Scaling & Growth Tips Digital Agencies Can Learn From Netflix, Twitter, and Other Startups
It’s grow or die, and so how do you grow? I mean, whenever you have a successful outcome, yes that’s great and you can pat yourself on the back, but what that means is you’ve just increased your baseline. Now, it’s not much harder to grow at an impressive rate over that new baseline.
— Yuriy Timen, Head of Growth & Marketing in Grammarly
In the beginning, you usually work with local clients who found you through friends, education initiatives (like courses for entrepreneurs) or knew you from your previous places of work. Maybe, you find them at conferences or niche events or get them from the bigger agency. Maybe, you wrote some good cold emails. Or they found your site.
Anyway, at some point, you feel it’s time to change something: to get better money, to do less work, to get more interesting projects, or maybe to start working with enterprise clients.
It’s time to grow.
Growth is about growing revenue by adding resources. So if you, for instance, land a new client — let it be a pizzeria in the need for proper branding — you spend time on researching potential audience, competitors, niches to differentiate from them, discover best ways to communicate with an audience… To do all these and to get revenue from a client, you need time, money, and people. So your revenue grows, but your spendings grow as well.
Scaling, on other hand, is about getting revenue faster than adding resources; or generating more revenue than spendings. Basically, it's when new clients keep coming and if they don't, it’s not a financial catastrophe (because of retained clients).
Put communication in the center of your culture. Create processes that support it (Netflix)
Build a culture that stands on things that help you better work together
Culture is about beliefs and behaviors, accepted in business, and the businesses are ruled by them. It’s not coffee and snacks and great office. It’s about the company’s values. Why is it needed?
- Employees connect their daily tasks to high-level objectives;
- There’re principles of communication, collaboration, and shared knowledge that make (if designed in the right way) work more enjoyable, productive, and honest;
- To establish transparency and understanding of processes (how new clients are acquired, how employees are hired, acclimatized, and paid, how people in different roles contribute to the work process.)
Culture is an asset in establishing meaningful communication (feedbacks, critics, How to Approve Your Idea-guides, etc.) within your company, in hiring and in talks with clients.
Netflix, in its document on culture, writes: “The actual company values, as opposed to the nice-sounding values, are shown by those who gets rewarded, promoted, or let go.” In the document, a company describes what types of people they are rewarding, and who, on the opposite, is not welcomed in teams — no brilliant jerks or mean geniuses. Netflix culture is retaining and nourishing high-performative employees and giving them as much freedom as possible, despite the company’s size.
The keys to “Good” processes, according to Netflix, is to simplify recurring routine and establish good and efficient (!) communication, not to bind creativity and prevent mistakes that haven’t occurred yet. Netflix is considered to be a leader in B2C marketing, so I think it’s safe to use that approach to processes to nail it. Here are some examples of ok and not ok processes.
Keep teams small and engaged, and workload distributed (Twitter & Stripe)
Scaling business means being able to do a lot of work efficiently and get predictable revenue through retained clients, and scaling a team usually means to get more high-performative people on board fast and efficiently manage them.
Create a structure with interconnected workloads
There are functional and cross-functional types of teams. Functional ones, obviously, is occupied with specific functions, and cross-functional work through different functions and roles towards a "greater good".
A cross-functional formation is more logical for digital agencies because their projects are product- or service-centered, therefore, people with different expertise are needed working on it. Strategist, UX-researcher, designer, and developer usually work separately and subsequently.
In a perfect world, a strategic vision of end-user needs translates into a build, and everyone’s happy. In a perfect world, researchers can ask the right questions from the potential audience and get some actionable ideas from market insights.
But while that model employs strategy and is more or less customer-oriented, there’s no initial vision left in the end. The roles are separated, siloed, and have their own deliverables, and, as Chris Scull writes in his article, and that’s not how great products are built. He proposes a new model: Digital agency 3.0. We use something like that ourselves, and, despite the fact we’re not a DA, we see that this model covers project-based processes rather well.
A concept of a new type of digital agency by Chris Scull from Precedent
What’s good about this model?
- Communication during all phases of project development
- Workloads are overlapped
- Different functions are aligned towards the common goal
- Overlapping means tight collaboration and flexibility: if something will need correction (and something, most likely, will), fixes will be uploaded fast. If something changes in the market — or in customer’s behavior — it’ll be easy to update strategy and design.
Such structure and workload distribution allow you to add flexibility and enhance collaboration. Keep teams small — you don’t want your managers (or yourself) to try managing ten different characters. Make sure each team understands an audience of a client you work for, and team members associate themselves with your values and know their own roles. That model also saves you time spent on one project.
Chris Fry, SVP in Twitter (which survived a lot of great catastrophes) says that the only way to survive transformational processes from prematurity to growth in businesses is to build strong units — stable teams, “high-performing squads of people who have good chemistry, who can get things done.” With time, these units will develop trust and transparent healthy communication, learn from each other and achieve great results.
Fry also votes for cross-functional teams that are modular. They can transfer their knowledge and processes freely, because their members, themselves, have a broad skill-set. (For instance, hard engineering skills and understanding of marketing — that's a good trait for employees in the digital agency.)
Invest in good experience within hiring & onboarding
Usually, people hire people they like. Note, that people you like aren’t aligned with your strategy (they’re mean geniuses, for instance), it’s better not to hire them and keep healthy communication in teams.
Few generic things about hiring
- No matter which clients you're working with — B2B or B2C companies — you have to be the biggest end-client advocate. So people you hire have to understand that everything that happens to a brand happens to its customer.
- Hire applicants with a problem-solving mindset. Check out the approach of consultancy companies, their “hypothesis & solve” questions.
- Create great recruiting/onboarding experience. The general rule is: you care about your employees = they care about your clients and do a great job. Stripe, for instance, uses a quick survey to know about interview experience even if an applicant didn’t start working there.
- Stripe also created an onboarding program that connects new hires across all companies. It occurred to be a great tool to share Stripe's vision, get newcomers familiar with its product, meet new people, quickly get into collaboration with other departments and.. be happy with it. Thus, scaling.
- Connect hiring to your clients: if you acquired a customer from the Healthcare industry, it’s better to get on board a person who worked in Healthcare, especially if engineering is needed. If your returned client wants you to create an email-campaign for his new product, hire a person who specializes in these channels.
- Always check referrals and broad statements.
Quick tips for functions
Hiring people for strategy & marketing & sales
- Look for in-depth knowledge and understanding of marketing processes, not just for results.
- Leads aren’t the measure of success, as you well know.
- Good launch doesn't equal good brand growth.
- Check if they can convert customers pains into marketing ideas.
- Check if they can convert customers pain into emotions customers are seeking.
- See how the last two correlate.
- There are no full-stack marketers. The industry is too broad to be able to do everything really good.
- If these people will work with clients directly, rigorously check for soft skills: start telling something extremely dumb and see their reaction; scroll McKinsey while they’re talking about their experience; etc.
Hiring people for tech
- Look for inconsistencies in the flows of their websites and apps. Are there many things that are easy to misuse or misinterpret? Engage UX researchers to help you.
- Ask what pains of an end-user they solved with solutions in their portfolio.
- Juniors can solve issues if you help them with what to do and how.
- Middle developers can solve issues if you give them what to do and ideas of how. They say they can do anything, but don’t understand some of the business requirements due to lack of working experience. So they can’t say “no, we shouldn’t do that yet [because the client doesn’t really need it]”
- Senior developers can do anything and solve any issue if given enough time. Even with unknown technology.
- Tech talents are what makes you greatest agencies in the market this year (at least, according to IBM). Make sure to hire engineers who are really capable of gaining that competitive advantage for you. So don’t interview developers without an expert by your side.
- If you plan to collect data and be awesome in data analytics, hire a data scientist. Don't forget that data should be actionable — otherwise, it's useless.
Hiring designers & copywriters
- Ask what’s more important, creativity or research? There’s usually a lot of talk behind this question, you can gain some insights into how they’re going to work from it.
- Check the designers’ portfolio. Ask what message is conveyed through the design of a landing. Why things are where they are. How it connects to user behaviour. Engage UX-researcher again.
- Ask copywriter about their articles. Who’re they written for?
- Give them examples of your design/article. Ask for feedback. There’s very little chance of you being perfect if you’re interviewing a good specialist.
- Let them choose their test task by themselves and then ask them to analyze it from the marketing point of view: its audience, their needs, readability, UX, all that.
Measure and use these numbers.
So, KPIs (Key Performance Indicators). They are often seen as a tool of unnecessary control for creative people, but it’s not that. KPIs in digital agencies allow its employee to control their work, to see their mistakes and to fix them. Control makes them feel empowered, and if they feel empowered they’re willing to do better and to make better work. Also, engineers love clear objectives, so you'll probably have to think about how to make their KPIs aligned with data that is relevant for your clients.
Internal CACs and CLV, are also extremely valuable: they’ll help you track and improve your understanding of your spending and your clients; will be a source of insights to improve your inbound strategy.
Also, if something can be automated, automate it.
Build growth marketing through clarity and experiments (Grammarly)
Usually, when digital agencies see that a business wants promotions without positioning and a niche, they scream murder (soundlessly, internally.) A sad truth behind it is that newborn agencies often don’t have time to do positioning themselves. No time to differentiate themselves from competitors. They’re just occupied with clients’ tasks and challenges and processes.
To scale, know your customer (Thanks, Captain)
So, the most obvious rec. Don’t forget about marketing. Get to know your clients — get to know them more. They’re telling you about their pain with agencies. You just have to hear it.
For instance, major the pain points for digital agencies right now are that their audience slowly shifts towards consultants — and enterprises start employing digital marketing departments in-house. Why? Because of the low level of control, transparency, trust? Because consultants offer more strategy? Because in-house teams are more accessible? Assess their pain points and establish clarity in your communication with your audience. Why you? What’s so special about your agency?
Head of Enterprise Sales in Grammarly, Igor Karpets, says that the great secret to conviction is “in detecting different pain points for different verticals”. And that basically sums it up — and works for every business. There’s no need to create a pop-up that occurs three seconds after page loading. No need to invent tricks to get a visitor’s email. Just — find time to know your customer.
Speak in a language your clients understand (Thanks, Captain (2))
Not everyone knows what is CPC, cross-platform development, BPA, and even positioning. Not everyone knows about the necessity of customer personas and usability testing.
Make your language accessible and understandable. Something people can connect to. You know your industry well, but the idea is to get your clients to understand your industry, so you have to employ their language.
Give your copy on a review to people who have no idea what’s marketing/development/design is — and see what happens. You’ll be surprised. Things that are obvious to you are usually not so obvious for other people, it’s a curse of knowledge.
Try telling your story in a niche
Margins of niche businesses are usually higher than margins in generalists. That works for digital agencies as well: there’s rather a lot of these nowadays, and people can easily switch between them. The attention economy transforms into emotions economy: we’re blind to ads if they don’t tickle us.
It’s easier to tickle people in a niche and start expanding from it. By the way, it’s never too late to pick a niche. It’s good even if you already have different projects from different industries.
Retain by learning more and acting on what you’ve learned
US businesses lose about $136 billion a year because the customers leave them. So if you want to keep sustainable growth — to scale it — you have to nurture clients you already have, track and fix mistakes that are occurring in the middle of a project.
Retaining clients is cheaper than acquiring new ones. Retained clients are your ticket to growth. Produce content that’s valuable to them. Collaborate with them. Make friends with them — but not kind of a friend who's constantly late or who jokes like a 12-year old. Be honest. Do more than you offer.
Employ data-based use-cases
Keep track of your marketing services for every client’s case and make your case studies continuous, updated every three or six months. Clearly articulate, what challenges you’ve solved, both tactical and strategic. Articulate, what challenges were solved by each department.
For instance, if we’re talking Facebook, it’ll be: a targeted campaign for brand A gains 100 viewers to a brand explanatory video, 80 of them subscribe to A’s blog, 75 of them stay after three months in the blog’s subscription list, 50 of them decide to start free trial with a product A, 30 of them paid for monthly subscription, etc. Then, elaborate on that data = what does it mean for your client? And add testimonials.
In such a way, you’ll show your audience that you a) can achieve clearly-defined goals in short-term perspective, b) keep track of your client’s success in long-term, c) trustworthy enough for clients to share data with you.
Data proves you’re great. So you need to be a king (or queen) of data.
Scaling requires time, reinvesting, and experiments
“I think it’s pretty common for any head of marketing, head of growth who’s laughing that function to grow the function in that fashion. It’s pretty typical that you go in as an individual contributor, you try to gain traction in a given channel, prove out, validate the hypothesis that this is big enough for you to hire somebody into that role and then do that. But eventually hopefully you build a really strong bench of performance marketers where you’re not the only one who’s validating new areas where you have to make hires,” says Yuriy Timen, Head of Growth & Marketing in Grammarly. That’s essentially what you or your assistants/C-board have to do while growing.
Time-management, reinvesting, and experiments require tracking and discipline. Reinvesting would mean you won’t buy this cool equipment because you’ll have to travel to the nearby state to meet your client; or to hire UX specialist; or to run A/B tests for your site — and, after discovering that people don’t go where they should — completely change the design. It’s talking to clients, to their customers. To read updates on the clients’ industry. To spend money on new technologies, services, and tools — sometimes, just to try them and show them to your customers.
It’s challenging. But, eventually, it’s worth it.Go Up
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