How to Solve 3 Major PPC Agency Problems
No Time - Free Advice
This comes in two forms. Free Advice to other agencies/freelancers and free advice to prospects.
Let’s tackle agencies/freelancers first. I receive 2-5 requests a week from other agencies/freelancers to help them set up their business. They either want to Skype or call. I’ve never been paid for consulting. Conversations would last 2-5 hours sometimes longer. When I was new, I took every phone call. In exchange for “free” consultation, they promised leads… I’ve never received a lead… in hindsight it’s logical since we offer the same service. The biggest red flag is when they feel entitled to your time. They aren’t. Community building is one thing, but working for free is another. You need to charge for your time and expertise.
Now for prospects. Prospects are not clients. Clients pay. Prospects what free work. Here are 2 recent examples of prospects who took advantage of our time and expertise. A large financial business in Chicago. They flew down to visit us. I picked them up from the airport, paid for meals, and sent them to the airport. They visited 4 times. They promised everything under the sun, but never paid a cent. We set up their AdWords account for free… only to find their credit card didn’t work and we had to pay the remaining balance ($483.50 before we stopped). They called and texted everyday for months. Eventually I blocked their phone number. All and all we lost around $7,500 in time and expenses from helping this prospect. The second one was a large home buyer in Houston. We visited 5 times. It took 90 minutes to drive out there without traffic. Each time we prepared a new proposal and brought relevant team members. We spent over 150 total hours with this prospect.
The solution? If someone doesn’t value your time enough to pay you, they don’t value you. I now politely tell agency/freelancer/prospect “Thanks for reaching out. At this time we are not accepting any new projects. Good luck on your future ventures. Looks like you guys are on the right path.” I copy and paste the above.
Team Issues - No Results
When I started, I thought how cool would it be to have a marketing team of all developers…. It turns out the answer was not… really… Our development team was paid $300,000 base salary with equity options, healthcare, 401K, etc. They had additional monthly expenses in the five figures. They purchase $4,000 laptops, expensive unnecessary software, and were generally out of control. The investors put enough money for a year of software development… but it was all gone after 6 months. I was unable to reign in the developers and the software part of the company had to be severed from the marketing portion. Being well paid, doesn’t mean you work hard. We now have a trial period of 90 days to determine if the person fits our culture. Our contracts start off 1099 and become W-2. This solved that problem.
Onto the marketing side, we had a sales staff of 3. In 6 months they created 0 sales. We now have a sales staff of 0. We invest the sales budget in content creation. There was a lot of drama here that I didn’t want to deal with.
Unprofitable Clients - Changing Scope
This comes in many forms. I want to focus on the client who pays but changes scope. We had an tutoring client who paid $4,500. We charged the card and everything was great. However, the scope of the project changed from a simple wordpress website based on a template to a $15,000 - $20,000 custom… and I mean custom everything. We spent 4 months and over 500 working hours on just the splash page. And that didn’t include the graphic team they chose which we paid out of pocket. They wanted custom plugins in 4 different languages. After the 4 plugin was requested, I sent the client an email saying we would make a full refund $2,600. We spent $1,900 paying for the designers they chose. A total lost of $7,500… at least.
The solution? Identify clients that change scope and cut your losses. You can always ask for more money or do an hourly charge, however that hasn’t worked for me. Offer a full or partial refund and move on. Don’t think about it. It happens. It’s part of marketing life.
I hope this write up helps you avoid some of the things I experienced recently. There’s a lot of positives (to offset all the negatives) for my agency as well. We have been growing our team. And each new member has been great. We are now breakeven and developing a ppc software.
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