How To Kill Agency Churn - Tips From Over 100k Agencies
Chase Buckner is the Director of Product Marketing at HighLevel, the all-in-one, white-label sales and marketing platform for agencies used by over 70,000 customers, millions of users, and countless businesses. Chase and his teams have encountered various marketing approaches and continue to observe the creative ways their customers bring to life when engaging with the product and their respective end users.
With each model helping HighLevel's offerings progress, one issue looms large: churn. Chase joined us at our launch event for the Agency Partnerships Book in May 2024. Click here to download your book while you follow through this video blog.
Problem Statement: Cycle of Ineffective Growth or 'Scaling Sideways'
A recent Call Rail report highlights a significant issue in the industry: high churn rates. Released last year, the report sheds light on the challenges agencies face while offering traditional services like SEO and PPC. According to the data, agencies gained an average of 6 to 9 new clients in 2022 but managed to retain only about 44% of them, resulting in churn rates that sometimes exceed 60%. This is a troubling trend.
I can relate to this situation. Between 2013 and 2020, my partner and I built a seven-figure agency called Customer Bloom, and we faced similar challenges. If you run an agency, this scenario might sound familiar: some months bring a surge of new clients, only to see them slip away shortly after. The constant highs and lows can overwhelm you, as though everything is in chaos. Unfortunately, this pattern is common in the industry due to scaling issues, causing many agencies to lose over 60% of their clients each year.
“Based on our data and industry insights, many agencies struggle to retain clients beyond three months and often find it difficult to manage more than a few clients at a time. Instead of scaling efficiently, they tend to scale sideways—acquiring more clients, hiring additional staff to meet demand, then losing clients and being left with excess staff they can’t sustain. This results in a cycle of ineffective growth, known as scaling sideways.”
The Solution: Tackle Growth Problems in Three Steps At Your Agency
Easy automated wins
To ensure quick wins for clients from day one, integrating tools is crucial for showcasing immediate results. Key strategies include implementing text message marketing with an SMS chat widget for high engagement rates and leveraging Google Business Chat for direct customer interactions. The Text Back feature also automates follow-ups for missed calls, converting more interactions into messages. HighLevel's mobile app unifies communication channels, enabling businesses to manage conversations across platforms efficiently. This seamless integration enhances customer engagement and helps businesses boost revenue collection with on-the-go payment capabilities.
I want to discuss Linktree-style pages for social profiles in HighLevel quickly. These pages can turn social profiles into lead-generation tools for our clients. Building them in HighLevel or similar tools is easy, with templates available for quick setup. They provide value by generating leads directly from social profiles. Saving them as snapshots in HighLevel makes deploying them for multiple clients simple, avoiding the need to start from scratch each time. This automated method offers immediate value, starting conversations and lead generation immediately. Adding chat widgets on these pages boosts interaction. Offering these solutions to all clients from the start builds strong relationships and ensures client satisfaction even before SEO or paid campaigns begin. This proactive approach fosters client trust and appreciation through consistent delivery and results.
Automate lead nurture
Automating lead nurturing is crucial for maintaining fast responses and improving conversion rates. By implementing automation in workflows, businesses can send emails and texts, and make calls promptly within a critical five-minute window. This approach contrasts with traditional methods of merely informing clients about new leads. Combined with AI, automation enhances customer interactions by engaging leads through various channels like text messages and social media, converting chats into appointments. This efficient system reduces agency churn and transforms lead nurturing into meaningful engagements.
We have now covered the initial two steps in reducing agency churn.
Sell in a Saas model
The third point is about recognising the importance of incorporating Software as a Service (SaaS) into agency business models to reduce client churn and enhance revenue. Leveraging white-labelled SaaS solutions, like HighLevel, to create a separate software branch, allowing clients to transition to a software plan if they scale back on services. This approach fosters long-term client relationships by retaining clients through software offerings valued for their outcomes rather than the specific software itself. The significant success of HighLevel's white-labelling services is showcased by the rapid growth in revenue for their Agency partners.
Conclusion
In summary, effectively reducing churn for your agency involves implementing three key strategies.
Firstly, focus on automated wins that can be deployed from day one to deliver results swiftly.
Secondly, automate lead nurturing by going beyond generic emails to engage clients meaningfully, preventing potential losses.
Lastly, consider offering your automated solutions as a separate SaaS product, enhancing client retention and maintaining steady revenue.
By leveraging the appeal of software, you can ensure clients consistently return for your services, safeguarding your agency's longevity.
