Everything is great, except the money.
It’s not that the money isn’t flowing. It is. You’d just like more of it. I don’t blame you. I’d like more money flowing, too (hint, hint - boss!) But with an agency, there’s a danger to taking on more work to gain more profit - you risk overloading the team and needing to bring in new staff or freelancers to pick up the slack
In this article we look at ways to improve your agency’s revenue without simply taking on more clients:
Tip 1: Upsell additional services
As a design agency, you often get requests for business card designs. This is a pretty standard job you can whip out quite quickly, and the client then takes the design file and gives it to the printer of their choice. Sweet as, right?
Well, why not take care of the printing for the client? If you’re putting through a lot of these jobs, you can probably strike a deal with a local printer. You get the files to them, check the quality, and give the client a completed job for a nice price. Everybody wins.
Many creative agencies will offer a range of additional services that cost them very little in terms of time or investment but return a decent margin. These include services like:
Printing: print costs for posters, business cards, flyers, etc. Social Media: setting up Facebook, Twitter, LinkedIn pages, and sometimes packages for updating them. Complimentary services: For example, a web design agency offering copywriting services (through a contractor).
Tip 2: Market to a New Client Base
Maybe you don’t want new clients, but what you could think about doing is working toward replacing your current client base with clients who are willing to pay more.
The truth is, some businesses will only pay a certain amount for design work or marketing, but others will pay a higher rate. Your local small business marketplace might not be able to afford more than $150 for a business card design, but by focusing on larger companies, or a specific industry (for example, hotels or tech companies), you could charge more than double the rate.
If you are considering marketing to a different type of client, here are some things to consider:
Think about where you might find higher-paying clients. Where do they hang out? What type of projects are they offering? Do you need to tender for jobs? Adjust your marketing strategy according to your research.
Focusing on a specific niche or type of business could allow you to charge significantly more. Many agencies have had success marketing as specialists to one specific market; For example, NZ Agency 7 Group have a US office dedicated to creative services for dentists.
Working virtually allows you to work with clients all around the world. This means you can market to clients in a country / city where the average price for creative work is significantly higher.
Tip 3: Raise Your Rates
If you want a simple, no fuss, instant way to improve your agency’s bottom line, then you need to raise your rates. Yes, really.
If the thought of increasing rates has you shaking in your Jimmy Choos, and you’re suddenly feeling like you really wish you hadn’t had that quiche for breakfast, then it’s probably well past time you raised your rates. When was the last time you raised your fee? Are you accounting for inflation? For the increasing cost of doing business? Are you valuing your work as high as you should?
Many agencies are doing away with the cost-per-hour model altogether, instead offering a full cost for a specific package and practicing what we call “value pricing”. To learn more about how to price at your agency, sign up for Jason Blumer’s pricing webinar. Jason is a CTA for creative agencies and he has tons of advice about the best way to price for success.
Tip 4: Team up with other companies
One of the ways many agencies propel themselves up the chain is to partner with other companies to cross promote. For example, a friend of mine runs a local graphic design agency that teamed up with a property development firm. Now, the agency produces beautiful glossy brochures for various property development companies around the country for a premium fee.
Working in partnership with another firm can have a huge number of benefits. Mainly, you will instantly be doubling your professional network and marketing reach. Two firms offering complimentary services can often charge a premium for their combined packages; most clients are willing to pay more for convenience and quality.
Tip 5: Rob a Bank
Well, we didn’t say all the ideas would be legal, did we?
Disclaimer: WorkflowMax does not encourage nor condone bank robbery.
So is your agency ready to get serious about pricing and look for new ways to improve profits? There are plenty of ways to improve profits without expanding too big. Stay tuned for our upcoming agency pricing webinar with Jason Blumer of Businessology for more details.