– Agencies are most profitable when they can templatize their work and take on more clients while reusing resources.
– This approach may not be in the best interest of brands or companies, as templates may not be tailored to their specific needs.
– Access to tools and templates from the beginning could potentially allow brands to hire in-house instead of outsourcing to agencies.Reconsider the use of templates and explore the possibility of providing brands with tools and templates from the beginning to improve their positioning and resource allocation, potentially eliminating the need to outsource to agencies.Agencies are most profitable when they can templatize their work and take on more clients while reusing resources across all the businesses they service. It’s a unit economics thing. When work is required, it comes down to a function of the amount of time it takes a person to complete the work and the amount of money they profit from a client for that transaction to be profitable. If you spend too much time on a task, the action becomes unprofitable. So agencies typically fall under one of two models: outsource labor to cheaper countries to maintain profitability, or templatize everything and focus relentlessly on business development with churn built in, or a hybrid of both of these.
None of these are inherently bad. It’s a practical business decision made by a group of people to put profit above all else, and frankly, as a business, it’s a good way of operating. There are some serious drawbacks though. These models aren’t in the best interest of the brands or companies. In a vacuum, the advice provided only impacts certain areas of the business. Most of the time, these templates are guesses made based on looking at other companies and work. Copywriting is reused as much as possible. Templates are reused as much as possible. “Welcome to the Fam, Family, Tribe…” – everyone. So as a company, most of the time you’re paying someone monthly for them to use templates that they’ve already created. No company likes doing this. The problem is, not all businesses are the same, which means the customer questions aren’t the same and the customer journey isn’t the same. How can an agency whose business model is around templatizing everything actually perform where the businesses aren’t all the same? The answer is they can’t. At least not well or profitably. The further answer is the templates that they create aren’t based on data sources 99% of the time, which really means you’re paying people to guess based on templatized work that they’ve used across other companies. All of a sudden, an agency is nothing better than templates that someone internally could probably follow to produce more company-centric work. In testing, a good templatization with primer questions can outperform low to mid-level agency staff. The natural course of events is for a brand to launch, find traction by learning, then hire an agency, then hire in-house. So how would the game change if a brand had access to tools and templates from day one that would help them better position themselves and allocate resources? Could they hire someone in house instead of outsource to an agency? So maybe the answer is actually just to reconsider how we present templates instead of hiring more people? Perhaps the real “why” behind the success of some agencies is just having better access to templates and industry knowledge? Let’s discuss.#ecommerce #marketing #strategyhttps://www.linkedin.com/in/jivanco