Hi

Here are the two fundamental truths of business.

1. Continuously create value that solves problems for a large number of customers.
2. Keep the cost of creating value lower than the price the customer pays.

Let's take these principles and apply it to agency businesses. I will take the example of a digital marketing agency. Feel free to try this with your business.

Today lets focus on the first one.

Principle 1

Let us break this down :

Continuously create value that solves problems for a large number of customers.

Continuously:

Business stops when there are no clients, or the clients stop paying. Having a pipeline of clients is essential.

Value:

The service you provide should be valued by your clients. And looking back at the 2 principles, a business will value...

• Creating a pipeline of clients OR generating leads
• Communicating the value of the business OR Marketing Communication/ Advertisements.
• Automation of marketing activities that saves costs.

Problems:

The problems solved for the business should be very visible to the clients. And the problem should be hurting the business in some way. Some problems as per my best guess:

• Not enough sales
• Not enough leads
• Poor quality leads
• People don't know the business in the market
• People don't understand what the business does
• People don't remember what the business does (lack of brand recall)
• Internal processes are too complex and cost a lot of money.
• Internal processes are always delayed

Feel free to add more problem statements. This is a sample list.

Customers

A digital marketing agency can work with a lot of industry verticals. Given that the agency should get clients continuously, add value, and solve problem, it is not practical to work with everyone.

The most sensible decision here is to work with one type of customers. It will reduce the cost of acquiring customers. Thus ensure a healthy sales pipeline.

How do we create a new business model?

Select one type of customer (more on this topic in a few days)

Then select one problem statement.

Add one value statement.

Now you have a starting point for a business model.

Example

Small Clinics (customer) + People don't know the business (problem) + Creating a pipeline of clients

Extending this further.

Small clinics not well known in their area do not get enough patients.

Our digital marketing approach ensure people who search for doctors near them find your clinic.

There is more..

The solution and how the solution is delivered will impact the marketing agency's profit margins. That is Principle 2.

We will discuss it tomorrow.

Till then, try to write down the various problems, value, and types of customers in your business.

Best

Anoop Kurup

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