How do you usually think about growing your SEO agency?
A common way of doing things, at the beginning of founding an SEO agency, may look like this:
The founder has lots of energy and shares her SEO expertise with the first clients to come. They are satisfied with her performance and trust the value of their SEO campaigns. As they start referring the agency to their networks, growth happens organically. For a while, the only way is up.
Until one day, when the internal landscape of her SEO agency starts shifting. The client portfolio diversifies, so the founder has to tackle both client management, and hiring and managing a team to deliver, at least, the same SEO performance, if not better. There’s also business development to consider.
This is the moment when clients start leaving.
Maybe they don’t have enough resources anymore, maybe they’re not convinced about their SEO results, or maybe they’re not that suited for the agency’s SEO efforts, to begin with.
For instance, a startup trying to validate their business idea or market segments: they won’t have the necessary time or budget to invest in long-term SEO strategies and get the real value of such efforts.
There are various motives for a client leaving, some of which are in our founder’s control and some which are not.
But, one burning question remains:
What happens when good clients decide to leave for a competitor?
As the business becomes more sophisticated, the challenge of growing the SEO agency translates into staying on top of two major components, among other things:
The client acquisition process.
The client retention process.
If the client acquisition process cannot be scaled in a fast way – because you need to have your best consultants doing the SEO proposals followed by the pitch, and they have limited time in a day – you can decide to focus on your client retention and improve that to unlock your agency growth.
Furthermore, when we consider the type of growth that happens for a subscription-based business model, improving client retention can also mean lower costs of re-acquisition and maintenance, and even overcoming the plateau effect, which an agency may reach at certain steps of its development.
Over time, improving the retention rate translates to efficiency in terms of resources invested and revenue per month, along with a higher cash flow predictability, as higher retention (compound revenue) can outgrow a higher acquisition rate.
But, you probably know the already old business adage: you can’t control what you don’t measure.
It’s like driving a car with a broken speedometer. You have no idea how fast you’re driving as you enter a speed limit section. You may feel like you’re in the right parameters or, perhaps, you’ll lose your driver’s license.
Both scenarios are possible, and you have no objective way of knowing.
So, the first order of business you can tackle: measuring client retention.
You may start thinking about the agency’s churn rate, meaning the percentage of clients leaving in any given month and how to go about optimizing that percentage.
After all, what’s behind the churn rate is a whole ecosystem that you need to keep track of, ideally in one place: client profile, SEO performance trend, client engagement, and communications, goals or transactions, etc.