TL;DR

• We reviewed all our Growth Review engagements over the last 10+ years to identify the most common issues.
• Focus and agency complexity were common issues that have gotten worse recently.
• Cheap AI builds can make focus and complexity worse by creating expensive distractions.
• Vision and alignment were the most common, as very few teams could consistently articulate what they're building.
• Positioning, a critical area for agency growth, was another area where gaps were common.
• Finally, new client onboarding is a relatively easy component to fix, but few shops have taken the time to do it properly.
• If you're unsure of what to fix first at your agency, our Growth Review can help you prioritize. Book an intro call to see if it's a fit for your agency.

Agency Growth Blockers

We’ve helped digital agency leaders assess and fix their growth issues for over a decade, and last week I went back through all of them.

When we do a Growth Review, we rank agency revgen components by how far off they are from ideal and how much each component impacts overall growth.

This has to be done with care, as a component’s importance can change based on the type and size of agency. But I wanted to confirm my instincts about the most common and most important blockers, so I did some digging.

Focus and Complexity

Agency leaders have always had side projects, but AI has made shiny object syndrome substantially worse.

All of a sudden, it’s 10x cheaper to build, so over the last year, agencies have been pumping out plugins, tool replacements, and productized services so much that they now operate more like SaaS companies than professional services firms.

Each of those projects comes with organizational responsibilities and costs that continue long after shipping V1. Most agencies are well aware of this and treat it as a maintenance retainer just for themselves. A commercial product, though, will add marketing, sales, and customer support. Those responsibilities have to exist somewhere within the organization, and they aren’t activities that agencies typically provide.

Most leaders are already stretched too thin. If the owner takes on a new product, the commitment takes time away from helping the team or growing the agency. The same goes for a senior dev maintaining an internal tool. That work might be worthwhile, but there’s an opportunity cost that includes whatever those employees could be doing instead. Multiply that across several projects and the cheap AI builds start making expensive demands on the agency.

The thing is, a few well-composed, strategically important initiatives will beat the hell out of 10 half-baked, sorta-launched, strategically nice-to-have products.

I’ve written a lot about reducing organizational complexity, and adding AI seems to have increased it while giving agencies that have over-indexed on it a new token addiction. Whatever efficiencies they gained, they immediately filled with new projects.

While this isn’t the most common issue, it comes up often enough, and it’s incredibly detrimental to agency growth when left unchecked. Because of this, it earns the top spot.

Fixing a focus issue isn’t always simple, but choosing what deserves the team’s attention becomes much easier when there’s a well-defined vision and everyone’s aligned.

Vision & Alignment

These are easily the most common issues we run into. Most challenges stem from a poorly defined vision for the agency, but alignment issues are right up there.

A poorly defined vision isn’t simple to fix, but it’s not impossible. The best ones we’ve seen stem from a deep understanding of the market and/or tech that lets leaders explain exactly what they’re building and why that version of an agency makes sense for them. It’s a personal exercise that tends to stall when owners/leaders are faced with the questions, “What do I really want?” “How do I want to spend my time?” and “Do the economics make sense w.r.t. the industry and markets we’ll operate in?”

In-line with the vision is a description of the type of organization that you’re building that’ll get you there. The “vehicle.” Certain vehicles suit certain journeys. If the journey to your vision requires a scalable entity and an eight-figure exit, then absolutely DON’T build an agency. Build a SaaS company. If your vision is to remove yourself from a sales role, consider a factory-style agency. If you want to work with leading brands to solve their toughest challenges, then consider a consultancy-style agency.

Once the vision is settled, it must be communicated.

This isn’t as common as a missing vision (or a poorly defined one), but when a good vision exists, it’s absolutely critical that the entire team can clearly articulate it. This is a spot where pulling in the same general direction isn’t enough. Everyone needs to understand what they’re building, their role in it, and what success looks like. I think the issue is that people forget things pretty quickly. It’s easy for leaders to remember the vision because they’re thinking about it 24/7. But when you’re heads-down building proposals, drafting new blog content, or working on refining your outreach, and you only hear about the vision at quarterly meetings, it’s easy to let it slip.

You can also imagine a team that understands the vision but has every incentive to work against it. Leadership wants fewer, larger consultancy engagements, while sales gets rewarded for closing lots of small production projects and the owner keeps approving exceptions. Repeating the vision would leave those incentives intact. Looking at what the agency actually pursues and accepts gives us a way to examine whether the direction is carrying through into the work. Those choices become especially visible when we evaluate positioning.

Positioning

There’s a lot wrapped up in this one, but the core issues tend to boil down to industry focus and ICPs. Most agencies we’ve worked with have some semblance of industry focus, but they’re usually pretty broad. Even when they’re narrow, many are missing the key ICP features that actually matter. Things like who the buying committee consists of, their personal and professional pain points, goals, and constraints, where they seek new information, and the type of content they like to consume.

This area is critical to an agency’s growth because much of the growth strategy stems from it. It’s simple to answer “where should we invest our marketing dollars?” when you know exactly where your target audience hangs out.

Knowing where to find those buyers also gives you a place to learn what makes them act. Imagine a software company that has acquired two competitors and needs to bring three brands and websites together before a major launch. That situation tells you much more than the buyer’s industry and job title alone: there’s a reason to act, a deadline, and someone responsible for the result.

Understanding what happens if the work slips, what the buyer has already tried, and what would make them trust your agency helps shape the offer and the proof you put in front of them. You can look for those details in recent wins and stalled opportunities, then fill the gaps through buyer conversations. Once that context helps you win the work, it needs to reach the people who’ll manage the relationship.

New Client Onboarding

It can be jarring for a new client team to spend 3-9 months with a sales team and leaders, only to be handed off to an account manager who receives a tiny, poorly filled-out Google Doc. It’s even worse when the AM’s response time is noticeably slower than sales’. It surprised me how common this was since it takes less than a week to fix, but it always seems to be too low of a priority to fix.

As far as importance goes, this one’s not so important at Studio (<10 FTEs) or Small (10-24 FTEs) agencies, but it’s definitely an issue at Medium (25-49 FTEs) and Large (50+ FTEs) agencies. This is due to when the distinct AM function develops within an agency. Most don’t have a full-time dedicated AM until somewhere around 15-20 FTEs. So when the handoff happens at smaller shops, many of the same people are still in the room. At larger shops, it can be a completely new group of people.

That “less than a week to fix” may sound surprising, but simple documentation and a process that brings the AM in earlier is all it really takes. Be careful using AI here. AI loves to rank every finding as equally important and will often misrepresent things. Be sure to review summaries with the people who were actually in the room to ensure that what was important was actually communicated and that AMs aren’t thinking a side comment is just as important as a critical deliverable.

Improving Agency Growth

The fixes for a lot of these are pretty simple, but they take time and honest communication. Oftentimes, sales, marketing, and AM will have different explanations for gaps, or there are several things that need attention, and you’re unsure where to start. That’s the kind of question we work through in a Growth Review. We combine separate leader interviews, a review of the agency’s strategy materials, and comparisons with similar shops to produce a gap analysis report and a prioritized action plan. The aim is to give the team a shared basis for deciding where to spend its time and resources.

We’d love to help a few more agency leaders identify and fix their growth blockers.

LMK if you’d like to learn more about our Digital Agency Growth Reviews, or feel free to check out the service details first.

They take 2-3 weeks to complete, and we’ve seen them fully realign and reenergize leadership teams.

This is the perfect time of year to do these.

On the intro call, we’ll chat through where growth feels stuck and whether a Growth Review makes sense for your agency. Book a Growth Review intro call.