Beware the Top 7 Agency Myths: Part ThreeApr 28, 2016
Myth #6: You Can’t Earn a 25% Operating Profit
People are constantly refuting the idea that it’s possible to earn a 25% operating profit, but the truth is, yes you can. How? (And here comes the big trick.) You simply can’t spend more than 75%! Seriously, I could earn a 25% operating profit if I truly managed to a financial model designed with that in mind. In that case, the bottom line would become the top line and you would live by the 25-50-25 Financial Model (a 25% operating profit; 50% service and administrative expenses, and 25% on sales expenses).
What’s your financial model? At some point, you have to draw a line in the sand and commit to earning a 25% profit. Make it a defining moment.
Myth #7: A Website and Social Media Will Solve All of Our Problems
I can’t believe how many agencies will spend $50,000 on a website and expect the public to knock their doors down. Apparently, their theory is “Build it and they will come.” But after seeing some of these sites, I wonder how much time (if any) the agency owners actually spend on them. Some of the sites are atrocious. What’s worse is the owners are often oblivious to what’s on them. They don’t visit them and don’t realize that their website is their brand, that they need to protect. Instead, they’re using their website for automated practice quoting: “Click Here for a No-Obligation, Free Quote.”
While that may seem like a great way to get leads, those leads are only as good as the follow-up. Usually, agencies respond to automated inquiries either with an automated online reply or a phone call or, in rare cases, both. But more often than not, they do none of the above, which understandably doesn’t sit well with most prospective customers. After all, if they can’t follow up there, I’d hate to see how they service their accounts.
Social media is another arena to approach with caution. Be especially careful about what you and your employees post on Facebook. If you don’t want your customers to see it, don’t post it. For instance, if you’re asking customers to “like” your page, don’t be posting wild and crazy party pictures on it. And speaking of pictures, if you’re part of an online professional networking group such as LinkedIn, make sure that your profile photo looks professional. I’m often invited to connect with other professionals and am frequently surprised by the poor quality and casual, “after-hours” look of some of the photos. Do you really think that a photo of you partying on a boat projects the appropriate professional image?
The Bottom Line
Obviously, myths abound in our business and these are just a handful of the most prevalent. It’s your job to avoid them. Don’t make them the future of your agency. Prove them wrong. Or you can ignore what you’ve just read, continue buying into them and watch what happens. It’s your choice.
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