Why Bigger is NOT Better.

In the latest 2023 Outlook for Digital Marketing Agency Owners , published by CallRail, there are some shocking stats:

On average, in 2022 agencies in the report had had 157 clients but only retained 44% of their clients and acquired 69 new clients.

This massive need for scale and new client acquisition has major consequences:

1) The current customer base pays for all the overhead and a the lead generation machine, making the cost of the service less competitive.

2) With > 100 clients on average, its hard to take care of all your customers in a personalized way – causing some of them to switch agencies as the price point wasn’t competitive to start with and they feel they do not receive the personalized service they deserve.

3) Given the high overhead that needs to be covered(e.g. the marketing tech stack), new client acquisition requirements are extremely high which drives the cost up again (see step 1).

What is the solution? In our case, staying as small and lean as possible and focusing solely on what is good for our customers. This means using free tools where possible, working in a shared office space and limiting the number of clients we have at any given time.

Growth that is required to fund overhead is not sustainable. Growth that comes from customers asking you to take on more business is.