Welcome to episode 88. My guest is Rob Da Costa, an agency growth consultant from Da Costa Coaching. We discuss a myriad of topics, including:
- the process for hiring the right account manager at your agency
- examples of how to set client expectations and boundaries
- why having a written scope of work is key to successful project delivery
- and Rob’s thoughts in general on the agency landscape and the future of agencies.
During our chat, one theme keeps emerging, which is ensuring you have the right systems and processes in place in your agency. You’ll therefore understand why he wrote ‘The Self Running Agency’, which free to download on his website.
Transcript
Jenny Plant
Today, I’m delighted to be joined by Rob Da Costa. Rob started his PR agency in the early nineties and after eleven years he had built it up to 25 people, at which point he sold it and started Da Costa Coaching in 2007. Da Costa Coaching helps agency owners build their business in a profitable, sustainable and enjoyable way. He’s the author of the book The Self Running Agency, and the host of the podcast The Agency Accelerator. Big warm welcome, Rob.
Rob Da Costa
Thank you. And what a great introduction as well.
Jenny Plant
Honestly, is there anything you’d like to add to your past before I dive into the questions?
Rob Da Costa
Not really. I guess I always do say to people, what you said, to build your agency in a profitable, sustainable and enjoyable way, that last bit is really important because I think a lot of people get very fixated on the destination and they forget about enjoying the journey and of course, we may never quite get to the destination. So, giving people permission and helping them make sure that they enjoy the journey of their agency’s growth is super important as well. I would also just say that was something that I certainly didn’t get right when I ran my agency and I see a lot of the agencies I work with very fixated on this supposed light at the end of the tunnel and almost expecting to not have an enjoyable time because they have to work really hard and they’re not going to get paid very much because they’re reinvesting in the agency.
Rob Da Costa
And I sort of say, what would you do if you never got to that light at the end of the tunnel? Would it all still be worth it? So, I think I just like to reinforce that enjoyable part and explain why I always say that it is a crucial part of growing an agency.
Jenny Plant
Love that. Because it can be pretty relentless, can’t it, in agency world? So, would you mind starting off by explaining the biggest problems that you help agencies fix?
Rob Da Costa
Yes, I think a lot of people come to me when they have hit a brick wall, they are probably doing quite well, but they just can’t get over that brick wall to the next stage of growth. The things that have enabled their agency to be so successful up until that point often become the things that become obstacles because everything’s dependent on them and I just had a call before our podcast interview with a potential client and she was telling me how the brand is really her and all the clients want her on the account and that is a typical problem. Of a feast or famine cycle because they may well have relied on referrals and word of mouth to get all of their business and suddenly that isn’t scalable, and they recognize that they need to put some systems in to get more business in that is in their control, so more outbound marketing and sales to generate inbound inquiries. So I think helping the agency owners get out of the way so that they can put systems and processes in to start scaling their agency,
Rob Da Costa
I think often people come to me because they are really busy, but they’re not profitable enough, so they don’t want to be busy fools working really hard, but actually not making very much money. We end up looking at how they bill their pricing, we look at the account management side of things to make sure that they are not over servicing their accounts. Then I think the other reason people come to me is because they want to scale their agency, but they don’t really know how to. So we need to work on putting a plan and a roadmap together that includes building a team and then helping them become good delegators because let’s face it, most agency owners are control freaks. We all are, that is why we started our business. One of the reasons we start our own business is that we want control and yet now I’m saying, well, actually, you need to relinquish some of that control because you got to start delegating to your team.
Jenny Plant
And if you don’t delegate to your team, then you are going to have just more and more stress on your shoulders and then you are going to get burnt out and you will look back and think, that wasn’t worth it. And having that coaching, that external perspective is really helpful. Just out of interest, when you were building your PR agency, did you have any external counsel?
Rob Da Costa
No, and I tell you, if I could go back and give my younger self a bit of advice, that would be it. I started agency in the early nineties and sold up in the early two thousands, and coaching and mentoring just wasn’t a well-known thing.at all. I had to make that analogy today. I’d have to explain to them that an agency doesn’t just get a coach when they’re not performing well, they get a coach when they are performing really well, just like a sports person, I had to make that analogy. Today, I think it is better understood, but back then, not at all. So no, I didn’t is the long answer to a short question. And I would justify that by saying back then, coaching just wasn’t very well known.
Jenny Plant
During those eleven years Rob, what do you believe that the coach could have made the biggest difference? I know it might be a bit of an unfair question, but during those eleven years, obviously you found your own way, but what, in hindsight, was one of the biggest mistakes that potentially you would have really appreciated an external perspective on?
Rob Da Costa
I think having a plan and a roadmap, we kind of had a plan and were good at business development, but we let too many external factors dictate our trajectory I think, so having a plan, that would be the one thing I think a coach would have said. The second thing he or she would have said was put a senior team in place, have a really strong number two, and get work off your plate so that you can then focus solely on running the agency, and also if you wanted to work two days a week in the agency and go and pursue your other interests rather than selling up. And I think a coach would have helped me realize that there were other options. Not that I regret selling, but that was the only option I saw and I think a coach would have helped me realize that there were other options. Like I say, putting a really strong second in command in place, building a really strong leadership team, delegating all of that day to day client management stuff to them, freeing me up to have a bit more flexibility and freedom, which, at the end of the day, I always say there’s three reasons why we start our own business, we want control and flexibility and freedom and we very quickly give all three of those up if we’re not careful. And so it doesn’t matter where you are in your journey. And I just want to say in favour of coaching, and not that I’m trying to sell myself, but I am old and grey and I still have a coach, I am still part of a coaching program because I just really enjoy learning, I enjoy being inspired by other people. It does not matter where you are in your journey, we should get some outside support in one way or another.
Jenny Plant
Hundred percent, I do too and I find it just phenomenally helpful. So, can you talk to me a bit about what are the common themes that you come across when agency owners are managing clients and some other maybe, mistakes, that they make around management of clients?
Rob Da Costa
Yes, when it comes to owners, I think the biggest issue is they know what they’re doing and it’s in their head and they expect other people to telepathically understand what they do and for an owner to start documenting that is a bit of anathema because by definition, usually, entrepreneurial owners are not very detailed people. When it comes to owners, I think the biggest issue is they know what they’re doing and it’s in their head and they expect other people to telepathically understand what they do. So I think they can fail quite quickly when they hire account managers or account directors and don’t kind of spend time. I mean, one of my favourite expressions is slowing down to speed up. And that’s certainly what you would have to do in that case, is to slow down and actually invest time in training your account manager, to not only be a great account manager, but also to do it the way that you want, so that you can then confidently say to the customer, look, I know you want me on the account, but actually it doesn’t really matter who is on it because you are going to get exactly the same experience, exactly the same communication, exactly the same quality, whether it’s me or whether it’s Jane or Fred. I think that’s the first thing and when you ask what are some of the common mistakes? And before we know it, we have got massive scope creep and that means that the client feels like they can just keep asking you to do things, say, hey, “can you just” – and the account manager wants to delight the client and says yes of course I can. Then we look at our bottom line and we realize that we are not anywhere near as profitable because we are doing so much more than the clients paid for and of course the more we say yes, the more the client is going to expect us to say yes. Suddenly the scope gets bigger and bigger. So, I think it starts by having really good clarity around the scope of work and then it also means putting good boundaries in place with your clients. That we need to understand internally what our service level agreements are. Then when we can’t maintain that immediate response rate now the client is disappointed, even though the actual service level says within a six-hour response time. Or are we running this mindset of going, “oh, we might as well just respond to them now”, because, again, we are setting this precedent of immediate responses and then when we can’t maintain that immediate response rate the client is disappointed, even though the actual service level says within a six-hour response time. And I think also if you take a step back from the scope of work,
the process that we go through when we actually prospect and win our clients determines the sort of relationship we’re going to have with the client. We need to make sure that not only have we got a good scope of work, but the client also understands that as well as our internal account team. Because if we are sowing the seeds early on in those prospect conversations of a real partnership, a respectful relationship, then that’s how the client’s going to treat us. But if we are not doing that in our prospecting phase and we are just sort of being seen as a supplier that looks a little bit better than the current supplier that they have, so they will just switch you out. Then we are going to end up with this very imbalanced customer/supplier relationship where the customer beats up the supplier and the supplier says yes because their only point of differentiation is being cheaper or offering ridiculous levels of service.
So we just have to get it right from the very beginning stages of those very first conversations we have in the prospecting phase, to how we write a scope of work, when we are writing a proposal and then how we onboard clients and how we set our stall out of this is how we’re going to work together. I think we have to make sure that all of the account team understand that and that they are involved in certainly the onboarding process as much as possible so that they are clear about how it’s going to work. And I think the other mistake I see, and I have seen this from both sides of the table, is where the owner of the agency wins the business and then they try at a later stage to pass it off to an account manager that the prospect has never heard of and of course the clients, they are already feeling disappointed because they wanted the owner on the account. Years ago I had a client that was recruiting a new agency, they asked me to sit in on the pitches and I sat in on the pitches, which was an interesting but boring experience and one agency came in, and it was very sexist, so I apologize in advance, But there was the owner of the agency that was a man in his forties and then there was a bunch of young women in their twenties that came in the room with him. They did not say a word, they tried to get a word in, but he was dominating everything and of course he was not going to be the person who was going to be working on the account so there was no way that agency was going to win the business. Then I think the other thing is when you’re hiring an accounts team for the first time, you want to hire the most experienced people that you can afford. So those are some of the mistakes. And then you get frustrated when they don’t do a good job or your clients are unhappy because they’re not getting the service level or the understanding that they had when you, the owner, was working on the account. That’s again, a long answer to a short question.
Jenny Plant
So many good, really valid points there. I wanted to dive into all of them. But just on the last point you made about hiring, I think this is a common problem among agency owners. Like how do I get this right? Do you have any kind of go to tips or pieces of advice for getting the right person, particularly in account management?
Rob Da Costa
Yes, I mean, listen, start by writing – this is really obvious, but it isn’t that obvious.
Start by writing a really clear roles and responsibilities for the role that you’re hiring. It might be part of a job description, but a roles and responsibility simply says, these are the roles that I want this person to take. This is the level of responsibility for each of those roles that they’re going to have and then this is how I’m going to measure their success. Because that gives you a benchmark of what you’re looking for then. And then you want to make sure you are digging into each of those roles in the interview process to find out what their experience is.
One thing that will often happen is that you might hire someone from an in-house role, so they have probably really good technical skills around whatever your agency does, and you need to think about some of the soft skills that they need to have. I think getting that right and not being afraid to ask those questions and ask them for real examples of how they coped with different scenarios. So you can think of all the things that happen on a day-to-day basis in your agency and turn them into questions that you’d really do your due diligence in the interview process. And then, like I say, what people need to remember is that when you’re hiring someone and you found a really great person, that’s not the end of the problem, that’s the start of the journey. You have got to really invest in those people to make sure they’re successful. Invest in their onboarding, which means a lot more handholding and training than you will do once they have got their feet under the table. Have a clear probation period, say six months, and don’t extend it if things aren’t working out. But know exactly the metrics that you’re going to measure them against in those six months to decide if they’re a good fit or not. And obviously give very good regular feedback to those people, both positive and negative when necessary. But make sure that you are being a supportive manager to help them rectify anything they’re not quite getting right. I don’t know if that answers all your questions.
Jenny Plant
Very thoroughly. You are essentially setting someone up for success. So, like you said, Robert, an example would be someone who’s come from an agency environment and perhaps they were working one big account within that agency and all of a sudden, they have got to manage multiple accounts and they might not have that proficiency or they might not have the experience. So, loads of different really good points there. I like the onboarding point as well and something just very tactical. I don’t know if you have, but a lot of people that are doing onboarding processes now are using AI and there’s a tool called Synthesisa have you heard of it? Synthesisa AI, and basically you input the text of your onboarding process and it will create a video. There’s a head, a talking head, which means you can make updates as you go.
Rob Da Costa
Amazing. Yeah, But I think it’s just so true, you have to set people up for success and I think often when agency owners are running at 100 miles an hour, they will feel like that is that fire put out, and let them go on with it. We do not want to take a single swim approach to this because it’s too costly. How much does it cost you? It costs you an awful lot. So, let’s be thorough in the recruitment process and also be thorough in that period of the first six months where you’re trying to get their feet under the table and you’re feeling confident that they can do the job and they understand what’s expected and then you’re going to give yourself the best chance of success.
Jenny Plant
Do you advocate for a kind of always be hiring kind of approach? Like always having an eye on who’s around and filling that bit bench in advance, do you think?
Rob Da Costa
Yeah, I do actually. And since I started this agency, this business, in 2007, I think that’s almost always been the case because in 2007 were midway in a financial crisis and everyone was staying in their jobs, so it was hard to recruit. Then the economy got good and it’s hard to recruit when the economy is good because there’s lots of jobs out there and I think at the moment it’s hard to recruit still. So I think it is always a good idea to be keeping an ear out there and looking for good people and sometimes you have to take that risk to say, well, actually, I’m going to hire them because that will free up my time to get more business to fill their capacity.
Rob Da Costa
So I think, yes, you should certainly have an ear to the ground all the time because let’s face it,
if I decided today I want to hire an account manager or an account director for my agency, it’s probably going to take me three to six months to find that person and I don’t want to get to the point where I desperately need someone today if it’s going to take three to six months, because then we end up fulfilling that capacity with things like freelancers and so on, which is fine but it can cost us an awful lot more money and it isn’t really creating a lot of scalability because they come and go and they have their own agendas. So I’m not saying using freelancers is a bad idea, it’s a good way of plugging a gap, but it’s also going to cost you more money.
Jenny Plant
Really good point. And if you don’t get freelancers then you’re potentially putting extra workload on your existing staff and then they get stressed out and demotivated. So it’s like a knock-on effect. Really good point. Do you have any view on the optimal agency structure, particularly when you want to foster an environment of a high performing team that delivers excellent client service? Do you have any recommendations for agency owners?
Rob Da Costa
This is a really good question that doesn’t have one clear answer. I thought about this and I thought, well actually I believe it depends on the type of agency. So if you have got a PR agency, a social media agency, a content agency, you may well have the AM model where the AM is being a PM as well, but then when you look at the sort of design, graphic design, web design, digital app kind of agency that lends itself, I think, much more to the account managers being the people that are running the account and bringing new work in and then the PM model of the people are actually delivering the work. So the subject matter expertise sits with the PM, not with the AM. I really think it depends.
In my world, my background of PR, it was always the account managers were the subject matter experts and the people that were delivering the work and the account directors were the people that would have responsibility for sort of new business. In other words, you might have an account director, two account managers, two account execs as a team that work on a bunch of accounts together and then another pod looking the same as that, taking on another team and then it becomes quite easy to plug in the next team. Now, the one word of caution about that approach is to make sure that you have really good systems and processes in place that everyone is following. So every single pod or team is doing things exactly the same way.
I worked for a client before that crazily, did not have that in place and they had three or four pods and they were all doing things their own way. I know, it sounds so stupid, sounds really stupid. But trust me, it is very difficult to untangle that. So, create your best practice with one team. Document the key look at the client journey and document the key processes of managing the client. And then when you grow your second team, you can just have them follow those same documents, same systems and processes. Document the key, look at the client journey and document the key processes of managing the client.
Jenny Plant
I think it’s really worth noting what you have just said because I too work with a lot of independent agencies. I have worked for multiple independent agencies, but I’ve also worked for the Have-asses, the publicists, the WPPs and the network agencies and I have to say process was everything and God forbid if you don’t follow that process you are hauled over the coals.
Rob Da Costa
But what that creates is a real scalable model and that’s why these big giant networks can exist because for everyone it’s drummed into you from the moment you step in. Totally, and if you’re running your own agency and you aspire to sell it one day, what is the value in a service-based business? But
one of the key things that’s going to add value to your business is scalability and what’s going to make you scalable is consistent systems and processes. So if someone was looking, and if I was a buyer and I was looking at two agencies that on the outside looked the same because they both turned over the same revenue, they both had similar profit numbers with similar people, but one of them had really well documented systems and processes, that agency is worth multiple times the other one, because the acquirer will be able to look at agency B, the one with the systems and processes, and say, I can see how I can scale this business. Whereas they’d look at agency A and they’d say we are going to have to reverse engineer a lot of what they do and invest a lot of time getting some consistency in that business before we can sell it, scale it.
Jenny Plant
I agree with you. And also it makes onboarding so much easier for new staff, doesn’t it? It sets the expectation for what clients are going to receive and what they’re not. So they’re more likely to refer their friends than other areas of their business because they know that they’re going to have a kind of predictable service. So yes, really good point. Just carrying on with theme of managing client relationships, do you have any kind of go to best practice tips or techniques for managing client relationships?
Rob Da Costa
Yes, the overriding one is good communications. Know how you want, and how your client prefers, to communicate, do not just do everything via email. And in that monthly meeting the context is to review work and set out the store for the next month. Have both your formal and your informal communications laid out in your onboarding process so that the client knows they are going to get a monthly meeting with you and in that monthly meeting the context is to review work and set out the store for the next month. I think that’s really important. And as I said earlier, make sure you’ve got a really well written scope of work so that your team understands what you are doing.
That means that you are empowering your team. So even little Jimmy, the account exec is able to say, look, the client’s asking us to do this, but I know it’s not included, so how should I handle it? Because we live in a world where people believe that if I don’t jump, when the client says jump, then we will lose the client. And some agencies work like that. Then they have high tenure of staff, they have difficult client relationships, they have unprofitable client relationships, and they have a very stressed agency and that’s how the account teams believe they have to operate. Make sure all the account team understand it. Make sure the client understands it. Train your team members so that they know there’s five answers to the question of can you just do this? So that moment where the client says could you just do this? And in their mind it’s 20 minutes work, but the reality is its half a day’s work and we say yes, because we want to delight the client, know that there is five answers to that. Yes, we can do that, but we need to swap something else out that we’d agreed in the scope of work for this month. Yes, we can do that, and it will cost you this much more money or no, we can’t do that. But they won’t be able to implement that unless they understand the scope of work. And so I think that’s really important. I teach a thing called Standards and Extras and it’s not something that I invented, but it is really powerful. I would teach account teams this and this is not about what we do for our clients. It’s about how the client perceives what we do. Let me ask you, do you send out Christmas cards to your clients? And if I said that, a lot of people will put their hand up and say, yes, we do. And I’ll say, is that a standard or an extra? And they’ll say, oh, it’s an extra and I’d say, well, if it’s an extra, then if I stop doing it, the client’s not going to feel anything, they won’t mind that we’re not doing it anymore. But if I send you a Christmas card every year and it’s the best Christmas card, you always receive because it has flashing lights on it, you will always remember it, and if the next year I don’t send you that card well, you are going to be thinking, well, what have I done wrong? So people perceive – that example, that sending a Christmas card is an extra, but in reality it’s not seen as an extra because if I do not send it, I am going to be disappointing the client. We need to make sure that the team understand that our standard service and extra service isn’t necessarily what we do, it’s how the client perceives what we do. So if you want to make Christmas cards known as an extra, not a standard, you will almost have to say, look, we don’t send these every year, but we want to send you this card this year because we love you and we want to say thank you, then I’m positioning it as an extra. Now, Christmas card is a really silly example to use because of course you wouldn’t do that. But you may choose with a service when the client asks you to do something, rather than just saying yes, you may say to them, well, look, on this occasion we will do it, but it’s outside of the scope of work, but we want to help you, we would normally charge you this much money for it, but in this case we’re going to do it for free. So you need to make sure that your accounts team are empowered to have those kinds of conversations and not just say yes.
Jenny Plant
I love that. I think that’s such a good example. And it’s like going to a coffee shop, isn’t it, where systematically every coffee you receive has a little biscuit. This actually happened to me recently, and so you get used to having that biscuit because that’s part of the package, but then one day you don’t get the biscuit and you feel a bit robbed and you think you are missing out on something. So I think that analogy is brilliant.
Rob Da Costa
Can I give really quickly a real business example of this, please? Years ago I was working with a client, and this happened to them. So back in like, say, 2008, 2009, they were developing a website for a shop and so it was an e-commerce website, transactional website, and in those days there weren’t a lot of readymade plugins, so it was quite a technical build. So they quoted, I don’t know what it was, say, £30,000, £40,000 to the client. Then they quoted an extra £1000 to write a user manual showing the shop how to upload products and how to change prices and all the rest of it. And the client said, we want to go ahead, but we don’t want to pay, we are not going to pay the £1000 for the user manual. They are getting to the end of the build and they thought, well, it’s quite complicated, so we need to show the client how to upload it. So we’ll just give them for free a sort of a down and dirty three-page guide on how to upload it. They send it all off to the client. The client’s happy with the website, but the Managing Director phones, the shop owner phones them up, says, I’m really unhappy with the user guide that you’ve sent over. It’s not very detailed and it’s not very clear for everyone how to use it. And they are thinking, hang on a second, you didn’t want to pay six, seven months ago you said no, so we are doing this as a favour, as an extra. So then the agency said to me, well, how could we have done that in the right way? Well, first of all, you should have reminded them that they didn’t want to buy the £1000 one, but we are doing this for you anyway. Second of all, you could have put a line on the invoice with a price on it and then a discount of 100% to show that they were getting it for free.
Jenny Plant
Brilliant example. And it is about how you manage that situation, isn’t it, Rob? Brilliant example, I don’t know what you think about this, Rob, but it’s an observation that I have made that often your scope of work is just in the same format. And what I mean by that, a lot of people are not detail oriented. So if you’re providing a long scope of work, they are very unlikely to have read it, to have understood it and to be following it. So it comes as a surprise when they ask for an extra that it’s out of scope. What are your thoughts?
Rob Da Costa
Yes, well, I think I said earlier,
one thing you want to do with your clients is understand the best way to communicate with them because some people are visual, some people are readers, some people are watchers. And of course, their profile typically might mean that they’re not detailed people. This is why I think agencies that send detailed monthly reports outlining every task they’ve done is just – I think they are covering their backsides. They are trying to justify their existence. Clients are never going to read it. So I think understanding your clients disc profile and therefore how best to communicate with them is a really smart thing to do. We all know scope of works change. So I would say on a quarterly basis, when you’re having those strategy planning sessions, what comes out of that is a scope of work for the next quarter. And you might highlight seven projects that you are working on so you can keep it very succinct. My feeling is that you need to provide the high-level summary, focusing on the outcomes of what you’re trying to do and then the detail that sits beneath it for you or other people in the client that might want that detail. You don’t just blindly do it. One thing we should recognize is that everyone digests information differently and we need to not just think one size fits all because we’re comfortable with that.
And the second thing is that the world changes and the scope of work needs to change to reflect that. So revisiting it on a quarterly basis. And of course by doing that, you also give yourself the opportunity to upsell because when you are having those quarterly reviews and they are asking you to do these extra things, you can say, yeah, absolutely, we’ll give you a price for that and it becomes a very easy sale. So I think it’s a very sort of gentle way to get your account managers into that sort of upselling and selling mode and not just on the treadmill of trying to keep their clients happy, doing the same thing month after month and hoping that they’ll never look in detail and say that this isn’t working.
Jenny Plant
I think this is about really keeping a handle on the scope, keeping it really detailed. I think the agencies I’ve been working with recently are American based and they seem to have a lot more of a cadence of raising change orders on projects. What have you seen since 2007 Rob, when you started to help agencies, what do you feel has got harder for agencies and what, perhaps, has got easier?
Rob Da Costa
So I think it’s got a lot easier to start an agency than it was back in the day for me. A computer, Wi-Fi, a LinkedIn profile, and off you go. I think now that isn’t true all, I think there’s a lot more competition and it’s harder to survive and grow. And one piece of advice I’d give to anybody who is just starting that journey now is to find your space, find your niche, because the more you can be seen as an expert and not a generalist, the easier it’s going to be to survive. So I think in a nutshell, easier to start an agency, it’s harder to survive and grow, and you need to find a clear niche as quickly as possible because that will separate you from the competition. So not only will it be easier for you to find clients, but it will be easier for clients to find you. And of course as the expert, you’ll be able to charge higher fees. I think part of what’s happened in the it’s easier to get going is that we’re competing more and more against the Upwork /Fiverr type people that are creating agencies. And that’s a race to the bottom because it’s who’s the cheapest.. So I think that’s how I’ve seen the agency world. And of course, since I ran my agency, social media didn’t exist back then, the internet didn’t even exist at the beginning of me running an agency.
Jenny Plant
I want to pick your brains on that in a moment. But just going back to niching, if someone’s listening in and thinking, okay, I kind of know theoretically that makes sense for me to niche, but is resisting it for any reason, or says to you, Rob, I’ve got multiple clients in multiple sectors at the moment. We are doing a range of services for them. What’s the starting point for someone that is thinking, yes, good idea to niche, but I don’t really know where to begin.
Rob Da Costa
I think the starting point is challenge your mindset. So these stories that you tell yourself that if I niche, I will upset all those existing clients in all these different sectors, if I niche, I will limit my reach. If I narrow the product offering down, I will lose business, those are just stories you’re telling yourself. I would actually say that the opposite is true of every single one of those stories I just mentioned. The more specialist you are, the easier it becomes to find business, and as I said earlier, the higher the fees you can charge. Because you are positioning yourself something slightly differently. So I think one thing to know is that if you have a broad range of clients today and you are going to niche down, that doesn’t mean you have to fire those clients or even that they will leave you. So it’s fairly safe to say that if you establish a new niche, you won’t lose those existing clients. And I think then do some analysis.
The simplest way of working out your niche is to look at your clients. If you’ve been around for a few years, look at your client base over the last few years and identify the ones that you were most successful for, the ones you enjoyed working with the most, and the ones that you earn the most money in. If you take those three categories, look at the overlaps like a Venn diagram with the overlap. The middle of those three overlaps is going to be your niche. And for some people, it’s really easy. Like, for me, it was probably for you as well, Jenny. It was really easy to work out our niche because we had a background in the agency sector.
And the other thing I’d say is that whatever niche you choose today doesn’t mean you’re committed to that niche forevermore, because niching can ebb and flow over time so you just need to, I think, challenge your mindset.. Why do they have Coke Zero and Diet Coke and all the rest of it? Well, they have them because they’re targeting very specific niches. Coke Zero is aimed at males of a certain age, whereas Diet Coke is aimed at females, even though the product is probably exactly the same. So even big and what would appear very generalist brands are not generalists, they have their sub niches. But for agencies I would start with ideally one niche and broaden out over time.
Jenny Plant
It’s quite ironic, isn’t it? Because as marketing agencies, we’re often giving our clients this advice, but we find it hard to take ourselves. I mean, I’ve got a great one, and you have probably got a multitude of different examples, but I’ve got an example of an agency, Copy House. She has grown exponentially in three years. Because she focus on copywriting for the tech and fintech industries. She’s out speaking at events around fintech and tech. She gets all of her clients together across those client sectors and takes them out. So they network together. There’s all of these unusual benefits that transpire and also it makes it easier to cross sell and upsell. So, I absolutely agree with you.
Rob Da Costa
At the end of day, if you take Copy House as an example, if they were trying to be a generalist copywriting agency, well, they would not be able to go and speak at those events because they would not know what events to speak at. So when you have a clear niche, it becomes so much easier to identify your audience and where they hang out, in this case at conferences, so go and engage with them.
Jenny Plant
Absolutely. So just final question really, can you talk a bit about any trends that you’re seeing in the agency landscape and where you think that potential opportunities and challenges are for us in the future?
Rob Da Costa
Yes, I think, carrying on from the previous point, there are a lot of digital agency start-ups and a lot of them lack differentiation. When I ran my agency, we did lots of things wrong. I think technology is super important, and the way the world has changed. So I think technology is really enabling us to run our agencies better. One of the things we did right was measuring time internally and we used an Excel spreadsheet, whereas nowadays there’s so many great agency-oriented apps like Harvest and Toggle and Stream Time. So I think technology is really enabling us to run our agencies better. And of course, I can’t not mention AI in this conversation because it is a massive, massive game changer. And it’s going to impact the roles in agencies. It’s going to enable agencies to be way more efficient. And any agency that’s trying to fight against that at the moment, I mean, I’ve heard people say, oh, well, it will never replace copywriters and all the rest of it. Well, of course it won’t, but what it will do is change the role of the copywriter and it will enable the copywriter to have far more capacity because they can work much faster to deliver good quality content. We are always going to need great copywriters to ask the right questions and put the right copy into AI to produce the right copy out of it. So I think AI is a massive game changer. It will write someone’s biography. I use a tool now called Cast Magic that really helps me with my podcast because it does the transcription automatically and it comes up with some great titles for the podcast. Just from an email address it will write someone’s biography. It’s amazing and it saves me probably 2 hours a week because it can do in 15 minutes what I could do in 2 hours. Of course you have to edit it and then there are a million versions of that for design and imagery and everything else. So I think it’s very exciting and agencies need to embrace it, not fear it. I think that’s really the big thing that’s coming down the road and it appears to be running at such a pace at the moment. Well, of course, it isn’t really because it’s been around for a long time. We are just seeing the practical applications of AI emerging, which is why it seems to have come out of nowhere. And I guess the other thing is that we need to get really good at engaging our employees and keeping our staff and retaining our staff and recognizing different demographics have different needs, and not thinking that it’s just about competitive pay. Well, of course it is, but it’s also about all these other benefits that are really important to the millennials and their gender. I mean, I’m no expert on all of that, but I know that community and giving back and all of that stuff is super important. And I guess the other big trend that’s been brought on because of the pandemic is the concept of remote working. We figured out that we could work from home and a lot of people have. Almost all of my clients have not gone back to the pure five day a week office. So just working that out and how that can work is becoming super important and it’s actually making recruitment easier because it means I can hire someone in a different part of the country or even in a different country and still communicate with them and still make them feel part of the team. Not on the lag where you are waiting and seeing or even fighting it because you think it’s bad. If you think about it, I don’t know, the Kindle came along and they said that was the end of the printed book and the calculator came along and that was the end of kids knowing how to do maths and the Internet came along and that was the end of I don’t know. We have seen it all before, we have seen the cycle so many times. And so all these scare mongers talking about AI, well, it’s not going to do any of that stuff. It’s just making our lives way easier.
Jenny Plant
I think that is good advice, embrace it. Funny enough, I saw a friend at the weekend who works in a very big popular agency and they have been banned using it, can you believe it? Because there’s this worry about legalities and we haven’t quite I mean, I don’t think the regulations have caught up yet, so there’s that kind of we’re at that precipice. Thank you so much for sharing so many tips, so many ideas and insights. It’s been really gripping. I’ve learned a lot.
Rob Da Costa
My pleasure.
Jenny Plant
It’s great. So, who do you typically work with, Rob, and how can people contact you? Who would you like to hear from?
Rob Da Costa
Yeah, I typically work with agencies. Somewhere between one and 25 staff is sort of my sweet spot. And they aspire to grow their agencies and, like I said, they want an expert at their side, providing them advice and confidence and tools and techniques to grow. So that’s sort of my ideal target client. And in terms of reaching me, the best way is just to drop me an email at robert@dacostacoaching.co.uk. Or my website, dacostacoaching.co.uk, or reach out to me on LinkedIn, which is Rob Da Costa.
Jenny Plant
Amazing. And just to say, on my website, there are lots of content around, lots of the topics that we’ve spoken about today that people can grab for free and learn more about niching or any of the other things that we’ve talked about today. This has been brilliant.
Rob Da Costa
Great. It’s lovely to join you today.
