6 Steps to Grow Your Digital Marketing Agency Through Verticalization

Since 2017, we’ve published a popular annual report called the State of the Digital Marketing Agency. Every year, we survey our agency customers (there are a lot of them) to learn what kinds of services they offer, how they charge their clients, how much spend they manage, how they win new business, and more.

If there’s one key insight you can take away from three years of reports, it’s this: The biggest challenge digital marketing agencies tend to face is acquiring new clients.

Upon reflection, this makes sense, right? Running a successful agency means growing your clients’ businesses while simultaneously growing your own business. That’s—uh—not an easy thing to do.

But it is possible. In fact, when it comes to small and medium-sized shops, there’s one strategy in particular that we find to be an exceptionally effective driver of growth: verticalization.

Verticalization is a big, made-up-sounding word with a surprisingly simple definition: It’s the process of making your agency industry-specific. In other words, a verticalized agency only serves businesses from a single industry.

In this guide, I’m covering why you’d want to consider verticalizing your agency and how to do that. When you finish reading, you’ll walk away knowing:

• Why verticalization helps your agency grow
• How to verticalize your agency in six steps

Sound like a plan? Cool. Let’s get on with it.

Why verticalization helps your agency grow

Another key insight from years of surveying our agency customers is that earning referrals from current clients is consistently the most common way to acquire new clients.

This isn’t surprising. For a small business owner, outsourcing their digital marketing efforts—whether it’s in just one area, like paid search, or in every area—is a huge decision. Nobody hands over the responsibility for filling their funnel and driving sales to an agency they don’t trust. And nothing makes a business owner trust your agency like a stamp of approval from a fellow business owner.

And yet.

Typically, the well of client referrals is a well that runs dry. It’s more than likely that your digital marketing agency can’t rely solely on referrals forever. At some point, you have to prospect.

Prospecting—which refers to the process of actively finding and pitching prospective clients—is hard enough as it is. You have to convince those skeptical business owners we just talked about that (1) there’s room to improve their digital marketing and (2) that they should trust you to deliver those improvements. Again: not an easy thing to do.

An essential step towards winning over those business owners is demonstrating your understanding of the spaces they operate in. When you’re prospecting businesses in every industry from SaaS to brick-and-mortar, you have to spend a ton of time studying. Plus, you have to retain an immense amount of information.

Alternatively, when you’re only prospecting businesses from a single industry, you don’t have to hit the books nearly as hard. Yeah—you better know whatever industry you choose like the back of your hand. But it goes without saying that the time it takes to understand one industry is a heck of a lot less than the time it takes to understand five industries.

The problems that come with representing clients from all kinds of verticals doesn’t stop at the prospecting stage, either. When the time comes to actually—you know—manage these businesses’ digital marketing campaigns, you’re going to be implementing widely different strategies for each one. Whereas your SaaS clients will need you to nurture prospects through an exceptionally long sales cycle throughout the year, your brick-and-mortar clients will need you to really ramp things up during Q4.

The problem with managing all kinds of different strategies comes down to a single word: scale. Quite simply, the non-verticalized route (AKA the “scattershot” route) doesn’t scale well over time. And if you’re not scaling, then what are we doing here?

The 5 key benefits of a verticalized agency

Before we move onto the process of verticalizing your digital marketing agency, let’s make sure we’re all on the same page when it comes to the principal benefits of verticalization.

1. You can scale more easily. Representing businesses from only one vertical enables you to literally replicate account structures across clients. All of a sudden, onboarding is a heck of a lot easier and a heck of a lot quicker.
2. You can brand yourself as an expert. Is it easy to become an expert on all things ecommerce? Of course not. But it’s a lot easier than becoming an expert on all things ecommerce and all things nonprofit and all things consumer-packaged goods.
3. You can offer more services. Thanks to the time-savings you’ll enjoy by not learning the ins and outs of every industry under the sun, you’ll be able to offer a relatively wide array of services to your clients. In a word, you’ll make yourself indispensable. 
4. You can earn laser-focused testimonials. Why would a SaaS prospect care about the results you’ve driven for a brick-and-mortar client? Answer: They wouldn’t. When you verticalize, all of your testimonials—you only need one, really—become relevant.
5. You can worry less about competitors. There are a lot of multi-vertical agencies. There are considerably fewer brewery agencies. Nuff said.

Alrighty, then. Let’s talk about the six steps you can take to verticalize your agency.

How to verticalize your agency in six steps

Although every digital marketing agency is unique, we’ve had enough conversations with our customers to feel confident that the following six steps constitute a pretty solid formula for verticalization and growth. Despite that confidence, we encourage you to take each step with a grain of salt and make sure it’s appropriate for your agency.

1. Pick a vertical

The first step towards a successful, verticalized agency is pretty research-intensive. After all, if you’re going to limit yourself to a single industry, you want your decision to be as informed as possible.

At this beginning stage, keyword research tools (we have a free one!) are your best friend. Use them to gauge the respective levels of demand for digital marketing agencies across a bunch of different verticals.

“Dental marketing agency” and “restaurant marketing agency,” for example, both get searched a couple hundred times a month in the US, which indicates substantial demand. “Dance school marketing agency,” on the other hand, doesn’t get searched much at all.

2. Hit the books

Got the industry you want to go after? Good. Now it’s time to study.

Winning the trust of advertisers in your target industry requires knowing that industry inside and out. What are the most common pain points? What are the most common obstacles to growth? What are these businesses trying to accomplish? Who are they trying to get in the door? How long is the average sales cycle? There’s no getting around it—you have to be able to answer these questions.

Empathy plays a huge role in this. If you can’t empathize with your prospective clients—put yourself in their shoes and understand their perspectives, that is—then you’re not going to market their businesses effectively.

Picking up on industry lingo is also a good idea. It makes for good ad and landing page copy.

3. Develop a strategy

This is where all the knowledge you’ve acquired pays off. Before you start pitching, you need to get the wheels turning on strategy. You’ve got to think in terms of the funnel.

What do conversions look like in this industry? Let’s say you’ve decided to target the local gym scene. Ask yourself: What do gym owners consider conversions? Off the top of my head, I’d imagine they include things like watching a Facebook video, making a phone call, signing up for a newsletter, downloading a guide, scheduling a consultation, doing a trial period, and purchasing a membership.

Once you’ve determined the relative value of those conversion actions, it’s time to figure out how you’re going to drive them. Get Facebook video views by targeting lookalike audiences based on gyms’ current customers. Drive content downloads by targeting the people who watched at least half of those videos. Use the contact information you get from those content downloads to offer free trial periods.

In a word: strategize.

By the way—notice how that strategy will work for basically all of your clients? Yeah. That’s the whole point.

4. Prospect with purpose

Alright. You’ve picked an industry, learned everything there is to learn about it, and assembled the bones of a full-funnel marketing strategy. The time has come to get some clients in the door.

Considering that you’re just starting out, you’ll probably have to do some cold outreach. Once you’ve identified some businesses you can reach out to, give them each a quick Google search and evaluate the results. Are they running paid search ads? If so, are they doing a good job? If the answer to both of those questions is a resounding no, give those places a call and let them know how you can help. Make sure you don’t talk to them like they’re dumb, though.

Once you’ve brought a few clients on board, you enable yourself to tap into two great sources of new business: referrals and testimonials. Don’t be afraid to straight up (and politely) ask your clients to refer you to other businesses. On top of that, go ahead and ask them if they’d be willing to write up a quick testimonial or film a short video to let site visitors know how well you’ve served them. Again, this all comes back to earning people’s trust.

5. Audit and pitch

I have two disclaimers I need to share. One, I’m about to plug our free account audit solution, the Google Ads Performance Grader. Two, it’s going to get you fired up.

Essentially, the Grader is your one-stop shop for auditing prospective clients’ accounts and arming yourself with the data you need to make an irresistible pitch.

Here’s how it works. Simply connect a prospect’s Google Ads account to the Grader and, in about 60 seconds, you’ll have a ton of extremely valuable information:

• Where they’re wasting their ad spend
• Their aggregate Quality Score and CTR
• The quality of their landing pages
• And more!

We’ll assemble all that information for you in a sleek, white-labeled report that you can use as leverage when pitching the prospect. Spoiler alert: You’re probably going to succeed.

(Our paid solution, WordStream Advisor for Agencies, comes with a more robust version of the Grader known as the New Business Center. Just sayin’.)

6. Go forth and conquer

With a brain full of industry knowledge, a foolproof, replicable strategy, a growing base of clients who are eager to vouch for you, and an affordable software solution that brings out the gunslingin’ dealmaker we all know is inside you, nothing can stop your verticalized digital marketing agency from growing.

So … what are you waiting for? Get to it!