How marketers can use statistics from both surveys, to examine ways in which marketing services organizations can better position, compete, and gain market share in this increasingly challenging environment, writes, John Reese, Senior Vice President of Marketing at Mavenlink.
Today’s marketing services industry is more crowded and competitive than ever. As the digital market need has grown, new entrants from adjacent professional services markets have joined the hunt for clients, and traditional consulting services firms, such as Deloitte and Accenture have made strings of digital marketing acquisitions during the past half-decade to help to crowd the space. With expanded expertise and geographic reach, the marketing capabilities of some of these new faces now rival those of many agency market stalwarts.
Even amid the acquisition fervor, the number of marketing and consulting services firms in the U.S. has grown substantially -- from just fewer than 29,000 in 2012 to more than 36,000 in 2016 (the last year the U.S. Census Bureau has data available). With so many new firms entering the market, existing players have been feeling the heat. Seventy percent of respondents to a recent market survey of more than 300 marketing and professional services organizations that we conducted, reported they experienced an increase in competition over the past 12 months.
Recent research of more than 200 CEOs from agency market specialist, Mirren, corroborates our findings of stiffer competition. Using statistics from both surveys, we can examine ways in which marketing services organizations can better position, compete, and gain market share in this increasingly challenging environment.
1. Find New Ways to Differentiate
CEOs surveyed by Mirren identified what they felt were differentiators for their businesses. The trouble? Most identified the same set of differentiators as their fellow CEOs. In particular, “creative abilities, nimble nature, full service integrated offering, and close client relationships” were popular rejoinders. While agency leaders shouldn’t necessarily stop investing in those characteristics, it’s crucial they understand the need for relevant capabilities that actually set them apart.
When looking for other ways to separate from the pack, it’s important to hold true to who you are, what you do, and why you do it. It just may be time to rethink how you do it differently. Hubspot offers some great suggestions on ways agencies can differentiate, like selection of an industry focus, being the best at a certain capability, approaching client problems with a unique point of view, having greater access to data, and more. However agency leaders choose to separate themselves, keeping clear of the most common ways peers are differentiating themselves will result in benefits.
2. Capture and Operationalize Domain Knowledge
Often lost in the shuffle of running a business is capturing and sustaining the expert knowledge employees gain and contribute over time. When a seasoned employee leaves, the domain information they possess often leaves with them, creating a knowledge rift. Capturing this type of information is not easily done, especially if the organization is not making a point to do so. Surveyed CEOs voiced their frustration, echoing the idea that “operational systems are not effectively capturing and scaling institutional knowledge.” When talent leaves, so too do many of the benefits those people provide to the agency.
Agencies must begin to capture the domain knowledge of their employees. Whether that process entails keeping track of information in common file-sharing platforms or investing in knowledge retention-specific technology, it’s time well spent. However leaders approach retaining domain knowledge, it’s imperative they make it a more pressing priority.
3. Embrace a Blended Workforce
Finding the right talent is difficult. Often, needs for specialized skills ebb and flow. As a result, many agencies are becoming more distributed, leveraging a remote workforce that isn’t limited by geographic boundaries. A majority of our survey respondents reported that they plan to increase distributed work in the year to come. While embracing a blended workforce—a mix of in-house employees, contractors, and/or remote staff—broadens the talent pool, it also provides other benefits.
Nearly three-quarters (74%) of our survey respondents felt that having a network of contractors is very important to critical for their business. Blended workforces do not just help with meeting resource demand; they also provide a competitive edge, including business flexibility in staffing projects, speed of delivery, and access to a broader set of skills. However, while a majority of companies are welcoming of remote teams, many still lack a formal policy for managing them. Agencies that wish to better compete must not only embrace a blended workforce, but they must also create the infrastructure necessary to support this new paradigm.
4. Streamline Operations
Although most see having a resource bench as a must, half of the companies we surveyed have had to turn down work in the last 12 months, and 67% said this was due to not having an appropriate amount of resources. Resource management challenges are a major obstacle to operational efficiency. Agencies that focus on streamlining resource management and other operations will have a clearer path to a competitive edge.
Beyond resource management, organizations also reported the following challenges: difficulty getting the right skills on the right projects, a lack of visibility into resources across multiple projects, a lack of visibility into important business information, information spread across too many systems, and an inability to collaborate. Clearly, agencies must streamline the way they manage and enable their talent, projects, and information if they are to overcome the operational challenges of today.
Adapting to the New Competitive Landscape
It’s clear competition for agencies is heading to a fever pitch. However, too many agencies feel they are differentiating themselves in ways that aren’t truly unique. To gain a competitive edge in this new environment, agency leaders must rethink their differentiating factors, better capture and retain domain knowledge, take greater advantage of an extended workforce to improve business flexibility, and focus on streamlining their operations to enable improved productivity, execution, and visibility across the agency.
This article was originally published by MarTech Advisor on May 6, 2019.