Our privacy & cookies policy

Waypoint Partners uses cookies. Please read our privacy policy below for more information.

Accept cookies

News & Views

How can agency leaders leverage profitability to drive growth?

by Alex Waite
News
|
18th March 2020
How can agency leaders leverage profitability to drive growth?, post image

How to build business value and drive growth

In brief:

  • Liverpool was the host for our workshop on ‘Driving Profitability & Sales Transformation’. Our sessions are interactive, encouraging open conversation making sure agency leaders gain real value.
  • Like many other Northern cities, Liverpool contains a hub of ambitious and scaling agencies across the marketing, digital, creative and tech space.
  • Successful agencies are turning a service-oriented proposition into a value proposition – a more compelling offer that differentiates from the competition.
  • In tandem, you need to understand and control how client work is delivered, with agency leadership responsible for setting the context in developing commercial acumen.
  • Tools for measurement and inspection on the key performance metrics and drivers of profitability will improve commercial performance.

Value based sales is fuel for growth

When we think of growth we often leap immediately to new business and sales. This can often create a mindset of vending – selling our capabilities and experience rather than the outcomes that they create and the value that they drive for clients and their customers. The challenge is understanding the problems that agency services, expertise and USP’s solve for clients – identifying the bigger picture of what a clients’ pains and motivations are in order to establish the true needs and wants of what they want to achieve.

In turn, agencies that develop this deeper understanding turns a service-oriented proposition into a value proposition – a more compelling offer that differentiates from the competition. This increases the opportunity to win new business – often at a higher price-point and hence creating greater leverage for agencies to generate profit as well as higher value and better outcomes for the client.

Business performance: sales and operations need to work in tandem

Whilst value-based selling increases new business wins and generates the opportunity for profit via new revenues, profit is only realised upon delivery and execution of what has been sold. In tandem with developing an approach to value-based selling is the need to understand and control how client work is delivered.

Realisation of profit will only occur when the right checks and balances are in place to direct staff to deliver against client work. Time is the primary resource in a professional services agency and, to be successful, there needs to be a broad understanding of how the agency model makes money and some guide rails to follow to help staff execute against client work in a way that supports business performance and develop a culture of commerciality within the business.

People want leadership to guide their contribution to the wider agency vision and goals as well as understand how to maximise their performance.

This can be a challenge, but agency leadership is responsible for setting the context in developing commercial acumen throughout the agency. This will help to drive answers on key commercial questions such as price-setting, over-servicing and productivity to help realise the growth ambitions of the agency. 

What gets measured gets better

It’s so important to put in place tools for measurement and inspection on the key performance metrics and drivers of profitability to improve commercial performance. Planning for profit and managing for profit must both be conducted to ensure that agency growth is achieved.

Developing often simple tools and processes to measure, monitor and take action on to drive profit are necessary to realise true growth through profitability. For agency leader to drive a culture of commerciality that translates to bottom line growth, they need to demonstrate a true understanding of rates, write-off, utilisation and regularly monitor and course correct these when necessary.

This is true both in existing projects where client work can be planned, resourced and executed against to maximise opportunity for profit but also in new business where inspection on pricing and specification of work can help agency leaders predict the revenue and profit contribution from pipeline deals.

Prioritisation

The challenge for agency leaders is to deliver on all of the points discussed. Embedding the commercial thinking, tools and processes that drive profitability across both sales and operations is no small task. What should be the primary focus, how to avoid the day-to-day challenges of running the agency?

There may not be a definitive answer to those questions but throughout the session we exchanged a number of initiatives from agency leaders geared towards profitability through value-led sales and operational controls to support their growth ambitions and attain increased business value.

What next?

If any of these points have resonated and you’re keen to join the conversation – we are running our Driving Profitability & Sales Transformation via a webinar. Below is some of the terrific feedback from agency leaders we received from this event. We hope to see you there.

Our highly experienced team have walked in your shoes. Having run businesses themselves, they know how to make incremental changes that really make a difference to leadership teams. If you want to discuss any of the topics in this article:

CONTACT US

What’s your challenge?

Get in touch today to find out how we can help you

Contact us