When I used to work in-house for a brand, I asked ten of the leading agencies in London to pitch to me. Each 30-50 page slide deck said the same thing: they all claimed, "We're unique, we're data-driven, we're creative," but there was no differentiation.

Sound familiar?

It's a familiar scene in many agency niches.

I believe this stems from a lack of strategy.

As Alex M H Smith's book "No Bullshit Strategy" aptly states, "The whole point of a strategy is that it sends you on a different path from anyone else."

Without a clear strategy, agencies naturally fall into the same patterns. A well-defined strategy anchors your agency and keeps its fate in your hands.

In this post, I will guide you on how to create a strategy for your agency. I will reference the books "No Bullshit Strategy" and "Blue Ocean Strategy"—both of which I recommend you read. I will merge their principles with my experience of running multiple agencies.

I genuinely believe 90%+ of agencies lack any form of true business strategy.

I believe this is down to:

1. the unique nature of how agencies are founded vs a traditional business

2. the nature of the agency business model

I will explain both of these in more detail at the end.

Common pitfalls for agencies

There are 3 major pitfalls I see agencies make when it comes to defining a strategy:

1. Agencies are guilty of saying, "We're going to be the best at <insert service here>," but best is subjective, and that's not a strategy. It gives no direction.

2. Saying our strategy "is to sell the agency within 5 years" again, this isn't a strategy; this is a goal - I've been guilty of this in the past!

3. Finally, referring to a 'plan' as a strategy. Each year, the agency owners give a strategy update to the team with new priorities of what they want to achieve this year. That's not a strategy, that's a plan.

What's the difference between strategy and a plan?

A strategy is the overarching approach and direction for achieving long-term goals, while a plan is the detailed roadmap and specific actions to execute the strategy.

To learn the difference, see this 10-minute HBR video, which will explain it way better than me:

What is strategy?

This is where the issue lies.

Over the years, strategy has been violated by people who don't know what it is; claiming anything high-level and fluffy is a strategy. If you don't understand, then "you aren't strategic enough" (this exact scenario happened to me when I worked at my previous agencies).

The 'official' definition of strategy is "a plan designed to achieve a particular goal." Watch the video above to see why this definition doesn't work and where the confusion lies.

In No Bullshit Strategy, the author Alex adapts this definition to business and defines strategy as:

"The unique value a business provides to the market."

How to define your agency strategy

To make this actionable for agencies, we can break this into two parts: value & the market.

The value i'll be leaning on is the “No Bullshit Strategy” again; for the market, i'll be referencing the "Blue Ocean Strategy".

Defining your agency value

First, you need to outline the value your agency provides to your clients.

This should not be service-related; it needs to be the value your services provide to the client. Treat your services as a tool to facilitate and achieve this value.

For instance, my interior design agency's strategy is to make interior design services accessible to families. Currently, they implement this through virtual online interior design, which keeps the costs low and allows everything to be done without the customer leaving their home (and delivered within a month). The same strategy could also be achieved through different services or products, for example, affordable homeware products designed for families or a private members club where families can share peer-to-peer advice about interior design.

Your agency is not the service it offers; it's the value it provides to your clients.

Here’s some visuals to help

Branding

To reference my interior design agency again, the strategy influences our branding. Branding is a way this message is communicated to the market. We needed to make the site more accessible and friendly, using welcoming language and transparency with pricing to appeal to families. This differentiates from the typical interior design service you see in the market, which is intentionally unwelcoming and only wants to work with higher-end clientele.

Questions to ask yourself & communication

So, to get to your value, ask yourself or your senior leadership team questions like:

• What core benefits do our clients receive from using our services?

• How do our services positively impact our clients' businesses or personal lives?

• What unique outcomes do we deliver that set us apart from competitors?

• How do we make our clients' lives easier, more efficient, or more successful?

• How can we articulate the transformation of our clients' experience due to our services?

You may not need all 5; just one of these may be enough to trigger an answer.

If you are struggling, ask your most trusted clients.

Remember, your value should not reference your service offering and should not include subjective words like 'best' or 'great'.

The reason you want to do this is because your strategy should be set and barely change for years.

The way you operate or your services may change over time but only in line with the strategy.

For example, if you offer paid search as a service today, what will happen in a few years when Google automates this service with AI and clients no longer need your agency to manage it? They will just pay you for one-off audits or strategy work. That'll reduce your pricing, and your agency will shrink. However, having an overarching strategy that doesn't reference paid search opens up your thinking and planning to think broader and still add value to your clients through different service offerings to achieve similar value.

This further emphasises why a good strategy is a long game. You may be completely fine for the next 5 years + with your paid search offering, but eventually, one day, you won't be due to the pace that technology and Google are changing.

Google and Facebook are excellent recent examples of this. The most obvious way they've done it is with parent companies Meta and Alphabet to open up the same value Google and Facebook did but over a much longer timeframe and across a broader range of products and services.

Also, think of this from a team communication perspective. You communicating a broader value-focused strategy now shows there's a longer-term view, there's a plan in place, and they can trust you. However if in 5 years time you do a company update to say we're no longer a paid search company it will come across very erratic, no doubt it would be rushed without a plan in place and your team will naturally lose trust in your leadership and direction.

Defining how your agency competes in the market

When we first set up our agency I could easily define our strategy, why were different and how we competed.. in my head… but if you asked me to articulate this in a team presentation or a word document I would struggle.

This is where the Blue Ocean strategy principles helped.

The general premise is when you enter a market you are up against a varying degree of competitors, many of which are established businesses so it's impossible for you to compete on all fronts with these businesses.

Therefore you have to dictate which factors you deem more valuable and important to your customers and which are not.

These are the differentiating factors that set you apart from the market.

As I mentioned at the start, The whole point of a strategy is that it sends you on a different path from anyone else < this is exactly what you are doing with this exercise.

You are essentially saying, “they think this is important but I don't I think this is more important”.

First you need to do a bit of research around what are the factors that a potential client would look for when using your services eg. creativity, data, service, location, industry knowledge, social presence etc. Any factors your potential clients could score you against when you pitch.

Next, these are the 4 quadrants to look at:

The true sweet spot is in the elimination and the creation factors. What are your competitors doing that you will not do at all?

This frees up your resources and focuses your attention on creating something different in the market.

You can see if you don’t think this way you may just look at all the major players in the market who are 'creative-led' and you naturally think to compete in this market we need creativity as that's what the others have. But they maybe thinking the same thing as you and just copying the market leader, they aren't putting their focus on something new because they don't have a strategy.

If you want to see my agencies' value curves, I share them in my course; https://learn.theagnc.co.uk/

To give insights: Our SEO agency was London's only e-commerce specialist at the time, setting us apart as the market often ignored e-commerce due to lower margins and smaller retainers vs finance, fintech, and b2b brands.

We also established an employee-owned model unique to our industry. Recognising our clients were non-SEOs, we prioritised simplicity in our SEO approach, staff and training. This was a contrast with competitors who either didn't need to simplify or maintained SEO as a complex 'black box'.

Within three years, we grew to 40 employees. Despite being a niche agency, we became larger than most SEO agencies that catered to any market.

This is also a good example of how strategy needs to adapt overtime. Our success led many agencies to mimic our approach, they were attributing our achievements solely to aspects they could replicate, like 'eCom specialist' but missing the overall strategy and approach we had.

However being a copy cat agency means you are always behind as you don't have a clear strategy and way of thinking to anchor your business. Now other agencies have copied us we need to create even more value to further differentiate us and make it harder for them to copy.

Once done you'll end up with something like this which is such a good way to visualise to your staff how you compete in the market vs your key competitors. Particularly for new starters who can easily visualise skills they need to develop working for us vs their previous agency.

Remember, don't overlook your indirect competitors. The Blue Ocean Strategy, for example, suggests that an airline should consider car, train, and boat companies as competitors because these are alternative means of travel. Customers might explore these alternatives before deciding to fly. Therefore, airlines should broaden their marketing to emphasise the benefits of flying as compared to taking a train or other means of transport.

In the field of marketing, social media agencies should consider SEO agencies as indirect competitors. This is because, before deciding to invest in social media, clients would have previously decided where to allocate their budget based on certain needs, such as ROI. At this stage, they might choose to invest more in SEO vs Social.

Bringing this together

To articulate this to staff, as No Bullshit Strategy mentions, don't do a presentation deck. A strategy is something you articulate, you don't present it. Agencies default to presentation decks way too much.

For our strategy write ups I use Notion pages.

Typically, start with the value outlined above.

Then, you'll want to articulate the strategy using the following framework;

What do agencies do right now in the market ….

… why this doesn't work ….

… instead, our agency's belief is …

...and therefore, our agency's solution is this.

Remember, don't use subjective terms like 'best/great'.

Once this is defined (one big paragraph or 3-4 mini paragraphs) you'll next need to outline the phases your agency will go through to achieve success.

For example, an agency just starting out could look like this:

Phase 1: Proof of concept

Is there a business model here? Why haven't people done it before? Is it just a consultancy game with margins being too low to build out a team?

Phase 2: Foundations

Outline the bare essentials of operations; now the proposition has been proven what does the team look like, who is our ideal hire, what is the hierarchy, what are our sales targets, what tech stack are we operating on, what do our contracts look like

Phase 3: Growth

Paragraph about scaling and growth, sales targets, marketing investments needed and expansion plans.

Phase 4: Automation and Efficiency

Increase efficiency and reduce costs through automation

Phase 5: Advanced Client Segmentation and Personalisation

Enhance service delivery and client satisfaction through tailored solutions

You get the idea.

The key to this stage is not to commit to timeframes; remember, that's the planning stage. This is the strategy. It's likely you may be stuck on a certain stage for much longer than you think.

Each year your agency should then outline the plan for the year, this plan should outline the phase you are on eg “last year we planned to complete phase 2 but due to resource restraints we didn't achieve it, therefore this year we aim to finish phase 2 and move to phase 3 to do this we will need to invest X, we will need to hire a new marketing manager in June etc”.

Remember, strategy is long-term, so the phases should intentionally take a long time to achieve. They should also help massively with prioritising issues within your annual business plan. For example, with my SEO agency, we were about to kick off a big innovation project, but once we aligned this to the strategy, we could see we hadn't yet finished the current phase and instead pushed our innovation project back 6 months.

Without this strategy in place, the plan won't be nudging you in a particular direction, you'll be too reactive to the issue that happened last quarter, and you'll likely end up with a huge amount of options, none of them connected, you and your team will be overwhelmed, you'll end up doing a huge amount of work but won't tangibly achieve anything as you won't be moving between the pre-set phases of your agencies strategy.

Strategic Thinking Skillset

When it comes to skillset, if you are an agency owner and struggle with thinking strategically, I'd recommend first reading 'The Six Disciplines of strategic thinking by Michael Watkins' he outlines the following skillsets and disciplines of strategic thinking that can be developed:

• Pattern recognition

• Systems analysis

• Mental agility

• Structured problem solving

• Visioning

• Political savvy

Second, if you are still struggling, book an Agency Alignment call, and i'll be happy to help https://calendly.com/sam-yean/agency-alignment

Why I think Agencies Struggle with Strategy

You should now be able to see the big difference between a plan and a strategy. More importantly, you should also know how intentional strategy is and how important it is to differentiate from competitors in the market.

I truly believe 90%+ of agencies lack any form of true business strategy.

There are many ‘general’ reasons for this, e.g., there's no clear definition, the term has been violated by senior business executives, a plan becomes confused with a strategy, and it's a skill you need to learn.

However, for agencies in particular, I think they are further impacted due to two major factors:

1. A large amount of agency founders are accidental business owners. They start doing their discipline eg web design, and they f*ing love it, they are so good at it therefore demand naturally grows and before they know it they are leading a team. The founder is either still doing web design because they love it; therefore, no one has defined the business strategy, OR they are dealing with the people and business problems, and no one has ever taught them how to do a strategy, or they don't have the time to create one.

2. Agencies are way too embedded to their service, missing the overall value they are offering to the market. This is why strategy is often referred to as the 'big picture' (or other nonsense terms like that). Strategy requires thinking beyond your service offerings to consider the value you provide to clients and how you stand against competitors in your market. This process takes time and a degree of critical of thinking that demands detachment from your business to assess everything objectively, without emotion or bias.

Thanks for reading