As Local’s Complexity Grows, What Does It Take to Build a Sustainable Agency Business?
In this new Street Fight feature, local marketing gurus David Mihm and Mike Blumenthal will semi-regularly kick around some of the biggest ideas affecting the local search ecosystem and the broader industry. Send an email or leave a comment if you have specific topics that you’d like them to touch on in future columns!
David: Enjoyed our chat last time, Mike — so much that I think we should make it a regular thing! I’ll kick things off this week with a question that we touched on briefly: life seems a lot harder today for solo SEO consultants, small agencies, and even bigger agencies than it was when you and I first met in 2006.
Is there any end in sight to the increasing complexity? What would you advise someone who’s just getting into the space today, or who wants to build a sustainable agency business over the next five years?
Mike: Was it really 2006? You must have been one of the first commenters on my blog. 🙂
To answer your question, first they need to understand that they need to engage in real marketing to real people both offline and on. As Wil Reynolds has pointed out, Google has a gazillion brilliant engineers working out how to emulate algorithmically how humans make purchasing decisions, and the basis of that logic is real marketing.
Secondly, given the huge and growing need for very specialized knowledge, I would suggest partnerships both formal and informal with bright people and agencies to help fill in the gaps that you might have.
What about you?
David: From a knowledge standpoint, I couldn’t agree more that the number of niches where you need specialized knowledge to succeed is exploding.
I think there are two paths for consultants or small agencies today — either be a generalist who’s aware of all the major channels, and the kinds of businesses that are good fits for those channels, or develop an incredibly deep focus in a particular channel, and make a name for yourself as the go-to resource within that channel.
Mike: Yes. Understanding where in the value chain you as an agency, consultant, etc. can really offer the most value and become a niche expert in that. And partnering where you are deficient.
David: Exactly. There are a lot of digital agencies here in Portland that are still trying to be the traditional one-stop-shops for medium-sized businesses. If your expertise/secret sauce is in content creation, PR, paid media, etc… do you really need an in-house team of front-end web developers?
From my perspective, you’d be much better served partnering with another solo practitioner or small shop that just does front-end web development, so you can sell what you’re truly great at (and charge a premium for it).
For these kinds of “generalist” agencies, your idea of a confederation of experts with whom you can collaborate — wherever it makes the most sense for a client — is going to serve both your business and the client’s business far more effectively.
And if you’re a solo consultant, being an expert in identifying the right product stacks for the right clients, and tying those stacks together, is a viable business in-and-of-itself. Which wasn’t even an option when we started in this industry.
Mike: Absolutely correct. But will these types of organizations ever be able to achieve the scale that an integrated fully automated marketing platform might? I see these platforms as being able to knock off a full range of low-hanging fruit from well-structured websites to reservations, billing, reviews and much of social with a single inexpensive platform.
Over the next few years they will be able to provide an integrated customer experience from marketing to post sale follow up. How do these more generalized agencies or smaller consulting shops compete with that?
David: I don’t think they should try to compete. I think they should partner. Totally agree that most of the low-hanging fruit that a lot of SEO agencies have been selling over the last 5-6 years (website building, Title Tag optimization, citation building, social posting) is being relatively effectively automated by tools like Squarespace, Yoast, Moz Local/Whitespark/Yext, Buffer/Sprout Social, etc.
Most of these systems require near-full-time monitoring and maintenance, though, at least for businesses who can afford the higher-end options. The consultant’s role then becomes separating the wheat from the chaff, and prioritizing the marketing recommendations these tools make–in a language that the business owner can understand–and in some cases to actually implement those recommendations.
Mike: Right. I think that there is an opportunity to customize and optimize some of these platforms to perform specific tasks that these stacks offer. We have seen consultants with GetFiveStars do that very thing and create huge customer value at 10x what we are charging.
David: Great example.
Another one from personal experience — when I started my business in the late “aughts,” I might have charged $1000/month retainer to a small business for Google Places auditing, citation submission and cleanup, on-page optimization, etc. I would have spent 8-10 hours a month on those efforts, because it just took that frickin’ long to do them.
Now a lot of that work can be automated by software products, but the need to find appropriate toolsets/channels, interpret their reports, and advise the business owner on the best course of action moving forward is increasing.
Mike: And it was so incredibly boring doing that citation work! I got to the point I was ready to blow my brains out. So I hired it out finally.
So going high-end, becoming really expert in one area, partnering with others — that’s a way for smaller shops and even generalized agencies to move forward.
David: And it’s a model that will be even more successful as marketing fragmentation increases — let’s dive into some of that fragmentation with our next conversation!