We’ve recently seen “bubbles,” or sharp rises in value followed by drastic depreciation, in several popular industries. In the digital marketing world, we’re seeing another example of this economic phenomenon: The inbound services bubble. And whether you realize it or not, we’re already in the midst of the crash: If you’re not already looking for ways to mitigate its impact, you are running out of time.
What is it?
To put it simply: Because of the skyrocketing popularity of digital marketing, the inbound space is unsustainably crowded. New agencies and marketing consultants pop up every day, and the increased quantity of all these providers means the bubble is already popping: When was the last time you were able to raise your prices for services like blog posts or graphic design?
Further, even while prices drop, competition grows. One of our CMB community members reported that 40% of one of his client’s online form submissions, intended to be for new customers, were from other agencies looking to poach the business.
Why did the bubble happen?
There are 3 main reasons for the inbound services bubble (and resulting price drop):
- A technology explosion: HubSpot is one of only around 5,000 other marketing automation platforms that have exploded onto the scene in recent years.
- An expansion of the freelance labor force: More and more companies are outsourcing marketing services tasks to low-cost international freelancers, who can charge a fraction of what someone in the western world would and still make a comfortable living.
- The rise of outsourcing - Many U.S. corporations remember the painful layoffs of the recession and are still reluctant to add new full time jobs, especially when they could outsource to authoritative, successful performers. Deloitte says that today’s companies aren’t just outsourcing for cost savings - they are looking to outsourcing as a way to drive innovation.
How can I overcome the bubble?
Put simply: Instead of selling the same commoditized services as everyone else, you have to sell a unique business process - a strategy - that can get results for your clients. By selling a process or a strategy instead of a commodity, you can take your business out of the race to the bottom for inbound services.
During the industrial revolution, the most successful and highly-paid professionals were the ones who created new business processes, not the employees who performed the work. You can either be a “factory worker” who provides an easily replaced, commoditized service, or you can pioneer new processes to capitalize on the true opportunity.
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