Testing New Waters

For agencies looking to expand their service offerings and capabilities, the typical path involves taking on substantial risk. Want to break into a new vertical like public relations, paid media, branding work, or website development? Traditionally, that would mean hiring specialists in that area — a big investment of money, time, and resources.

But what if client interest or revenue projections don’t pan out as expected? You’re left holding the bag, paying salaries and overhead costs that aren’t yet sustainable. It’s an all-too-common scenario that quickly eats away at profit margins and stifles growth.


Expand Without the Risk

There is a smarter, lower-risk approach — strategic partnerships.

“If you want to grow a vertical, you have to create a certain amount of sustainable work,” says Brian Gerstner of White Label IQ. “You can do aspirational hiring, but that really messes with the numbers and reduces stability.”

The alternative? Find a partner agency or provider skilled in the new capability you want to offer. Bring them onboard as an extension of your team, letting them support that vertical through a variable cost model. You’re able to immediately provide expert-level services to clients without being saddled with long-term payroll commitments.

“If you can find a partner who’s there to work with you, educates you, and knows that your success and their success go together — that’s the benefit,” Brian explains.


Growing The Right Way

How does the process actually work? Let’s say your agency is strong in areas like brand strategy, content marketing, and web design/development. But you constantly get requests to also provide public relations capabilities that you don’t have in-house.

By partnering with a seasoned PR agency, you can start testing those waters. The partner handles the actual PR workload while you concentrate on selling, strategy, and project management. If the vertical takes off, you can steadily scale up by adding junior PR hires to your internal team first, then more experienced employees over time as revenue allows.

“You can get to that metric of two or three times revenue to justify a new hire,” says Brian. “At that point, you’re iteratively and strategically growing.” Taking this approach lets you ramp up organically based on demand instead of relying on risky hiring projections.


Onward and Upward

You may eventually outgrow the need for your particular strategic partner if you build out a full in-house team based on how that particular vertical is growing, and that’s not a bad thing.

“Losing the client at that point is not bad,” says Brian. “You just proved you can add tremendous value. All clients leave at some point, so why not help illustrate that roadmap?”


The Four Pillars of Productive Partnerships

For a strategic partnership to truly unlock this kind of sustainable growth, Brian emphasizes four key traits:

  1. Rapport and expertise – The partner deeply understands agency workflows and pressures. There’s a solid foundation of respect and trusted advisement.
  2. Over-communication – The partner is hyper-transparent, educating you on processes and skillsets to empower selling the new capabilities with confidence.
  3. Shared success – Both parties have a vested interest in the other’s growth. The relationship is mutually beneficial, not purely transactional.
  4. Adaptability – The partner adapts as conditions change, evolving responsibilities and processes for maximum efficiency and value.

If you find these traits in a strategic partner, you’re set up for a healthy, long-term partnership. As your agency evolves and potentially builds out that new vertical, both parties can collaborate on intentional, strategic decisions about restructuring the relationship or phasing it out completely as needed.

That’s the power of smart partnerships — providing low-risk runways for testing new service offerings, while allowing you to respond to client demands and quickly take opportunities to capture new revenue streams. A calculated, sustainable approach to growth is invaluable for ambitious agencies ready to expand their skills and impact.

To learn more about how agencies can test out new verticals without incurring substantial costs and risks tune in to this episode of The Progressive Agency Podcast to hear more from our guest, Brian Gerstner of White Label IQ.


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