In a crowded agency market, standing out is more important than ever before. This guide will show you how to differentiate your agency, without resorting to gimmicks.
“Full-service agency”, “integrated marketing approach”, “trusted growth partner”.
Do all these terms sound familiar to you?
Agencies around the world are guilty of using the same few tired cliches to describe themselves. They’re all integrated in some way, and they all offer full-service experiences.
The result? They drown in a sea of me-too competitors who are all chasing the same clients with the same droll pitches.
The key to combating this sameness is to differentiate yourself clearly. Clients should be able to tell who you are and what you do. The more you stand out, the better a niche you can carve for yourself.
In this guide, I’ll show you 6 ways you can differentiate your agency.
Why Standing Out Matters More Than Ever
The agency business is crowded and competitive. This is partly due to the low-cost nature of the business. It doesn’t take much to start an agency - some expertise, a Rolodex of prospects, and a few months of runway in the bank.
Then there’s competition from abroad. When clients can choose freelancers and agencies located halfway across the globe at cheap prices, why should they choose you?
There are nearly 40,000 firms in the advertising/marketing space in the US, according to Statista (Image source)
Given this intense competition, standing out matters more than ever. Being yet another “full-service” agency offering “integrated marketing” services isn’t enough. You have to stake your claim to an expertise, belief, or industry, and make it your own.
What It Means to be “Different”
In the 1980s, Michael Porter described his “Three Generic Strategies” to getting a competitive advantage. These three strategies were lower costs, differentiated services, and focus.
According to Porter, pursuing differentiation as a competitive strategy works when:
- The target customers are not price-sensitive
- The market is hyper-competitive or saturated
- The target customers have specific needs that are possibly underserved, or
- The firm has unique capabilities to serve unfulfilled needs
This describes the agency business perfectly - a saturated market with specific but often underserved needs.
Yet, agencies are hesitant to pursue differentiation. Part of this stems from the fear of missing out. If you describe yourself as an “SEO agency”, you won’t be able to land that juicy social media contract.
But in this pursuit to please everyone, agencies end up pleasing no one. You don’t generate word-of-mouth referrals by being merely “okay” at a dozen things; you earn them by being exceptional at a few things.
This is the very crux of differentiation: to clearly claim what you’re not. You’re a social media agency because you’re not a PPC agency. And you’re a creative agency because you’re not an SEO agency.
Think of differentiation as an exercise in negation. The more things you can claim to not be, the more you’ll stand out.
On that note, let’s look at some ways you can differentiate yourself below.
How to Differentiate Your Agency
Differentiation isn’t the same as branding or positioning. It’s about who you are and what you want to do, not about how you look.
Essentially, you’re trying to do two things:
- Stand out from competitors
- Communicate what you do well
The former is competitor-focused. How you stand out will depend on what your competitors are already doing. If every competitor claims to be “full-service”, you have to find a position that’s relatively distinct from it.
The latter is client-focused. What you communicate to clients will depend on what they’re actively looking for. If your target clients look for experience, you’ll want to emphasize that in your marketing.
Your agency differentiation can spring from any number of things - your brand, market positioning, industry focus, experience, etc. You can have multiple points of differentiation as long as you communicate them clearly.
On that note, let’s look at some ways you can differentiate yourself.
1. Differentiation Through Expertise
Earlier this month, Ford ended its 75-year long relationship with WPP as its lead creative partner. In its place, Ford picked a handful of agencies - BBDO, W+K, TLGG, and Organic - to fill niche roles.
This highlights a growing trend in agency-client relationships. Brands are increasingly shifting from the “single large agency for everything” model to hiring a number of agencies with niche expertise.
In fact, a SoDA report found that 40% of marketers are maintaining a roster of highly specialized agencies, up from 30% in 2016.
If your clients want expertise, differentiating yourself through it is a no-brainer. Don’t focus on being good at everything. Rather, focus on being exceptional at a few in-demand fields. Clients should think of you as a “content marketing” or “social media”, not yet another full-service agency that doesn’t excel at anything.
Ignite Visibility, a SEO agency, lists its service focus as almost exclusively “SEO” on its Clutch page.
Which expertise you choose to focus on will depend on your own experience as well as market demand. If you have a lot of talent with B2B inbound experience, you’ll want to focus on it. But if market demand for this service is dropping, you might want to pivot to a more in-demand, but related service.
2. Differentiation Through Industry-Focus
A sure way to stand out is to focus on a specific industry or client type. This is particularly true for smaller agencies looking to carve a niche.
This approach works because clients want to work with agencies that understand their businesses’ unique challenges. Selling cars isn’t the same as selling health supplements. If you can’t speak their language, you’ll have a hard time convincing clients to part with their money.
That’s not all. Focusing on a specific industry also brings other benefits:
- More referrals: Clients within an industry usually know each other. Do good work for one client and you’ll find that they’ll recommend you to their friends in the industry.
- Easier client acquisition: With a fixed industry focus, you don’t have to target everyone. Rather, you can build up laser-targeted lists of prospects, saving money on client acquisition.
- Industry knowledge: Focusing on a single industry will help you understand its core problems. This knowledge can be a vital moat against outside competitors.
- Replicable solutions: Clients within the same industry often have the same problems. Solutions designed for one client can often be replicated across dozens of others. This makes for easier implementation and faster results.
You can choose to focus on a specific industry (such as “healthcare companies”) or a specific business type (“SaaS companies”). You can also combine it with niche expertise to zoom in on a narrow, under-serviced market (such as “SEO for SaaS companies”).
For example, Emereald is a digital marketing agency that exclusively targets real estate companies. This helps it narrow down its target clients and develop industry-specific solutions.
3. Differentiation Through Authority
Have you won dozens of Clio awards? Can you claim to have a long and illustrious history? Do respected magazines and journalists recognize you as an industry expert?
If yes, this can be a great way to differentiate yourself.
Authority is one of the fundamental pillars of persuasion. We are more likely to believe someone if they are recognized as an authority in their field. This is why you don’t question a doctor when he prescribes you medicine.
In the context of an agency, authority can spring from a number of sources, such as:
- Winning well-respected industry awards
- Years in business, especially in a particular field
- Having a prestigious list of clients
- Public recognition and visibility, especially in respected publications
- Firm size and number of locations
- A well-recognized and respected leadership team
By itself, authority isn’t a great way to differentiate yourself. But when combined with other factors - niche expertise, industry focus - it can be a powerful persuasion tool.
After all, if you were a healthcare company, who would you rather work with - the 100-person strong with 50 years of experience in healthcare, or the 5-person company that has never had a healthcare client?
For example, 97th Floor has a dedicated awards page where it lists all the awards it has received over the years.
This goes a long way towards establishing its credentials as an “authority”.
4. Differentiation Through Content
In a world where brands are increasingly becoming publishers, creating high-value content is a great way to stand out.
(By content, I don’t mean just blog posts and videos, but also tools, research studies, and websites).
This approach works because content is a self-contained marketing tool. A high-value content piece acts as an advertisement for your capabilities. With the right distribution spark, such content often finds an audience for itself, bringing in traffic and leads for years.
What kind of content you create will depend on what you want to showcase. Create industry-focused tools to showcase your technical chops. To attract social media clients, create more Instagram stories. For a really big “perceived expertise” bump, operate your own event or conference.
Here are some content types that work well:
- Think pieces, op-eds, and thought leadership content to build your expertise.
- Research studies, surveys, and industry reports showcasing your industry insight and data analytics capabilities.
- Visual content, including videos, to showcase your content creation capabilities.
- Tools and websites to showcase technical capabilities while offering industry clients something useful. A popular tool is a fantastic ad for your agency.
Focus on quality over quantity. You’re using content as a brand strategy, not a traffic strategy. A couple of high-value pieces will do more than two dozen keyword-stuffed articles.
5. Differentiate Through Branding
Go through a dozen agency websites and you’ll be struck by how similar they all feel. The same layout, the same indistinguishable logos, and even names that sound similar.
A vibrant, eye-catching brand stands out in this sea of sameness. Paired with other factors, a strong brand can be a powerful differentiating factor.
As an example, consider Digitas’ unmissable unicorn logo. In an industry where bland acronyms and identical geometric logos are the norm, the prancing white unicorn on a red circle stands out. Digitas takes it a step further by customizing the unicorn for each of its locations:
Branding isn’t just about how you look, of course. It is also about your attitude, beliefs, and even your name.
Wexley School for Girls, for instance, stands out because of its name, sense of humor, and even its spartan website. By breaking the mold, this agency stands out.
Adopting a bold brand does come with a few risks. Some clients might find your brand offensive. Others might think you’re trying too hard. If you’re going to adopt this approach, weigh the pros and cons. Do you stand to gain more from standing out than from losing a few odd clients?
We’ve covered agency branding extensively in an earlier article that you can read here.
6. Differentiation Through Pricing
In SoDA’s 2017 report, 38% of marketers said that they wanted different pricing models from their agencies.
This marks an emerging trend in the agency-client relationship.
Brands used to often be price agnostic. But thanks to higher competition, greater transparency, and development of in-house talent, brands are increasingly scrutinizing their agency accounts. There is a growing demand for agency services that are priced more transparently.
In this context, your pricing model can be a valuable differentiator.
Take PR2020, for instance. Instead of hourly billing, the agency has a fixed monthly price with “point pricing” for individual services. This gives clients much better insight into where their money goes.
This pricing model also helps the agency stand out from competitors that use more obscure pricing.
Here’s another example from WebPageFX. The agency tells customers exactly how much each plan will cost and what they’ll get in return. Since WebPageFX’ clients are mostly small business, this transparent pricing reduces a lot of their anxiety about hiring an agency.
There are several approaches to using pricing as a differentiating tactic, such as:
- Lower prices: By offering lower pricing, you bracket yourself as a “value” agency and undercut more expensive competition.
- Pricing models: Innovative pricing models such as point pricing or performance-pricing can help you stand out against competitors who use hourly project-based pricing.
- Transparency: Adopting transparency in pricing is a good way to differentiate against competitors who offer obscure pricing. Clients feel more reassured if you can tell them exactly how their money will be spent.
Be careful of using pricing as your only differentiating factor though. You can risk branding yourself as a “cheap” agency or leaving money on the table when dealing with larger clients.
Over to You
Differentiating yourself is crucial for standing out in a saturated market. The more distinct you are, the easier you are to recognize. The easiest way to do this is to focus on a specific expertise or industry. You can also differentiate yourself based on your results, work, industry-standing, and content.
How does your agency differentiate itself? We’d love to hear your thoughts in the comments below!