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How's your agency's pipeline?

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Summary

This article discusses how the combination of cratering expectations and interest rate hikes have caused serious lumpiness in agency pipeline activity. It explains that clients focus on expanding margins when rates are high, while they focus on revenue growth when rates are low. It also looks at the impact of interest rates on businesses of different sizes, how to adjust marketing and sales content according to these changes, and offers resources to help agency owners better understand the changes in the market. It also provides information about upcoming events related to the research and strategy for digital agencies and the 2023 Digital Agency Industry Report.

Q&As

How has the combination of cratering expectations and interest rate hikes affected digital agency pipelines?
The combination of cratering expectations and interest rate hikes have changed what companies are buying (margins vs growth) and caused serious lumpiness in agency pipeline activity.

How does the CEO Confidence Index provide a gauge of executive expectations?
The CEO Confidence Index provides a gauge of overall executive expectations by tracking the sentiment of CEOs.

What does low interest rates drive the average cost of capital for U.S. publicly traded firms to?
Low interest rates drive the average cost of capital for U.S. publicly traded firms down to 4%.

What happens to a company's value of incremental growth when interest rates are high?
When rates are high, the value of incremental growth decreases.

What should digital agencies adjust in order to better communicate the value of their services?
Digital agencies should adjust their marketing and sales content to focus on expanding margins when rates are high, and focus on revenue growth when rates are low.

AI Comments

👍 This article provides great insight into the current market and how interest rates affect the decisions of businesses. It provides helpful advice on how to communicate value to potential clients to ensure success in a challenging market.

👎 This article is overly complicated and hard to follow. There are a lot of finance and economics terms that are difficult to understand and the article lacks clarity.

AI Discussion

Me: It's about how the combination of cratering expectations and interest rate hikes have caused serious lumpiness in agency pipeline activity. And it talks about how clients will likely focus on expanding margins when rates are high and favor revenue growth when rates are low, and how agencies should adjust their marketing and sales content accordingly.

Friend: That's interesting. It sounds like agencies will have to be flexible and responsive to changes in the market.

Me: Yeah, they'll have to be able to adjust their strategies quickly and be prepared for changes in their target market. They'll also need to have conversations with their clients about their goals and if their focus has shifted lately, and make sure that what they learn is communicated to their revgen team. Finally, having a properly designed repeatable revgen system will help mitigate some of the slowness.

Action items

Research the CEO Confidence Index to gain insight into executive expectations.
Analyze the cost of capital for various industries to understand how rising interest rates may affect clients.
Adjust marketing and sales content to reflect clients' focus on margin expansion or revenue growth, depending on the current interest rate environment.

Technical terms

Pipeline: A pipeline is a series of steps or stages that a customer goes through when making a purchase.
TL;DR: TL;DR stands for "too long; didn't read" and is used to indicate that a text is too long and the reader should skip to the summary.
WACC: WACC stands for Weighted Average Cost of Capital and is a measure of a company's cost of capital, which is the cost of obtaining funds to finance its operations.
CapEx: CapEx stands for Capital Expenditure and is the money a company spends to acquire or upgrade physical assets such as property, buildings, or equipment.
CEO Confidence Index: The CEO Confidence Index is a measure of the confidence of CEOs in the economy. It is based on surveys of CEOs from around the world.
RevGen: RevGen stands for Revenue Generation and is the process of generating revenue for a business.