It’s your biggest question as an agency owner: how can we make more money without compromising our quality — or working every waking hour?! Boosting profitability can be tricky for a marketing agency as it’s not as easy to cut corners. Ultimately, there’s still a lot of work to be done, and hiring cheap designers or writers is rarely the solution. A sustainable, streamlined approach will go much farther! In this article, we discuss how automation, agile work, and on-demand services can help you reduce your expenses yet provide more value — and boost your profitability along the way.
Your marketing agency may have a lot of overhead: your advertising, equipment, software, and perhaps a physical office. All these expenses cut into your profits. After all, you can only charge clients so much for your expertise and the value you provide. So, what can you do if you want to increase your profit margins — especially in the COVID era?
The bad news is, there will always be expenses, and the costs keep rising along with everything else. That’s the nature of running a business. The good news is that you can reduce your expenses with some simple changes to your workflow and technology. Read on to learn how automation, agile processes, and on-demand creative services can boost your profit margins.
1. Marketing Automation
The more tasks you can take off your employees’ plates, the more time they’ll have to do high-value work. Even the processes of checking email and updating CRMs or project management systems eat into their precious time. Every hour they spend answering lead queries and configuring ads is an hour taken away from clients.
That’s why many agencies are embracing automation platforms. Depending on the sophistication of your chosen provider, you can automatically capture leads, follow up on messages, and send them brochures and proposals. Some platforms also integrate with messenger apps, ad platforms, and e-commerce features.
Automation can be a bit cumbersome and expensive to set up, but once it’s rolling, your team members will have fewer menial tasks filling up their day and more time to work on their core tasks. Plus, automation can help nurture and track leads, ensuring fewer potential clients fall through the cracks, and existing clients often have a better experience. This improves your agency’s reputation, converts more leads, and ultimately boosts your revenue and profitability.
2. Agile workflows
There is a new reigning philosophy in workplace management, and it’s derived from the Agile software development framework. This approach emphasizes iterative work, regular feedback, and cross-functional teams to help improve efficiency and cut down on project delays. Many marketing agencies are now implementing an agile framework to boost their productivity — and therefore their profitability.
For example, instead of siloing tasks into different departments (copy, design, ads, etc.), some agencies are now building project- or client-centered teams comprising people with complementary skill sets. This structure reduces the review time between project phases and helps ensure that client feedback is implemented quickly.
How your agency implements agile is up to you, but it’s worth considering if you’d like to streamline your processes, which in turn saves money and boosts your profits!
3. A Subscription-Based Creative Team
Your biggest expense, though, is probably your workforce. As the saying goes, you get what you pay for, and that’s definitely true for creative services, tech support, and marketing expertise. Your in-house team provides the core services, and you may have a collection of freelancers and/or interns you lean on for support.
But what happens if your agency takes on a project so big that your regular team is forced to work overtime — or pull themselves away from other tasks? Or if you need to juggle internal initiative (e.g. a rebranding or major stakeholder presentation) with client work? Or if someone goes on parental leave and you find yourself squeezed for resources?
Hiring another full-time employee — or even a part-time one — can be expensive and time-consuming.
Some agencies try to solve this problem by hiring full-time contractors or temp workers: people who provide services under your direction, yet don’t qualify for benefits. There are a couple of problems with this model even beyond its questionable ethics. First, some nations are revamping labor regulations in ways that would make it challenging to hire so-called “permalancers.”
Also, what if you only need short-term help? Finding contractors can also be a drain on your time. The rise of freelancing platforms has created a glut of gig workers, many of whom are not pre-vetted and may overstate their qualifications. Considering the client fees you pay on these platforms, the time needed to find and interview candidates, and the potential risks for poor performance, you may find it easier to just do the tasks yourself.
If you find contractors through professional networks such as LinkedIn or via personal referrals, you’ll probably find more qualified people. However, these are typically specialists who charge a premium for their services. They often run their own businesses, so you would actually be their client. Under emerging labor regulations, these arrangements are best for hiring consultants or creatives who provide a service outside your business’s purview, e.g. hiring a web designer if your agency does not provide web design. In other words, it’s often cost-prohibitive to outsource this way.
The solution is the new on-demand model for creative services. These platforms combine the best of both worlds: pre-vetted, highly qualified freelancers who deliver only the tasks you need. Companies using this model include Flocksy, DesignPickle, and 99Designs. Each platform offers a different combination of services, but all draw from a pool of talent, essentially crowdsourcing all clients’ projects. This decentralized approach helps ensure that contractors are compensated fairly, yet you, as the client, don’t need to spend the time and money to recruit and evaluate them. You pay a flat subscription fee to gain access to on-demand services whenever you need them.
It’s like the Netflix of creative services. Many agencies find that they spend up to 73% less on outsourcing when they use a subscription-based creative workforce.
Wrapping Up: what’s best for your agency?
Ultimately, boosting your agency’s profitability comes down to streamlining your workflow and hiring the best people in a sustainable way — and let the bots do the rest! Running on a shoestring budget often isn’t feasible, but you can dramatically reduce your expenses and enjoy better profitability with these tweaks to your technology and team structure.