There are two core metrics that should drive a lot of the decisions you have in your organization; churn & sales. A great agency is constantly studying these two numbers diagnosing them from every angle learning specific areas of opportunity. 

The more you are able to understand these numbers and what they are composed of the better you’ll be equipped to making the right decisions for your business.

In this report, we want to look at churn, which is something we’ve been studying for about 10 years across two different agencies. The first one was scaled to over 1,000 clients and the second one we’ve scaled to over 200 full time employees in just 5 years. 

When you’re a young agency, churn is so important because 1-2 clients can represent a large portion of your income, however as you scale, the same is true. Imagine you’re an agency like Hite and you’re doing $500,000 per month in MRR.

If you have 10% churn monthly, you’ll need to do $50k in new sales just to break even. If you can create an environment where you’re more likely to have 5% churn, if you do $50,000 in sales you’ll grow by 5%.

Understanding why clients leave and acting on it, isn’t only the key to scaling. Agencies with lower churn, partake in other benefits such as receiving more referrals & a much higher evaluation when it comes to selling the business. 

Hite is constantly focused on understanding the why behind our growth & this is essential for your business if you want to scale in 2023.

Churn is critical, especially as you scale for churn is a representation of the quality of your product, service, & customers.

Every agency is constantly battling both the increase of sales and the decrease of churn.

Defining Churn? 

Churn can be broken down in a lot a ways, but for agencies, the most common two churn metrics you’ll see is Client Churn & Financial Churn. These two churn types can be define these two churns as followed: 

For Client Churn we will look at the monthly turnover of clients regardless of financial impact.

For example, If in January you had 10 clients pay you then in February only 8 of them paid you, that would be a turnover of 2 clients and equal 20% churn. In this example it would not matter how much each client represented financially. 

For Financial Churn, we look at the monthly turnover of revenue regardless of clients.

For example, if in January you had $20,000 in recurring collected MRR and in February you only collected 18,000 of that $20,000, it would represent a 10% churn rate. 

Understanding the difference between these two numbers is crucial, let’s look at the following list of clients. 

MRR

Client A $1,000

Client B $5,000

Client C $2,000

Client D $3,000

If we were to lose Client B, you would have 25% client churn, however you’d have 50% financial churn. There could be a very large difference in these numbers especially as you scale. 

The Problem With Researching Churn

Doing research on churn for agencies doesn’t come easily. First off, about 80% of agencies that exist today would be defined as micro agencies, doing less than $15,000 in monthly revenue of which the vast majority do not keep up with, nor have any data on their numbers, especially when it comes to churn. 

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If you take into consideration those that do keep great track of their numbers, between those they may manage and report back churn in many different ways, even beyond the above numbers.

For example, there is a well known agency that is doing several $100m in annual revenue that keeps track of their financial churn, but in their own way focusing more on net growth vs. churn.

In their model, they look at how much was lost, and measure that against what was upsold in order to come up with a net churn. 

With that said, we believe that this report takes all those data points into consideration arriving to tangible and definitive results.

The post How to Reduce Churn appeared first on DigitalMarketer.

They say employees are a company’s greatest asset, and it’s just as true for marketing agencies as any other business. The right team can help prove your agency’s quality, credibility, and competency to potential clients. So, it just makes sense that you want to find qualified candidates and, more importantly, ensure they’re in it for the long haul. 

Unfortunately, it’s easier said than done. Chances are, you’ve experienced this firsthand. Maybe you’ve lost one of your most talented employees or been disappointed by a lack of interest from candidates. Whatever the case, it’s worth looking at why this is and how you can change your approach for greater success. 

Why Finding and Keeping Qualified Candidates Is Tough

There are many reasons marketing agencies struggle to find qualified candidates and retain them. The two biggest factors are as follows:

1. Competition in the labor market
2. Employee expectations 

For starters, consider the competition in the labor market. There are more than 14,000 marketing and advertising agencies in the U.S. alone. And according to the Bureau of Labor Statistics, marketing job demand is expected to increase 10% by 2026. However, there’s a limited pool of candidates willing and able to perform at the desired level.

We’re all looking for a specific type of professional, right? At a minimum, the ideal team member is knowledgeable about marketing, has skills in one or more areas, and possesses the right attitude for success. A person with these traits who cares about helping clients grow is a hot commodity. Every agency that’s hiring wants them!

In short, the competition is fierce. Your competitors are trying to attract the same high-quality candidates as you are. So, you have to work extra hard to stand out and encourage them to apply for a position at your agency. And if you manage to bring them on board, you need to prove their decision was the right one. After all, there’s no shortage of options available to them.

But that’s not the hurdle you have to overcome…

There’s also the fact that the wants and needs of today’s marketing professionals (and workers in general) have changed. 

For instance, employee expectations include more than just a salary reflecting their value. People are looking for things like…

• Positive work culture
• Recognition 
• Flexibility
• Transparency
• Respect
• Purpose 

Unfortunately, these are things that many agencies neglect to highlight when recruiting—or worse, fail to deliver in the workplace. And in the second scenario, it leads to great talent leaving for other opportunities. In fact, 2022 showed 62% of professionals considering a job change.

To say that finding strong, qualified candidates and holding on to them is a challenge would be an understatement. But here’s the good news—it’s not impossible. It’s just a matter of changing your approach, putting your marketing skills to good use, and offering value to your team.

Let’s start with recruiting…

5 Tips to Find Qualified Candidates for Your Agency

As marketers, we’re always looking for ways to level up and do better for our clients. And the same should apply to the recruitment process. If you’re having a hard time sourcing and inviting top talent to work for your agency, you need to make some improvements. 

With that said, here are five tips you can use to find qualified candidates:

Create True Job Descriptions

A job description is just that—a description of a job. Yet, most marketing agencies (and businesses in general) get this wrong. If you’re trying to build a solid digital marketing team, you probably have a lengthy list of requirements for the ideal candidate.

But that’s not explaining the job, is it?

Jason Weseman, Certified Business Coach at FocalPoint Consulting, put it best during a workshop hosted by Viral Solutions: “A job description should define the work that needs to be performed, not the skills needed to do the work.” 

To explain why this is so important, Weseman went on to say, “You can find people that meet your exact description—your requirements, your skills, your experience—that couldn’t do the work.”

Plus, if you’re strict with your criteria, you could miss on great talent. For example, research has shown that women only apply to jobs if they’re 100% qualified. 

So, focus on outlining what the job entails rather than what characteristics you’re looking for in a candidate. 

Brand the Job, Not Your Agency

As marketers, we’re no strangers to branding. And we all know how vital employer branding is. But a common mistake agencies make when trying to find suitable candidates is not branding a job. 

According to Weseman, “Top talent already knows about their competition. They know about other companies in their space… What they need to be sold on is the job itself.”

So, in each job description you write, focus on answering the following questions:

• What can they do? 
• What can they become?
• What does success look like?
• What does the future hold?

Brand the job by explaining how it will benefit them and make life better. Use storytelling to take them on a journey!

Spread the Word Wide

When you have written your job description and are ready to look for candidates, spread the word wide. Go beyond popular platforms such as LinkedIn, Monster, Glassdoor, and Indeed. Consider posting the position on marketing-specific sites like MarketingHire, the American Marketing Association, and Digital Agency Network. 

And don’t forget about the other resources you have available! You can post about the job on your social media channels and encourage current employees to refer qualified candidates they may know.  

Don’t Ignore the Passive Market

To find qualified candidates to join your team, Weseman also recommends looking at the passive market. 

What does that mean?

It means considering those who aren’t actively searching for a new job. 

This gives you a wider pool of potential candidates. More importantly, it gives you a wider pool of top talent, as they likely have the knowledge, skills, and attitude you’re looking for. After all, another agency hired them!

The key to convincing someone to change jobs (apart from making sure they see your opening) is to show that a position at your agency can offer more. A career move needs to provide a 30% nonmonetary increase. That includes job growth, job stretch, and job satisfaction. 

By proving that a talented marketing professional can have greater opportunities, a bigger impact, and higher satisfaction with your agency, you can reach more exceptional candidates.

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Rethink Your Interviews

The last tip for finding good candidates is to rethink your interviews. (This is another nugget of wisdom from Weseman.) You’ll have a better chance of filling an open slot with the perfect person if you…

• Ask the right questions. 

“What is your biggest accomplishment?” is the most critical and effective interview question you can ask. It gives insight into what a candidate views as an accomplishment and helps you see if they’d be a good fit. If their answer is irrelevant to the position or doesn’t align with your agency’s goals, they’re probably not the right choice. 

• Wait to make a final decision. 

People come to an interview as the best version of themselves, so first impressions aren’t always reliable. That’s why Weseman recommends waiting 30 minutes. If you love them after three minutes, give them tougher questions for the remaining 27. If you’re unsure after three minutes, give them easier questions for the rest of the interview.  

How to Retain Good Marketing Talent After Hiring

Finding qualified candidates is one thing, but retaining them is another. And it’s arguably more important! When a team member leaves, you miss out on everything they bring to the table. Plus, it can cost you—big time. Replacing a salaried employee costs an average of 6-9 months’ salary. 

So, what can you do to retain good marketing talent once you’ve brought them on board?

• Offer training opportunities.

Great team members strive to learn and grow in their careers. That’s why you should offer training opportunities to enhance their knowledge and skills. Ask what they want to do better or take a deeper dive into. Then, source appropriate training for them. 

• Create a healthy company culture.

Fostering a healthy company culture can go a long way in retaining team members long term. It can boost satisfaction and keep employees engaged. So, make sure your culture passes the test by prioritizing wellness, promoting diversity and inclusion, being transparent, and ensuring everyone aligns with the agency’s values. 

• Commit to job advancement.

If you’ve promised a candidate that your agency can provide them with job advancement, commit to it. Give them a chance to move up the ladder once they’ve shown they’re capable. Having the option for vertical career growth will increase the chances they stay on. Plus, it proves you stay true to your word. 

• Reevaluate to stay competitive.

Put in the effort to show your agency is one of the best to work for.

How?

Reevaluate what you offer your team members every so often. In addition to compensation and benefits, look at the perks other agencies provide their teams. Even giving increased flexibility by allowing team members to work from home can be seen as an advantage. 

• Prioritize employee recognition.

Team members need to feel valued, which is why you should make it a point to recognize and reward their hard work. How you do this is up to you. It could be as simple as congratulating someone on a project completed without a hitch or setting up a bonus program for hitting set goals.  

In Summary

If you’re struggling to find qualified candidates to work at your agency and stay on for years, you need to change things up. We tell our clients it’s not about them, and the same goes for us! Show how a particular job can benefit a potential candidate, and don’t forget to deliver on your promises. That way, you can build the strongest team possible and position your agency for success.

The post Unlocking the Secrets to Recruiting and Retaining Top Talent in Your Agency appeared first on DigitalMarketer.