The Second Sin of Agency Owners – Growing by Default Instead of Growing by Design

You do great work and you’re justifiably proud that clients refer you to other people. But there’s a sin in this that you may find yourself committing.

A lot of agency owners take pride in the fact that most of their new business comes from referrals.

To them, it shows that they’re doing a great job. Clients love their work so they tell others about it.

They’re so proud of these referrals that they’re not focused on marketing. And that means they grow by default rather than design.

The Symptoms

The big symptom of growing by default is that you get the big emotional high when a client refers someone to you.

It’s a great ego boost to know that someone’s recommending you based on your work. The issue is that it’s not something that you control.

Another big symptom of this comes in your relationships with your clients. You build such great relationships that you end up over-servicing them without really noticing it. A little freebie here and a bit of advice there goes uncharged.

You end up so focused on making your clients happy that you forget to build your own pipeline.

The Problem

What happens if the leads dry up?

Say that your clients stop referring people to you. Perhaps they’ve run out of contacts who need your service so they can’t point someone in your direction.

Maybe your biggest client decides to go with another agency. They’re going to take all of those referrals with them.

There’s another problem. Relying on referrals limits your agency’s growth. You can only grow based on how much work your existing clients send to you.

That’s what I mean when I say that you’re growing by default. You have no control over your rate of growth because it’s completely reliant on other people.

Say you want to grow the agency by 50% this year.

When you have a referral-only model, that may not happen. Your clients may only offer enough leads to grow the business by 10% or 20%.

Think of your clients’ networks as one big bowl of candy. It feels great to grab some of that free candy whenever you want it.

But eventually, that candy’s going to run out.

The Root Cause

The big cause of this sin is that most agencies focus too much on making clients happy when they start up.

They focus so intently on this that they forget to build their own pipelines of hot prospects. They’re not doing any marketing at all.

That’s what happened to my client Josh Moran. He’s more of a product guy than a sales guy. That naturally led to him focusing on improving his product to try and get more sales.

However, he did that so much that he spent all of his time trying to please his existing clients. That meant he had no more time for marketing so he stalled out.

If you avoid the early work of content marketing, positioning, and foundation building, the business will grind to a halt.

Dev “Built by Design” Basu