Performance marketing and advertising agencies do work for other companies. They execute deep down in the marketing channel – they know the levers and pullies to engage to drive a client’s performance. But that isn’t how ad agencies really add value to their clients. In some ways, the best agencies don’t need to have the best execution, they need to have the best strategy tied closely to execution. That provides the best value-ad to the client AND it allows ad agencies to raise their fees! You aren’t going to win on being the best at managing broad match modified keywords, you are going to win by knowing what broad match modified keywords make sense for the client. Your value comes from strategy and execution and when you add more value, you can charge more money. After a phone call with an agency owner today, I went on a little rant (below). And if you want to learn more about how I help agencies grow faster – check out #TRIPLETHIS – Agency Edition.

Video Transcript:

Hey gang, I just want to tell you about a discussion I just had with an agency owner. They’re in the midst of pitching for business, for customers that are bigger than they’ve ever pitched before. They’re feeling really anxious. As we were going through their value propositions, they were essentially focused on their technical expertise. How good they were using the tools. How well they understood the Facebook pixel. How well they were able to use Marin, or Kenshoo. Or understand modified broad match and paid search. Or how well they could really execute on the technical SEO opportunity.

All of those are great things. Those are super things to focus on. But as an agency owner, and especially for you startup agency owners, you should understand that this is not why customers hire you. It is assumed that you can in fact, execute on all the tools at your disposal. It is understood that you know how to work a paid search campaign, or you know how to do SEO. Clients hire you, not because of your ability to do, but they hire you for your ability to create strategy and think. If you are focused on your expertise as a doer, you very quickly become a commodity. You become a company that is outsourced labor. You become a temp agency, so you end up working by the hour, or by the project. You end up with compressed contract values, because doing is only modestly valuable. Knowing what to do is way more valuable.

Being able to tie together, the technical tactics you can execute on, together with real strategy that is influenced by your experience, that’s where you create value. You create value with your brain, not with your fingers on the keyboard. Understanding the marketing challenges, and opportunities to overcome those for your customers, is in fact your real value add. The execution of campaigns, while it must be done really well, execution is not your value. Execution is what makes the customer believe in you, and keep on paying you. But you create your value. You generate the most fees by being able to add value at the top. So don’t forget in your proposals, and in your pitches, and in your discussions, to really talk about the strategic piece, because the tactical piece, the execution, the working of the tools, well that just makes you, again, a temporary labor force.

You really want to charge for, and create value around what you know, and how you can think, and how to leverage your experience. The technical details are actually just that. They are the details, and they are technical. They may help you squeeze more juice out of campaigns, but they are not where you create your value. Thanks a bunch guys. See you tomorrow.