7 Steps to Starting a Niche Business as a Digital Agency
There are many good reasons to start a digital agency. One of them is the fact that ad spending doesn’t seem to slow down despite the Covid-19 pandemic.
A report commissioned by the Interactive Advertising Bureau and conducted by PwC reveals an interesting fact. Digital ad spending grew 12% year over year in 2020 in the U.S. Creating a digital agency should be well planned though. Launching yet another company that focuses on everything might not be fruitful. Instead, research the market, find a niche, and establish your business.
1. Educate Yourself
Before you jump right into the agency creation process, take some time to understand what these businesses do. Digital agency is a rather broad term, and the biggest issue is that many of them are full-service companies.
Among other services, they offer:
- Web design
- SEO
- PPC
- Email marketing
- Content marketing
- Advertising
The problem is that a new digital agency offering this wide variety of services will have trouble to find clients. The reason is simple: what gives your newly established digital agency the edge over competitors?
You won’t be able to easily answer this question. However, there’s an easy solution: niche down.
2. Narrow Down your Niche
Instead of creating yet another full-service digital agency, try focusing on one specific service. Many business owners are afraid to niche down because they think they might miss out on clients. The truth is that you’ll be able to more easily find the right clients for you, and also be found by them.
How do you find the right niche for you? It depends on a variety of factors. Assuming you are a freelance designer, it’s natural to create a design agency. Take a look at your past projects, and group them into categories.
You should see a pattern that might tell you which services to focus on, for example, social media graphics. To establish yourself as an industry expert, narrow the focus further down. For instance, offer social media graphics design targeted at travel companies.
Anyone who is just starting out won’t have the advantage of having worked with clients already. Your task will be to think about your personal skills, and doing a bit of market research to check if that service is really sought after.
3. Research Competitors
Once you’ve narrowed your niche down, you should take a good look at your potential competitors. Try finding the same keywords they would use, and narrow your list of competitors down to about ten companies.
Ask yourself the following questions:
- How are they monetizing their services?
- Who are their clients?
- How might they generate leads?
- What does their marketing funnel look like?
Once you’ve gathered the data, think of ways to convince prospects that you are a better fit than your competitors. Don’t try to convince them with a lower price, instead, try finding your unique selling point.
4. Productize your Services
Your service is what sets you apart from the crowd. It can be anything from creative content creation to PPC. Having a high-quality, clear offering is very important when you want to develop a successful digital agency.
A good way to stand out is by productizing your services. Make it easy for potential clients to order your content creation by letting them go through an easy check out form. Ideally, you’d also use a client portal software that allows your clients to order your services easily in the future.
There are no limits to productization. However, keep in mind that you should bundle your services in a way that they are attractive for potential clients. On top of that, your productized services should allow you to easily scale your agency. Don’t offer services that create more work than revenue.
5. Launch your Website
If you use a client portal, you could market your services directly to leads. At some point, you’ll want to launch your website though to scale your activities.
Create a simple, clear pricing page that allows prospects to buy your services. Try to stand out from the competition by making your services very clear while not communicating unimportant information. The pricing should make it clear to leads that they really get a good deal.
Once you’ve found a few customers, try upgrading your website with search engine optimized landing pages. You can also launch a blog and kick start your content marketing efforts to attract new leads.
6. Hire the Right People
At some point, you won’t be able to manage your agency alone. Take a look at your current workload, and think about ways to delegate. Can you handle the orders yourself, but need help to organize them? You should hire a virtual assistant in that case to help you manage your business tasks.
Once you start noticing that you’ll run into fulfillment issues, start hiring a person who can help you with the orders. You don’t want to start the hiring process too late because it will put a stop to your growth.
7. Scale your Agency
Hiring new talent is one way to scale your digital agency. Another one is thinking of ways to automate your processes. What are your current pain points, and how can you solve them?
If you are already using an agency management system, you’ve eliminated a lot of the growth pains. However, you might come across things that can be improved. For instance: getting new leads is not an easy process because it takes time and effort. How about outsourcing the lead generation to a trusted agency? This way, you can focus on what you do best.
Final thoughts
Creating a successful digital agency is a without a doubt a daunting task. The good news is that you can reduce the failure rate by niching down early. If you follow the aforementioned steps outlined in this post, you should be able to establish a successful business.