Why Do Customers Buy the Agency’s Services?

In terms of positioning, there are specific patterns to take into account based on customer segmentation and more:

If we think about vertical-focused agencies, then the distinction is upfront: deep expertise in an industry makes them the appropriate choice for those client segments.

If we look at the expertise angle, there are other ways to showcase it – know-how of a technology vendor like Magento or Shopify or by unique proprietary software and algorithms which underline deep tech, data knowledge (e.g., Upswing’s COVID-19 Data Trends or TitanBOT from Titan Growth).

If the approach is the angle, then there is always the full-service digital positioning which implies executing complex projects from start to finish: strategy, creation, social, design, and so on.

Or a mix of services and price: bundles of SEO services sold at a monthly fixed price just like a regular subscription, which gives the client a sense of control.

There’s also the delivery angle which is less used: explaining a manifesto or methodology. It’s more than a differentiator; it’s an explanation of a way of thinking about the SEO agency’s role. Re:signal does this by having a dedicated page for their Think – Plan – Do – Measure method.

How Are the Value Propositions Promoted, Sold & Delivered?

Here’s a building block that is currently under a lot of pressure, as channels are shifting after the pandemic.

Yet, the following conventions in the industry continue to dominate the way agencies reach their clients:

Events & Business Networking

Conferences and industry events were the norm for promotion and meeting potential clients, strengthening relationships, and studying the competition. In time, some agencies took ownership of the process, so they started organizing industry events.

In contrast, others co-hosted such activities with other important stakeholders (brands or publishers). In current times, shifts to online, virtual summits are more likely.

In the lines of practice what you preach, why not showcase your quality work by doing it for you as well? Think about a regional agency targeting keywords like “SEO Chicago” or “SEO Ontario” and presenting the results as proof.

Referrals & Recommendations

Word of mouth remains one of the most powerful channels, mainly if you target a particular vertical. Or if you want to enter a new market segment.

Media Coverage

Not as widely used, but some agencies generate reports and studies that get covered in national media or industry publications.

Free Data-Exploration Tools

Another not-so-frequent channel that acts as a differentiator is using proprietary tools to help potential clients, and present expertise and results.

For instance, Upswing’s Visibility Report is a free tool for brands to evaluate their online visibility based on search performance.

Pay-Per-Lead Aggregators

Digital agency aggregators like Clutch or Upcity, professional associations, and even chambers of commerce can function in terms of acquisition, being specialized and targeted.

Educational Content

Whether general marketing advice on their blog or guest posting, whether podcasts or webinars, agencies have a lot of know-how they use to build trust in their particular offering.

A compelling case is when agency leaders create educational videos or, even further, associate with academia and create digital studies.

How Does the Agency Interact With the Customer Through Their Journey (Acquisition, Operations, Retention)?

Apart from the channels focusing on acquisition and brand development, this question involves client management and retention: how the client relationship looks and what’s particular for an agency.

One crucial aspect from this point of view is having personal account managers and being able to continually check the status of your campaign with a singular point of contact. This is one of the things that makes or breaks contracts.

The other one is reporting: it’s not enough to perform, you need to present results and be transparent about issues. That’s why an interesting pattern in analyzing SEO agencies is looking at the ones that access self-serve reporting platforms to allow full transparency and a semi-automation of the process. It’s a novel way of doing the monthly report, which dictates more trust in the relationship and tools as well.

How Does the Agency Earn Revenue From the Value Proposition?

There’s no one answer to this question, but it’s essential to keep in mind that most agencies function based on monthly recurring revenue or MRR, which usually involves:

Depending on their range of services, they complement it with multiple streams that can imply:

Some of these services are widespread, while others may have surfaced in the last couple of years. For instance, offering training and/or consultancy services is on the rise, going even further to business consulting during the pandemic – advising on new sales channels, new market segments to address, adapting to remote work, finding new target audiences for clients, etc.

Furthermore, some agencies become resellers for tools like HubSpot, which provides a significant portion of the income.

What Uniquely Strategic Things Does the Agency Implement to Deliver Its Proposition?

In terms of activities that secure market positioning, agencies design their services in correlation with their customer segments and their value proposition. After all, SEO means many things nowadays.

Some agencies choose to offer strictly SEO-related services, while others go the full-service route, to capitalize on the various needs a digital marketing project has:

These are the primary services identified, but there are a lot of in-between cases, depending on the agency’s strategic choices. For instance:

What Key Resources Does an Agency Require to Fulfill Its Value Proposition?

The leading resource a business has is human capital.

For agencies, that means an in-house team with specialized roles and, for some, an extended, outsourced team comprised of freelance collaborators – usually, for more content development, graphic design, etc.

Based on their value proposition and size, there can also be data analytics departments involved, web development teams, etc.

Then, there is the digital infrastructure required to execute the agency’s key activities properly. This is a necessary resource, just as familiar as the first one, including both tangible and intangible assets.

Yet, if we go further down the line, something specific for agencies that can create a unique market advantage is the proprietary methodology involved in the way they do their job.

What Can the Company Not Do So It Can Focus on Its Key Activities?

When choosing services, there’s also a lot you have to say no to. As an SEO agency, you can focus on your core mission or, as seen before, explore other complementary services in-house.

But, no matter the case, the key activities need to be balanced with key partnerships.

In our research, we identified the following types of strategic collaborations that agencies choose to enhance their projects:

In the case of Impression, that means opting for a plethora of SEO software providers, while in the case of Found, it means enhancing their CRO services with key partners such as Monetate and Optimizely, for their data analytics efforts.

What Are the Agency’s Major Cost Drivers?

Looking at cost drivers and how they link with revenue is a strategic exercise in itself, as it highlights what elements clients are willing to pay for, where to optimize costs, or what new services can appear.

From the agencies we researched, we evaluated the following points as the main costs:

To complete those, of course, you need to take into account the agency’s profile, as there may be other relevant costs to add (subcontracted project teams, sales/marketing/PR budgets, etc.).

After deep-diving into BMC, it’s probably time to challenge your agency. You can explore further questions and examples, and build your version here, in an interactive piece, that will closely guide you.

What’s next?

The reality is that SEO agencies have versatile profiles which support them in a particular market, but can become limits for other types of development. With each choice made to include or exclude a service / client / niche, this means new gaps to fill.

Think in terms of new customer segments generated by accelerated digital adoption, new channels like Zoom, Slack or virtual pubs to connect and promote, new resources like automation tools for efficient business processes, etc.

We’re ending this series with an overview of How would you build an SEO agency in 2020? based on input from various agencies. We’ll collect it as part of a strategic workshop for SEO business leaders and we’ll challenge the opportunities and risks the current market poses. Be the first to find out when the final piece will be live.

At SEOmonitor, we’re committed to helping SEO agencies navigate uncertainty, so we adapt our solutions to the current context. Search Trends, the Client Health Tracker or the Reporting board are just a part of our specialized tools and resources.

We’ll get through this together!