How to productise your agency’s value, with Brian Kessman
Jul 23, 2024
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Founder of Lodestar Agency Consulting, Brian Kessman, discusses transitioning to a value-led revenue model in agencies, emphasizing productizing agency value, restructuring teams for client problem-solving, and utilizing key performance indicators. The conversation includes insights on the impact of time sheets, customizing solutions, and transitioning to a transformational agency model.
Focus on solving business problems over selling deliverables is vital for agency success.
Transitioning to a value-led revenue model is crucial for agency growth and profitability.
Challenges of industry commoditization, declining fees, and outdated operating models affect agency performance.
Deep dives
Emphasis on Problem-Solving Approach Over Deliverables
Focusing on solving business problems rather than just selling deliverables emerged as a key theme in the podcast. The shift towards a business-problem centric approach, where the website or deliverables are incorporated into the solution, was highlighted as crucial.
Transition to Value-led Revenue Model
The importance of transitioning to a value-led revenue model was underscored in the episode. Highlighting the benefits of productizing agency's value to drive growth and profitability potential was a focal point, emphasizing the shift from time-based models to solutions-based offerings.
Challenges Faced by Agencies in the Current Business Model
The challenges agencies encounter due to the commoditization of the industry, declining fees, and unsustainable workloads were discussed. The implications of outdated operating models in meeting client expectations and the impact on talent burnout and innovation were highlighted.
Exploration of Value-led Revenue Models
The podcast delved into three primary value-led revenue models: value-based, performance-based, and output-based models. Discussions included examples of how these models are implemented and the advantages and drawbacks associated with each model.
Role Evolution and Impact of Future Trends
Insights were shared on the evolution of roles within agencies towards outcome-focused responsibilities. Trends such as clients bringing work in-house due to AI advancements were highlighted, underlining the need for agencies to adapt their business models for future-proofing and strategic positioning.
Welcome to episode 118. On the last episode, I interviewed the brilliant Tim Williams from Ignition Consulting group about pricing strategies and why agencies need to sell outputs and value and not hours, particularly given the rise of generative AI. If you haven't listened to that, I'd recommend you go back and listen to episode 117 because Tim shares so many different aspects of why we need to do this as agencies. Today's guest, founder of Lodestar Agency Consulting Brian Kessman, continues this theme and shares how to make that shift to a value led revenue model.
In this chat, we talk about: - what it means to productize your agency's value - the benefits it can have on your agency's financial and operational performance - how the agency is set up to work in this model by department - and the skills you'll need in your account management role to be successful with this new way of working.
Please check out Brian’s website because there's a detailed 15 minutes presentation called ‘Shift Your Agency's Model from Commoditized Services to High Value Solutions’, and it's well worth a watch if you're interested, particularly in diving deeper into value led revenue models. https://www.lodestaragencyconsulting.com/productize-your-agencys-value
If you're responsible for managing client relationships and for delivering the commercial value to your clients and growing your accounts, I'm going to be running a mini training webinar in the summer of 2024, so if you'd like to be notified about when these go live, you can do that by going to my website, https://www.accountmanagementskills.com and signing up to receive my weekly emails. I typically share tips and strategies for commercially minded account managers.
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