

David Toby of Pathfinder Alliance says “Having a pricing structure that isn’t profitable is a huge problem, especially for agencies pivoting towards paid search and social from another field. Website development and SEO campaigns are time-intensive. In these niches, billable hours or a flat fee make a lot of sense.

For PPC, not so much.

In fact, over the long-haul, you can end up leaving a ton of cheddar on the table if you charge by the hour for Google Ads, Facebook, and Bing account management. The work is significantly frontloaded, and too much tinkering—trying to make a living when you’re paid by the hour—can even tank performance, especially when it comes to paid search. You might also charge using a results-based model, which has the potential to pay dividends or, you know, zilch. Instead of trading your workdays for dollars or assuming unreasonable risk, you should consider charging your clients a percentage of their ad spend.”

  1. Not understanding your client’s target market

Alistair Dodds of EIC Marketing advises “One of the biggest mistakes that I see agencies making is not understanding the target audience of their client fully. There’s definitely value in offering services that you know you can do well, but each client, and their particular audiences, have different needs, wants, and motivations. And to truly be successful, you need to know what these are and not just make presumptions. Testing, analyzing, and adapting a campaign are keys to success.”

  1. Not aligning your client’s marketing goals with their business goals

Laura Blackwell of Hedgehog Digital says “When marketing doesn’t work, the mistake often needs rectifying at a literal additional expense, or worse: that of losing the account. Usually, chances are this is the result of not aligning the business goals with the marketing goals. What sort of outcome should you be looking for when setting marketing goals? The first step is to talk in detail with the client. Yes, they may want to do digital marketing, but how much of an understanding do they initially have? Again, what is their ultimate business objective? It could be to raise awareness, or to sell a product or service. So the marketing strategy should be created with this ultimate goal in mind.”

  1. Not offering subscription based services

Lisa Carter of Drinkwater Marketing says “I feel the number #1 mistake digital agencies make is not creating business models with subscription based services. By not doing this, there is money being left on the table. When we initially created the business, it was project based. We eventually created programs and plans. In the future, we will always initiate services that require subscription.”

  1. Unclear communication

Erin Thomas of Erin Thomas Communications advises “When clients know clearly and exactly who you are, what you offer, how you do it, and the results they can expect, it eliminates the potential for disappointment, which can be very costly.

To avoid this from happening, agencies- and really entrepreneurs in general- should show up authentically, confidently and unapologetically as themselves and trust that it will attract the right clients and naturally push away the wrong ones, setting everyone up for success in the long run.

When we try to fit a client’s mold or preconception- when we try to work in ways that aren’t who we are or what we’re best at- we end up with unnecessarily stressful- and costly- mistakes along the way.”

  1. Not training staff properly

Digital Marketer, Kevin Farrugia shares “The vast majority of marketing agencies are trying to do something they don’t have the required skills for. They’re stretched in too many directions when their company is profitable because management has hired a lot of people when revenue streams increased (the quickest, most reliable way to scale up), but then it’s not uncommon for revenues to decline too quickly and they all wind up getting laid off. The problem isn’t that there aren’t enough qualified applicants, it’s just that employers need someone who can justify why this task needs doing and communicate an end-to-end plan. Even if the skillsets blend well on paper, like business analyst and project manager and sales engineer, without proper training it doesn’t really work out as expected.”

  1. Trying to offer too many services

Dan Cassidy of Brandhopper Digital says “Whether you’re a marketing agency, e-commerce brand, or local retailer, it’s critical that you solve a very specific problem for a very specific person, and too often we see businesses trying to be everything to everyone. Instead of trying to be “full service” we recommend choosing a niche and serving that niche better than anyone else in the market. Agencies who do that tend to make more money and get better results for their clients, which allows them to have a more sustainable business.”

Behdad Jamshidi of CJam Marketing advises “The one mistake that marketing companies make is around trying to do things that are outside their core set of competency. Usually, when a customer want more than what they can offer, they will take it on and hire someone to fulfill the requirement. Which is an added expense and over time the agency keeps needing to find more and more customers to try and stay afloat.”

  1. Not measuring KPI’s

Krisheil Anoche of Reach Digital advises “Not measuring the success of strategies through KPIs is one of the costly mistakes that many marketing agencies make because without evaluating the success a strategy being implemented, agencies can spend vast amounts of money on tools and other marketing resources that won’t eventually work. It creates a ripple effect on all aspects of a business. By measuring the success of a strategy agency can easily determine what works.”

  1. Overselling services

Jodie Mason of Clively Digital Marketing says “Overselling services  will cost a marketing agency money. For example, you provide graphics design. The client also needs search engine marketing services. If you don’t have the skills to execute a paid media strategy, you could end up costing the client a lot of money. If that happens, the clients looses faith in your agency  and ultimately takes their business elsewhere. Avoid this mistake by creating mutually beneficial partnerships with other agencies or freelancers that do have the skills your agency lacks.”

  1. Unorganized business processes

Richard Garvey of Different SEO advises “Before we started building our operations, it wasn’t very easy to coordinate people within the company. That affected the productivity and efficiency of our team and, hence, forced us to waste more money and time on non-value-added tasks.

Properly organized processes provided us with a sense of direction, helped us outline measurable goals, and reduced the time spent completing tasks. It improved the quality of the workflow, made it possible to bring more control, and helped guide our day-to-day decisions.”

  1. Unused subscriptions

Danielle Milne of Digital Hopper says “We’ve all done it, signed up for an online subscription to this software or that, thinking we’ll use it, and then we never do. Marketing agencies are the same. It can add up fast, and is a total waste of money, especially because the service is usually on autopay. To stop this happening, review all software subscriptions on a quarterly basis. Run through a test of asking: Can we stop it, continue it, or start a new one that replaces several or is less expensive.”

Bill Balderaz of Futurety advises “One of the mistakes I see agencies fall into is licensing a large number of tools that don’t create value or are used once and then forgotten. An agency may spend $70 a month for this analytics tool, $100 a month for this SEO tool, $120 a month for this A/B testing tool. Pretty soon you have a giant recurring monthly bill for tools no one uses (or can even find the passwords for!) To prevent this, first go through your monthly credit card bill and start cancelling tools you don’t use. Then look for tools that duplicate features and cancel all except one.”

In conclusions, it pays to be paying close attention to your finances and the way your agency is operating to ensure you aren’t making costly mistakes. From the way you price out your services, to your processes, to the way you hire your staff- Paying attention to these seemingly small details can have a significant impact on your bottom line.