12 Toughest Challenges Agencies Face (and Tips to Overcome Them)

According to the U.S. Bureau of Labor Statistics, around 20% of businesses are doomed to fail within the first year. There are many things that can stall or ruin even the most promising business – from insufficient cash flow to external factors (like the recent pandemic).

Yet, there are very specific challenges that service providers – agencies – face. Having talked to a few dozen established lead generation agencies recently, I’ve noted some common pain points they voiced. 

Here’s a list of 12 typical agency problems to be aware of – along with some tips to overcome them.

Customer-related challenges

While it may seem to you that the key challenge is to find any clients for your agency (which is a topic for a separate blog post), it’s only half the battle. There are several problems B2B agencies often run into in their daily interactions with those customers. 

1. Identifying, managing, and communicating customers’ ICPs

The main challenges in B2B prospecting for agencies come from the need to work with a wide range of companies’ buyer profiles.

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“Some clients will provide you with a list of highly detailed criteria that will make your life easy. Other clients won’t have a clue as to who their ideal customer is and will expect you to be their “de facto CEO” to figure that out for them.”

“If a client doesn’t know who their target customer should be, they may want to frequently change the research criteria or add specifications that disqualify prospects you’ve already found. This can leave the research you’ve already done for them in the dust and force you to have uncomfortable conversations about additional costs for the research.”

Michael Bassin

Co-Founder & CEO of ScaleUpSales

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On top of that, agency leaders will also have to communicate those criteria and requirements to their teams – and make sure they deliver on the customer expectations.

To prevail over these challenges, Michael suggests the following tips:

• Make sure you fully agree on the detailed list of prospect criteria (that won’t change every day) before you proceed with the research. 
• If you need to loosen the ICP, offer specific suggestions that could expand the potential target audience.
• Create a “master sheet” of requirements that your team and the client can access. Encourage researchers to ask questions if they are not sure whether the prospect meets the criteria.

2. Reporting and communicating the results to the customer

When working with an outside sales team, there’s nothing wrong with your customers wanting to feel in control. That is why comprehensive reporting is a must for any agency. But there are some problems.

First of all, you need to agree on the deliverables. Depending on the specifics of your work, that could be anything from a targeted contact list ready for outreach to booked demos. And you should clearly document those deliverables along with the corresponding KPIs or specific sales objectives so there are no questions. That should be stated in the service agreement (or the terms of the corresponding subscription plan).

Next, we have the technical part where you need to implement or set up a comprehensive dashboard for your clients to track the progress of your efforts. That could be done via dedicated agency management tools or directly through your sales engagement platform (depending on your stack).

Another challenge here might be related to the deadlines. Extensive lead research takes time and some over-eager customers might rush you to deliver a list within 24h causing unnecessary stress to the researchers who may eventually feel disappointed if they can’t meet their deadlines. In this case, it helps to be transparent about your timelines or break down the process into several iterations. 

3. Managing client expectations

The next problem may emerge from the previous one. If you fail to communicate the deliverables and deadlines with the customers, you can find yourself struggling to meet their expectations.

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“Managing client expectations is one of the biggest challenges. Clients sometimes have unrealistic expectations of what can be achieved within a specific timeframe or budget. The solution to this problem is to put the client at the forefront of all decision-making and communication. This means setting clear boundaries and being transparent about what can be accomplished. “

“Don’t promise anything that will be impossible to achieve or will be made but not at 100% of your potential. In the book How to Sell Anything to Anybody, there’s a real story of a car salesman who directs a customer to his competitor because he doesn’t sell the kind of car the client is looking for.”

“You think – a completely silly thing! In fact – brilliant.”

“The key to success is to simply don’t ever promise anything that will be impossible to achieve. Just be honest. Nowadays trust means more than one transaction.”

Jakub Kopacz

SEO & Content Specialist, Concept21

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4. Churn and cash flow problems

As any business, agencies are bound to lose some of their clients along the way. There are many reasons for that, as well as many challenges that come with high churn – the main one being cash flow problems.

First, you will need to find a new customer to keep your team busy (and be able to pay their salaries). Being benched for a long period of time is no fun, so you might risk losing some of your staff. Two possible solutions to this agency challenge would be to quickly find a new client or compensate your team, including the sales commission, out of your own pocket. Neither is an easy or pleasant solution, so it’s best to focus on customer retention.

Secondly, many tools you will rely on in your daily operations, e.g., a sales engagement platform or data providers, might have a fixed number of seats or credits within the current plan. So if you’re losing a client, you might still need to pay for the service you don’t use to the fullest.

A good solution to this problem is offered by some SEPs (including Reply). When a client leaves, you can easily cut the number of seats in your current pricing plan getting a refund in the form of credits. You can later redeem those credits to add more seats or use them for additional services like email validation or data search, so there’s practically no waste.

Organizational problems

As hard as it may be to deal with clients at times, it can be even more challenging to build and run your internal team as an agency. There are several issues that agency managers face within their organizations.

5. Hiring and retaining top talent

As with any other form of outsourcing or outstaffing, there’s a lot of stigma related to working at an agency as a lead generator. It is often considered a less rewarding and more stressful job compared to being a part of an in-house team. 

Another reason why sales professionals might avoid joining an agency is the limited career path. You simply can’t grow into an executive or switch to being an AE if there are no such roles at an agency.

Lastly, as mentioned above, customers may churn so an SDR can be forced to switch projects frequently or even be put on the bench at any time. And there’s not much you as an employer can do about it.

But there are a few ways to fight high team turnover, according to the Forbes Agency Council members, from introducing a clear process for rewarding your your SDRs and competitive compensation to putting them in charge of the outcomes to make them feel a part of the team or even hiring freelancers with custom contracts for more flexibility.

6. Team collaboration 

Any sales organization depends on clear communication and collaboration. There are different roles handling different tasks that should be perfectly aligned on the common goals to bring the desired outcomes to both the client and the agency.

One good way to facilitate collaboration between your team members is through regular check-ins. With properly allocated responsibilities and comprehensive objectives, this would be enough to have everyone on the same page throughout the project.

It would also be beneficial to develop and document checklists and guides for different processes to minimize the unnecessary back and forth. For example, you can adopt the corresponding checklists to streamline the hand-off processes between the researcher, QA, and the outreacher.

Technology can also come in handy making your daily collaboration – like sharing templates/snippets, managing common lead lists, or working with a unified inbox – a breeze. 

A quick tip here: As an agency, it’s best to choose the tools that provide flexible roles and permissions to build various processes and allocate responsibilities as needed. For example, this will help you as a manager have more power to track the activities across your team and jump in as needed, while the rest of the team can focus on their specific tasks.

7. Team productivity and motivation

SDRs not hitting daily quotas is a common pain for many sales managers, especially for agencies that have to report to the client about it. This problem is often caused by a lack of motivation and low team productivity. 

Whether your team is procrastinating or simply lacking some basic means to ramp up their productivity, there are a few things I personally could recommend to boost team morale and motivation:

• Minimize distractions. While regular sync-ups are absolutely necessary for effective teamwork, you can also pick one day per week to allow everyone to focus on their current tasks with no distractions. 
• Encourage autonomy. Avoid micromanagement at all costs and give your team some freedom to bear responsibility for the outcomes. This way they will be more invested in the process.
• Maintain healthy competition. Agencies tend to create a very competitive environment for their SDRs (which might be good for some but can also lead to burnout). So don’t just celebrate top-performers but also find a way to motivate the rest of your team. 
• Offer personal coaching. Although the career path within an agency might be limited, it’s not an excuse to let your team’s skills get stale. Ongoing coaching and training are very important and can help you keep your team engaged and motivated.

8. Team management and visibility 

Running a single sales team is no easy job. Running an agency with several teams all working for different clients is even harder. Team management and visibility into your team’s activities represent a key challenge here.

Being able to monitor each employee’s tasks can give you the transparency you need to effectively manage your team. Some agencies might even use time tracking for that. However, it’s important to note that hours spent don’t always equal the job getting done.

If you can also get some insights into their recent productivity along with their activities, this will allow you to adjust the workload and eliminate any bottlenecks that might be hurting your agency.

As a leader, you will also have to manage multiple user accounts and deal with tons of logins, passwords, and subscriptions. Password managers like 1Password and tools with access control software like Okta might do the trick. But keep in mind the subscription fatigue that comes with a large tech stack.

Technical challenges

Any modern business runs on tech. And agencies are no exception. The right software can help you source your data, automate outreach, get insights into your tasks, etc. But it also can introduce additional limitations or challenges to be aware of.

9. Choosing the right tools for your stack

As mentioned above a few times, having a solid sales enablement toolkit can help your agency solve a number of problems – from team collaboration to reporting to the customers. Yet building and managing that stack can be a challenge of its own. 

Having to buy dedicated tools to handle email outreach, calls, social touchpoints, deliverability, calendar, data and so many more aspects of the SDR work is not just a huge investment but also a real headache for managers. 

Using feature-rich, all-in-one platforms might be a better choice here. But be aware of the drawbacks of such tools. For example, if it’s a CRM that offers sequencing capabilities, you can’t expect it to compare to the dedicated sales engagement tools in the quality and range of features. The same goes for the multiple email finders out there.

One more challenge that agencies face with their software stacks is the need to integrate those tools with each other. Being able to seamlessly move the data from the B2B database to your CRM and SEP is just one of the use cases. 

Ideally, all the tools you’re using should be able to communicate with each other. In this case, no-code integration platforms like Zapier come in handy.

10. Data quality and email deliverability

Some clients come to you with a mailing list that they have either built or bought. What they fail to understand is that a very large percentage of these email addresses might not really be valid while some information (like industry or headcount) might be outdated or simply incorrect. So when you try to email them, this can drastically affect your domain health and be extremely detrimental to your campaign. 

This means having a validation team in place to validate each and every lead before you move on with outreach is absolutely crucial.

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“Deliverability and list quality challenges are crucial to overcome when conducting email outreach campaigns.”

“Firstly, it’s important to understand the pain points of the target audience to ensure that the product fits their needs. Secondly, having a strong deliverability structure and daily monitoring processes is essential to avoid emails going to spam. Thirdly, validating email addresses is critical, as many client lists may have invalid email addresses which will affect the domain health and be detrimental to the campaign. Fourthly, QA is also important to eliminate companies that do not match your ICP from the list and avoid sending emails to the wrong industry.”

“To overcome these challenges, a combination of having a strong understanding of the target audience, having a deliverability structure in place, validating email addresses through a validation team, and having a strong QA team in place is key to a successful email campaign.”

Shira Simmonds

CEO, SSC Digital

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Another aspect of this very problem is related to the overall health of your email accounts. We’ve seen too many agencies burning through domains, unable to keep deliverability in check as they scale their outreach efforts. Using reliable email warm-up and other deliverability tools in place is an absolute must for agencies.

11. Intelligence and automation

As you grow as an agency, you’ll inevitably face the need to optimize and streamline your processes. Simply ramping up the number of sent emails or customers isn’t enough to be successful. 

As your SDRs send more emails, they might find themselves swamped with responses, unable to sort through your inbox and effectively respond to all of them. If they manage to handle all the responses, some hot opportunities might fall through the cracks along the way.

You also need to work smarter, relying on sales insights and advanced automation powered by AI.

There are tons of practical use cases for AI in sales – from prioritizing leads and handling email responses to creating full-fledged, custom sequences from scratch. 

Sales intelligence can offer visibility into contact engagement so your SDRs can go after the most engaged leads, prioritizing their efforts accordingly. This can also help them figure out which segments of the audience are the most likely to respond and better tailor their targeting.

12. Scaling prospecting and outreach

Scaling an agency is a challenge of its own. But there are several aspects to it, one being the technical one.

We’ve already touched on the team management problem related to running multiple accounts across different tools. But there are more daily challenges that agencies face with their tech stack as they scale their activities, including account limits (email IDs per account or sequence for SEP, credits for data provider, etc.).

There are many workarounds to solve those problems, like creating multiple accounts or duplicating sequences for multiple sender IDs. But we would strongly recommend picking a software provider that simply doesn’t have those limitations.

It’s also worth mentioning that there are certain limits that don’t depend on the software provider. For example, LinkedIn has pretty strict automation rules and activity limitations to keep the platform free from spam. And there’s not much you can do about it other than tailoring your outreach sequences accordingly.

Ramping up your email sending volumes also requires a cautious and well-planned approach, including a gradual increase in the daily sending limits (while making sure the delivery and engagement rates remain the same).

Final word

Whether you’re a digital marketing, design, or lead generation agency, there are hundreds of hoops you will have to jump through on your way to success. 

Having a reliable partner by your side might help you solve a lot of those challenges and make your path a lot easier. Reply offers a ton of useful features and tailored benefits to agencies around the world to help them scale their operations and keep their customers happy.

Learn more about Reply for Agencies and join our partner program to become the best-in-class sales service provider.