TL;DR

• NEW: The State of Digital Services Survey is now live! Share your insights and get the results.​
• We chat about efficiency, margins, and agency valuations with Productive in the latest episode of Agency Chats.
• New findings from our latest agency growth guide show a 17% boost to average client lifetime revenue for service/industry specialists vs. average.
• Enterprise sales require significantly longer sales cycles and meetings vs. Mid-market or smaller. Plan accordingly if you're trying to move up market.
• Most shops offer retainers and projects, but fast-growing agencies completed more projects and had fewer retainer clients.
• Participants received their copy already, but if you missed the survey, you can get your report here, but use PRNEWSLETTER to get a discount for being a newsletter subscriber.
• Many agencies are having issues with revgen right now. If you'd like help dialing in your agency's revgen strategy, let's chat revgen reviews. Find out what's holding your agency back and how to fix it in <2 weeks.

New Survey Opportunity!

It’s for this year’s State of Digital Services study in partnership with the Bureau of Digital and Parallax.

Share your insights and get access to the full report and an invitation to the private highlight call.

This is easily our most popular report because it lets agency leaders understand where their shop stands in relation to the industry. This allows them to make more informed decisions and ultimately grow more reliably with better margins.

It covers:

• AI implementation rates
• Average revenue growth rates
• Agency profitability
• Utilization rates
• Hourly rate data
• Pricing models
• Service mix including most profitable services
• Average number of clients and client tenure
• Employee retention strategies
• Key trends shaping the industry
• And more!

Efficiency, Margins & Agency Valuations

Learn how utilization rates, pricing, and salaries impact agency valuations in the latest episode of Agency Chats with Productive.

In this episode, we cover how growth can play a huge role in stabilizing your utilization rates. Specifically, how it’s easier to manage your team’s capacity when more work is coming in at a steady pace.

New Research: How Digital Agencies Grow

It’s here! Our most in-depth report on how digital agencies grow.

Participants received their copy already, but if you missed the survey, you can get yours here, but use PRNEWSLETTER to get a discount for subscribing.

We asked 91 agency leaders which tactics were the most effective, how fast they grew, what size clients they served, and more. This helped us learn some incredibly interesting things about how digital agencies grow like:

The significant boost to lifetime client revenue (17% higher) that comes from specializing by service mix and industry. It's another drumbeat for the now-tired "specialize your agency" message that so many of us agency consultants love to spout. I guess we love it because it really does seem to solve a lot of the most common challenges.

Another key finding from the report was just how much longer the sales cycle is for enterprise clients than everyone else. This is super important to consider when you're thinking about moving up market. That drastic increase in close time can cause major cash flow issues if you try to make the move all at once. Many enterprise clients also push for longer payment terms. Net-90 and net-120 aren't uncommon. So if you're adding another 7 months to your sales cycle, plus another 3-6 before you're paid for the work, make sure you take this into account before shifting your focus toward enterprise clients.

Finally, the research provided some clarity around the ideal retainer-project balance. Most shops offer both retainers and projects, but those that grew the fastest completed more projects and had fewer retainer clients. Your retainer-project mix has a lot to do with how effectively you can grow. Retainers are typically less profitable, which leads to less capital to reinvest in growth initiatives. On the other hand, project revenue is typically less reliable, making forecasting and planning difficult. Agencies need to balance these two to grow reliably.

There’s a lot more in the full report, specifically a deep dive into the effectiveness of 30+ revgen tactics, what the fast-growing firms use, and which tactics are most effective for selling to various client sizes.