By Danny Hall, Managing Director of FSE Digital, a marketing agency based in Essex, specialising in search marketing
Almost every company is currently under pressure to become more profitable, whether you’re already feeling the effects of the economic climate, or you’re preparing for it. When it comes to running a digital marketing agency though, you’re faced with clients in a similar position, who need you to achieve better results than ever for them, for the same or less budget. So how do you go about becoming more profitable, without compromising the work you do?
Choose the right tools
And make sure you use them! One pitfall many agencies face, is subscribing to a large stack of digital marketing tools, whilst in reality many of them have features that overlap, and a high percentage will end up unused, only remembered when you receive the receipt for them each month. Plan out what you want to gain from your tools before you choose them, and request free trials first to make sure you’re not wasting money. When you do settle upon the right tools for your business, make sure everyone is fully trained on them and you’re getting the most from them. After all, using data is how you’ll make informed decisions to get the best results.
It’s also worth looking into the range of free tools that are available, from Google’s own suite of resources such as Google Search Console, Google Analytics and the Keyword Planner, to independent tools such as Answer The Public.
Be open to other sources of revenue
An increasing number of agencies are realising it’s difficult to survive on client revenue alone. Plus, it leaves you vulnerable to situations like the one we’re currently facing, where marketing can be seen as a luxury expenditure. If you have the capabilities, why not consider offering web hosting to your clients, or allowing others to guest blog on your site for a fee, for example. Using this time to skill up and diversify the services you offer is also a great idea during lockdown, even if it’s just for bolt-on projects that give you a financial boost on an ad-hoc basis.
Work smarter not harder
When it comes to agency life, it can be easy to slip into autopilot mode, generating a high volume of content because that’s what you always do, working through a checklist of items for each client, and slaving away all hours to try and retain your clients. Instead, review your clients’ objectives and really think about what actions will help you see the biggest results, therefore keeping your clients satisfied, and protecting your current income whilst you pursue new opportunities. Remember to treat your own brand as a client too, so you can continue to grow and win new business.
Service clients according to spend
There’s probably not one agency across the country that doesn’t end up over-servicing one or two clients, but the problem is, often this is the same one or two clients every month. We’ll always go above and beyond for our clients, but if you find yourself operating at a loss for some companies, it’s time to take action.
Time management tools like Toggl are a good way to identify how much time is spent on each client across the board. You can also see what’s being done with this time, to help you establish whether it’s a responsibility on your end to spend this time differently, or have a conversation with your client about expectations. Which brings us on to the next point…..
Of course, if you’re regularly finding clients demanding more of your time and effort than is financially viable, you need to consider how you manage their expectations early on. Make sure in your initial conversations with a new client, that they fully understand exactly how much time and effort they can realistically expect for their money. Perhaps you won’t convert quite as many leads into sales, but you’ll retain more clients, have easier relationships with them, and work at a more manageable rate which frees you up to pursue (and handle) new work.
Have better visibility over cash flow
Just like any company, you can’t even begin to think about becoming more financially profitable if you don’t pay attention to cash flow. Knowing exactly what’s coming in and going out, and when, is the first step towards financial growth. It will make you think twice before agreeing to anything that has a financial cost attached to it, and allows you to plan ahead better and invest your profit more wisely.