Why You Can’t Sign Any SMMA Clients (and how to fix it)

Iman Gadzhi Extended

5 Aug 202410:42

Summary

TLDRThis video script highlights the competitive nature of the agency space and turns it into an opportunity for standing out. It emphasizes the power of guarantees in making offers irresistible and building trust with clients. The speaker introduces four types of guarantees: money back, guarantee minus difference, work to result, and performance-only deals, each tailored for different agency stages and risk tolerance. The script also shares a success story to illustrate the effectiveness of these strategies, encouraging viewers to implement guarantees to enhance client relationships and agency reputation.

Takeaways

🚀 Competitive markets offer opportunities for agencies to stand out through the use of guarantees.
🏆 Guarantees can transform an offer into a no-brainer for clients, as they bear no risk if the promised result is not achieved.
📝 A guarantee is a promise to a prospect before they become a client, with the agency bearing the consequence if the result is not achieved.
🛒 Examples of guarantees in consumer products, like TVs and mattresses, illustrate how risk transfer can influence purchasing decisions.
💰 The money-back guarantee is a common approach but can be risky for agencies, as it involves refunding the full amount if the result is not met.
🔄 Guarantee Minus Difference (GMD) is a lower-risk alternative to the money-back guarantee, where clients are refunded only for the shortfall in results.
🕒 The work-to-result guarantee offers extra time to deliver on the promise without additional payment, aligning with clients' focus on results rather than strict timelines.
💼 Performance-only deals, such as pay-per-appointment, transfer all risk to the agency but can be very effective in closing deals and ensuring client satisfaction.
💹 Understanding the client's business and margins is crucial when offering performance-based deals to manage risk and ensure fair compensation.
📈 The choice of guarantee should reflect the agency's level of experience and confidence in delivering results, with beginners often better suited to lower-risk guarantees.
🌟 Implementing the right guarantee can elevate an agency from being just another competitor to a reliable, well-known, and trustworthy service provider.

Q & A

What is the main argument presented in the video script about the competitive agency space?
-The main argument is that increased competition in the agency space is an opportunity rather than a threat, as it enhances the ability to stand out and succeed by using guarantees effectively.
Why does the speaker suggest that guarantees are a key to standing out in the agency world?
-The speaker suggests that guarantees make an offer a no-brainer for clients, as they transfer risk from the client to the agency, creating a win-win situation where clients have nothing to lose.
What is the definition of a 'guarantee' as presented in the script?
-A guarantee is defined as a promise made to a prospect before they become a client, based on a particular result. If the result is not achieved, the agency bears the consequence, essentially transferring risk.
How does the speaker use the example of purchasing a television to illustrate the importance of a guarantee?
-The speaker uses the television example to show that without a money-back guarantee, customers are less likely to make a purchase due to the risk involved. A guarantee makes the offer more appealing by reducing this risk.
Can you explain the 'Guarantee Minus Difference' (GMD) and how it works?
-The 'Guarantee Minus Difference' (GMD) is a type of guarantee where the agency refunds the client only for the leads or results that were not achieved, rather than the full amount. It places a value on each lead and refunds the client for the shortfall, protecting both parties.
What is the 'Work to Result' guarantee and how does it benefit the client?
-The 'Work to Result' guarantee is a commitment to deliver the promised result regardless of the time it takes. If the agency fails to meet the promised number of leads or results within the contract period, they continue to work for free until the result is achieved, ensuring the client is not at a disadvantage.
What are the potential risks associated with offering a 'Money Back' guarantee?
-The 'Money Back' guarantee carries the risk of negative cash flow and potential damage to client relationships if the agency fails to deliver the promised results, as clients may receive services for free.
How does the 'Pay Per Appointment' or performance-only deal work, and what are its benefits?
-The 'Pay Per Appointment' or performance-only deal means the client pays only when results are achieved, such as when an appointment is made or an ad campaign generates revenue. This structure benefits the client by ensuring they only pay for successful outcomes.
What is the speaker's opinion on using a 'Pay Per Appointment' model for beginners in the agency business?
-The speaker advises against using a 'Pay Per Appointment' model for beginners due to the high risk and potential cash flow issues. It requires a deep understanding of the client's business and strong internal structures to manage the risk.
What are the considerations for an agency when offering a performance-based deal?
-When offering a performance-based deal, an agency must consider factors such as the client's gross margins, the cost of advertising, and the overall business function to ensure they can deliver on the promised results without incurring losses.
How does the speaker suggest an agency can transition from being just another agency to a reliable and trustworthy one?
-The speaker suggests that by implementing the right guarantees, an agency can build better relationships with clients, sign more deals, and over time, develop a reputation that makes them a reliable and trustworthy entity in the industry.

Outlines

00:00

🚀 Embracing Competition with Guarantees

The speaker introduces the competitive nature of the agency space and posits it as an opportunity rather than a threat. They argue that competition can enhance visibility if leveraged correctly. The key to standing out is the strategic use of guarantees, which can transform an offer into an irresistible one. The speaker promises to share four proven guarantees that can be implemented immediately after watching the video. These guarantees are part of a larger set taught in the 'Agency Accelerator' program, which has yielded significant results for students, as exemplified by Armando, who scaled his agency's revenue significantly in a short period. The speaker emphasizes the importance of guarantees as a risk transfer tool, making clients feel they have everything to gain and nothing to lose.

05:00

🛡️ Types of Guarantees for Client Relations and Business Protection

This paragraph delves into the different types of guarantees that can be used to secure client relationships and protect the business. The first is the traditional money-back guarantee, which involves refunding clients if the promised result is not achieved. However, the speaker expresses reservations about this model due to its potential to strain client relationships and incentivize underperformance. The second type, Guarantee Minus Difference (GMD), offers a more balanced approach by refunding only the value of unmet promises, thus maintaining a fair exchange. The third is the work-to-result guarantee, which extends service time to fulfill the promise without additional cost. Lastly, a performance-based payment structure is introduced, where clients pay only for results, which, while attractive, may lead to cash flow issues and requires a deep understanding of the client's business model. The speaker advises caution and a tailored approach based on the agency's experience level.

10:01

🌟 Implementing Guarantees to Elevate Your Agency's Reputation

The final paragraph emphasizes the importance of implementing the right guarantees to enhance an agency's reputation and ease the client acquisition process. By offering strong guarantees, agencies can build trust and reliability, setting themselves apart in a competitive market. The speaker encourages the audience to take action, apply the discussed guarantees, and transform their relationships with clients. The goal is to evolve from being just another agency to becoming a well-known and trustworthy entity. The speaker concludes by motivating the audience to take the necessary steps to achieve this transition, expressing support and confidence in their success.

Mindmap

Keywords

💡Competitive Space

The term 'competitive space' refers to an environment where there is a high level of competition among participants. In the context of the video, it is used to describe the agency space, which is filled with many players vying for success. The script suggests that this competition can be viewed as an opportunity for agencies to stand out rather than a threat.

💡Guarantee

A 'guarantee' in this video is defined as a promise made to a prospect before they become a client, based on a particular result. If the result is not achieved, the agency bears the consequence. It is a key concept in the video, emphasizing the importance of transferring risk to build trust and make an offer more appealing. The script discusses various types of guarantees as strategies for agencies to stand out.

💡Risk Transfer

Risk transfer is the process of shifting potential losses to another party. In the video, it is related to the concept of guarantees, where the agency takes on the risk of not delivering the promised results, thus making the client feel secure and protected in their decision to engage with the agency.

💡Money Back Guarantee

A 'money back guarantee' is a common type of guarantee where clients are promised a refund if the service provider does not fulfill the promised result. The video uses the example of a lead generation agency, where if 20 leads are not delivered, the client would receive a full refund of their payment.

💡Guarantee Minus Difference (GMD)

Guarantee Minus Difference (GMD) is a type of guarantee where the client is refunded only for the shortfall in the promised results, rather than the full amount. The video explains this as a lower-risk guarantee for agencies, using the same lead generation example, where a shortfall in leads results in a partial refund based on the value of each lead.

💡Work to Result Guarantee

A 'work to result guarantee' is a commitment to deliver the promised result regardless of the time it takes. The video describes this guarantee as one where the agency will continue to work for free until the promised result is achieved, thus ensuring the client that they will not be left without the expected outcome.

💡Pay per Appointment

In the context of the video, 'pay per appointment' is a payment structure where the client only pays when a specific result, such as an appointment or a lead, is generated. This is a high-risk, high-reward model for agencies, as it directly ties payment to performance.

💡Performance-Based Deals

Performance-based deals are agreements where payment is contingent upon achieving certain performance metrics. The video mentions this as a model where the agency worked off of performance metrics, charging a small retainer with the majority of income tied to performance outcomes.

💡Return on Ad Spend (ROAS)

Return on Ad Spend (ROAS) is a metric used to measure the revenue generated from advertising spend. The video discusses how this metric is used in performance-based deals for ad services, where the agency's payment could be a percentage of the revenue minus the ad spend.

💡Gross Margins

Gross margins are the profit a company makes after deducting the costs associated with making and selling its products, but before deducting other overhead costs. The video script mentions understanding a client's gross margins as crucial for agencies offering performance-based services, to accurately calculate their fees and ensure profitability.

💡Tire Kickers

In the script, 'tire kickers' refers to people who are not serious about making a commitment or investment. The speaker mentions wanting to avoid such individuals by charging a retainer in addition to performance-based fees, ensuring that clients are genuinely interested in the services provided.

Highlights

The competitive nature of the agency space can be viewed as an opportunity rather than a threat.

The ability to stand out increases in a competitive space, as exemplified by sports.

Using guarantees effectively can make an agency's offer irresistible and distinguish it from competitors.

A guarantee is a promise of a particular result, transferring risk from the client to the agency.

Guarantees can make clients feel they have everything to gain and nothing to lose.

Examples of guarantees include money-back guarantees and guarantees minus the difference.

Guarantee minus difference (GMD) provides a refund for unfulfilled leads at their value, reducing risk.

Work to result guarantee offers extra time to achieve promised results without additional payment.

Pay per appointment or performance-only deals transfer all risk to the agency and can be easy sales.

Performance-only deals can lead to cash flow issues and require robust internal structures.

Understanding the client's business is crucial when operating on a performance-only model.

Choosing the right guarantee model depends on the agency's level of expertise and confidence in results.

Beginner agencies might prefer the low-risk guarantee minus difference model.

Advanced agencies can offer bolder guarantees like money back or pay per results for easier deal closures.

Implementing the right guarantees can improve client relationships and agency reputation.

The speaker shares personal experience and strategies from running an agency for many years.