Four Archetypes of the Agency Value Compass

Written By Brian Kessman

The Value Compass identifies four common archetypes in how agencies create and capture value. Each reflects a distinct set of strengths and risks—providing a lens to see where you stand today, and what it will take to move forward.

The four archetypes:

🔴 Busy by Design (Starting Point for Most Firms)

  • Agencies built on effort, not outcomes.

  • Broad, capability-driven positioning with little focus or differentiation.

  • Revenue tied to hours, roles, and utilization.

  • Growth requires more headcount, creating margin pressure and burnout risk.

  • Engagements are highly custom, with reactive new business.

  • AI used mainly for internal efficiency, not market-facing differentiation.

🟡 Scaling with Strain (Evolving Firms)

  • Agencies making progress away from billable hours, but still weighed down by legacy ways of working.

  • Positioning remains broad, framed around services and capabilities.

  • Some fixed fees in place, but still linked to time and deliverables.

  • Solutions and frameworks exist, but packaging and consistency are uneven.

  • Revenue growth tied to volume of work rather than outcomes delivered.

  • Clients push for lower fees; procurement pressure remains high.

  • Delivery teams carry much of the burden of evolution and growth, creating operational strain.

🟡 Expertly Undervalued (Evolving Firms)

  • Agencies respected for their expertise but unable to fully capture the value they create.

  • Sharper positioning in a niche or category; recognized credibility in market.

  • Still billing for time or effort, limiting pricing power.

  • Revenue tied to senior experts and custom scopes.

  • Strong reputation, but leaving significant margin on the table.

  • Scaling still requires more people and senior involvement, draining leadership capacity.

  • AI enhances expertise but not yet monetized as differentiated IP.

🟢 Distinctly Scalable (Evolved Firms)

  • Agencies built to scale expertise and outcomes profitably, with gross margins 35–65%+.

  • Clear, outcome-focused positioning around high-value client problems.

  • Productized, repeatable solutions anchored in business impact.

  • Pricing models aligned to outcomes—fixed fees, retainers, subscriptions, or licensing.

  • Revenue scales without adding headcount with 2-3x AGI/FTE

  • Strong recurring revenue and 2-3x faster growth.

  • AI and IP embedded in offerings, creating defensible differentiation.

Brian Kessman

Brian Kessman works with agency leaders who are ready to think differently and unlock their firm’s full growth potential.

As Lodestar's founder and principal consultant, Brian helps agencies move beyond billable hours and commoditized services to scalable, profitable models centered on client outcomes.

His strategies tackle the toughest agency growth challenges: redefining market position to attract premium clients; developing value-led pricing approaches to increase deal size; and creating diverse revenue streams for predictable income.

His programs deliver results. A full-service agency nearly doubled revenue from premium clients (from 36% to 73%) and increased overall income by 39%. A content agency grew a retainer deal size by 50%. Other firms boosted margins by optimizing their client mix, redesigning their offerings, and modernizing operations.

Brian is an inaugural member of the 4As Expert Network, and his transformative approach has been shared across the industry through presentations for Mirren, the 4A’s, AMIN, Magnet, Worldcom, and other top industry organizations. Combining hands-on and advisory expertise, he is a trusted partner to leadership teams looking to break free from outdated models and thrive in an era of disruption.