Agencies that generate $5 million to $10 million in annual revenue are faced with a perpetual dilemma. If they remain at their current size, they risk being unable to accommodate larger pieces of business that come their way. If they grow, they could lose the agility and access to top-level talent that are core selling points to clients and would-be employees.
For this virtual roundtable, we asked execs from five such agencies — Blue Latitude Health, Brandsymbol, Brick City Greenhouse, Motionstrand and StoneArch — to weigh in on the opportunities and challenges that come with life in this revenue range. Answers have been lightly edited for length and clarity.
Q1. During normal times, is the $5 million-$10 million revenue range a good place to be?
Marcia Miller, president and CEO, StoneArch
Answer: It’s both a good thing and a challenging one. Our size, and concentration in only one office, allows us to serve each client uniquely. We can be nimble, flexible and can easily adapt processes to work for our clients’ needs. Our clients also get access to senior people who are experienced in this industry. We have no B-team.
Matthew Lee, president, Motionstrand
Answer: That range is always going to be a balancing act between trying to grow and not overextending. You’re big enough so that there is some stability, but you still retain that small-agency feel. At this size there are enough large accounts and new business activity that there is always some sort of growth opportunity on the table. The trick is going after the right opportunities.
Q2. What are the pros that come with being in that revenue range?
Mike Williams, SVP, Brandsymbol
Answer: Because we’re more of a boutique-style agency, we’re not turning an aircraft carrier in the harbor when we must be nimble and responsive to unexpected changes. Because we don’t have the same overhead burdens as our larger competitors, we’re able to operate at a high level without passing on higher operating costs to our clients.
James Atherton, U.S. managing director, Blue Latitude Health
Answer: Everything is relative, so it really depends what you are referencing this against. Being smaller enables you to move faster than a $100 million or $200 million organization. Information-sharing is easier and there is a different sense of community. Our culture is entrepreneurial and innovative, so clients benefit from new approaches and thinking and employees can grow and develop quickly within the organization.
Q3. What are the cons with being in the $5 million-10 million range?
Answer: Being this size does not allow us to have multiple people in every single role at the agency. That puts pressure on the team when we are busy, and sometimes causes bottlenecks in workflow and stress for individuals who hold independent roles.
Answer: Although we’d like to have a more visible presence at various industry conferences and in key publications, we have to be more selective in deploying our financial resources.
Answer: It’s situation-dependent, but there can be risk that you are overreliant on a finite number of accounts.
Answer: As we are all seeing now, as a small business you are always exposed to the risk of client loss and economic disruption. There is less organizational fat to cut in a small company where everyone is a big contributor.
Q4. What are your key selling points to current and potential employees?
Fred Kinch, founder, content lead, Brick City Greenhouse
Answer: Senior-level attention and trust. Day-to-day senior level attention on client business is our rule of thumb as an agency. Again, it’s less about the revenue range and more about our business model. Then we hire super-talented, senior people and trust them to deliver. We don’t have a lot of layers and give people the freedom and autonomy to work how and when they want. This higher level of trust leads to a higher degree of performance and accountability.
Answer: There is definitely a selling point around a startup mentality, where everyone is working together to build something and share in successes, but this is supplementary. The core selling points are less around size/stage and more around our differentiated proposition in the market.
Answer: Purposeful work. We are all fueled by the desire to make a difference and are passionate about the possibilities in the world of health. Employees who find their way to StoneArch are innately curious and love to unravel the complexities in the work we do.
Answer: People who seek out a small agency are looking for a very different experience than the typical corporate office environment. They are looking for a creative, nimble, flexible work culture where they can invest in their work and make a difference.
Q5. Share an example of a time your size worked to your benefit — or to your detriment.
Answer: Clients are often looking for innovators with new services or approaches. If you get this narrative right, it can be compelling. On the flipside, we have hit roadblocks where clients, mainly in procurement, are looking for a certain number of people in certain disciplines.
Answer: By design, we don’t have a huge international team and massive Rolodex of clients. We completely respect those clients to select what they may feel is a safer choice, but we maintain those relationships in case our competitor falls short.
Answer: More often than not, our size works to our benefit. Clients are looking for true partnerships with people who roll up their sleeves and solve problems. Our clients have full access to anyone on the team, and we are true Minnesotans — willing to help however we can.
Q6. What’s next?
Answer: Our model isn’t about being big or small. It’s about removing all the baggage that comes with the traditional AOR models to create a more productive and rewarding client/agency relationship. We’ve got a great thing going and we’re not going to cap our size as long as we can maintain that mojo.
Answer: Many of our big new business initiatives had to change, so we would like to start getting back to a more predictable new business pipeline as we head into the second half of the year. With so many companies being forced into some sort of accelerated digital transformation, we are cautiously optimistic there will still be strong demand for what we do.
Answer: We have a three-pronged strategy: protect our key accounts, establish our differentiated model on a few teams we are spinning up and expand this model through AOR wins and further development of our consulting practice.
Answer: StoneArch is positioned to continue to grow in revenue, profitability, client roster and talented people. We’re excited to see all of these things work together for the benefit of our clients.
Answer: Before the COVID-19 crisis we confidently projected our best year in 2020. We’ve certainly tempered those expectations and have strategically revisited our 2020 plans. However, our most important goals haven’t changed one iota: to continue providing world-class branding solutions to our clients and also to maintain and grow our agency family.