As we discussed in our post explaining the three foundations of successful digital agencies, one of the first components that any agency will need to focus on is their business strategy. Before you can actually start formulating your offerings, selling those services, and fulfilling on them, you’ll need to decide who your company is, how to brand your agency, and more. These decisions will have trickle-down effects into your sales & marketing efforts as well as your operations, so it’s important to answer these questions early and stick to your strategy as your agency grows.

This week’s Agency Playbook post will focus on a key factor of your business strategy: differentiation. Differentiating yourself in a cluttered market plays a key role not only in your overall business strategy, but also in your agency’s marketing efforts as well (as noted in the venn diagram below).

We’ve discussed in previous posts that the sheer number of digital agencies is staggering, with some estimates ranging from hundreds of thousands to potentially millions of agencies across the globe. In local U.S. markets there can often be multiple agencies within only a few miles of each other. The UpCity Top Local Agency Marketplace ranks close to 50 reputable digital marketing agencies in Chicago alone (and that number expands even more if you start take into account web design firms, social media agencies, and the vast array of specialized companies).

This becomes even more problematic when you consider the number of newcomers to the digital marketing industry that brand themselves as “experts” or “all-in-one shops”. The availability of drag and drop website builders, thousands of SEO tutorials and videos across the web, and other free resources has only increased the amount of new agencies appearing in the space. Unfortunately, this has led to a large number of business owners choosing these low-cost, low-expertise agencies over the real experts in the field.

In speaking with our community of reputable agency partners about their approach to differentiating themselves in today’s saturated market, we noticed remarkable similarities. The most successful agencies follow similar strategies and trends, so we’ve compiled some of the best responses we received so you can learn first-hand from some of the best minds in the industry.

There isn’t a one-size-fits-all approach to differentiation. Every agency is different, with unique strengths and weaknesses. A solid approach to differentiation is clear and concise. You should be able to confidently describe your approach in a few sentences; if you can’t, then you still have more work to do.

The amount of specialization in the digital marketing space has increased dramatically over the last decade. There are specialists in SEO, PPC, social media marketing, web design, conversation rate optimization, email marketing, marketing automation, and a slew of other disciplines. With each new technological advancement, even more niche specialities spring up. What’s more, within each of those disciplines there are agencies that focus on specific verticals, since different types of businesses need to leverage each of these channels differently.

Your agency can’t do everything at once, nor can you service all types of clients with equal expertise. For this reason, it’s important to define not only the specific types of services that your agency will provide, but also to define your target market.

Your agency should have a clearly defined persona for the types of clients that you’ll take on. Some clients simply won’t be a good fit for your agency. There’s nothing wrong with turning away one potential client if you feel that the relationship just isn’t right. The fact of the matter is that there’s no shortage of companies in need of digital marketing. You just have to find the right ones!

Are you going to target small business owners or are you going to target larger, more established companies? Are you going after clients with little knowledge of or experience with digital marketing or are you going after companies with clearly defined digital marketing objectives? Do you want a collaborative relationship with the client or do you want a more hands-off client who will let you take the reins? You should define your target personas and tailor your branding and your offerings to those potential clients.

Some of the most successful agencies have refined their target market to specific verticals. While this strategy may limit the amount of potential clients you can take on to some extent, it offers a number of advantages that outweigh the downsides. With a specific vertical in mind, you can more precisely tailor your offerings to provide specific benefits to that type of business. Further, when it comes to finding new talent to add to your team, you can fine-tune your search to bring on qualified individuals with experience in that field. This allows you to build a highly-focused offering that is supported by an experienced team, both of which will go a long way when it comes time to pitch potential clients.

Every agency is unique in its own way. Some agencies base their reputation on the expertise of their team. Other agencies base their reputation on the value that they’ve provided to previous customers. Others base their reputation on their company culture. Be clear about how your agency is special and communicate that to your customers in every way possible, from your website and branding to your behavior in client meetings to the reports you deliver. A company with a clear vision and identity will always stand out from the crowd.

Creating a strong web-based value proposition on your website is one of the best ways to differentiate your agency. Your website should quickly and effectively articulate who you are, the services that you offer, and how you differentiate yourself from the competition. To get all these items across to website visitors in a short period of time (a few seconds), use high level messaging vs. dense text and make sure images and messaging are in sync.

Company culture can be a key differentiating factor that sets you apart from your competitors. Make sure that you communicate your culture clearly in all your branding and communications. One of the hardest parts of forging a successful new client relationship is establishing a level of comfortability and trust. When your clients know that they’re working with like-minded individuals who share the same values, it sets the stage for success.

It’s one thing to tell potential clients about the value you can provide, but it’s even better if you can reliably demonstrate it with case studies and examples of your previous work. Showcasing your past triumphs not only puts the focus on the tangible value that you can provide a potential client, it also shows that you’re confident in your ability to replicate that success.

Whereas in the past business relationships relied on strong face-to-face, person-to-person interactions, nowadays technology has made things much more impersonal. Email, group messaging apps like Slack, phone calls, and text messages have allowed for companies to expand their client base beyond just their local area; however, that doesn’t mean that relationship building shouldn’t be a key aspect of your differentiation strategy. Potential clients should understand that your agency is there to support their business, not just to take their money. When it comes time for them to make a decision about which agency to work with, the agencies that come off the most personable will always beat out those who seem overly data-driven or profit-focused.

Your clients should feel comfortable coming to you with questions or concerns about their digital marketing campaign. Too many agencies position themselves as experts and often fluster their clients with an array of data and terminology that can be overwhelming. By positioning yourself as a partner that will work with them, not simply a contractor who will work for them, you will stand out from the crowd in a market that’s filled with jargon and numbers.

We expressed the importance of client education in our post on overcoming common barriers in the pitch process and the same holds true for differentiating your agency. Provide real value in the form of blogs, videos, podcasts, and other informational materials so that potential clients can learn more about the work that you do. This not only shows your expertise, it also positions your agency as an educational partner who is here to help clients better understand the value you provide.

This is where we start to see some overlap between your business strategy and your sales strategy. Your offerings should be unique and should be tailored to the type of clientele you serve and your agency’s specific expertise. You don’t want to pitch a cookie cutter offering that your client can get from any other agency, so get creative! This may mean being flexible with your minimum contract lengths, adjusting your prices to stand out from your competitors, or simply pitching your services in a different light.

When it comes to defining the terms of your client contracts, a key differentiating factor can be the minimum commitment you expect or your cancellation policy. Most agencies these days operate on minimum 6 month contracts since most types of digital marketing (especially SEO) won’t achieve instantaneous results. If you’re confident in your agency’s ability to deliver results, then month-to-month contracts can help set you apart from your competition.

Too many agencies today focus on key performance indicators and define success by whether or not certain numerical goals are achieved. We don’t mean to downplay the importance of defining KPIs, but in most cases, potential clients are more interested in what you can do for them, not just that you can get them to page one. This goes back to ensuring that you communicate your unique value and showcasing your past successes. Set yourself apart by letting your work speak for itself. Focus on value, not numbers.

Last but not least, it’s important to practice what you preach. If the value you hope to provide clients is that you will help them stand out as industry experts, then you should ensure that your agency’s brand reflects that as well. If your agency specializes in creative web design, then your site should be interesting and innovative. Your branding and the strategies you advocate for clients should align.

We walk the walk for what we talk and preach about. Our content plan consists of bi-weekly podcasts with top marketing industry experts and we take these and turn them into blog posts for our site as well as contribute to a few high authority sites. We strongly believe in differentiating yourself as a company by being helpful and educational so we apply this practice to ourselves.

Each of the agencies we’ve quoted in this post have successfully differentiated themselves from their competition by following these basic principles. It’s important to note that these are only a handful of the many ways in which your agency can stand out from the crowd. Don’t be afraid to experiment and find new avenues for differentiation.