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Growing an agency requires hard work, dedication, and killer accounts and sales teams. The inclination of most CEOs or managing directors intent on increasing their bottom lines is: more. More clients. More projects. More employees.
Unfortunately, more is not always better. Some agencies become more profitable when they fire clients. Others operate better with fewer but higher paying projects. Underperforming employees often cost firms more money than the revenue they generate. To increase your billings while taming your workload, here are 12 strategic tactics.
1. Build lasting relationships
Doug Pinckney, president of Pinckney Hugo Group, an integrated marketing communications agency, recommends agencies make an effort to build long-lasting relationships that span careers, not just a single engagement. As a reliable provider, you can expect that clients will always want to work with you, wherever they are employed. Pinckney says, "Several clients have worked with us at one company, and have continued to work with us after moving on to new jobs at other companies."
2. Do good work
Of course, what you and the client accomplish together matters. Pinckney believes, "The best way to get new clients is to do great work that leads to outstanding results for our clients. The more successful our clients are, the more successful we are." By delivering results, you create opportunity for follow-on engagements and positive referrals.
3. Focus on their profits
Seb Dean, director of digital agency The Imaginaire Online, says, "The way we generally increase billings within our agency is based on our success for the customer." For clients' search engine marketing efforts, Dean explains, "we'll generally look to get the campaign to a profitable point as early as possible within a geographic location." When agencies help their clients make money, they can easily justify ways to tack on additional services and increase billings.
4. Help with planning
When you understand the conversations that dominate boardrooms, you discover what your client and his team really wants allowing you to address those needs in your sales pitch. But Michael LeBeau, CEO and founder of agile marketing agency Scrum50 knows you can accomplish more when you are an active participant in those get-togethers. LeBeau advises agencies to "push to get involved in the annual planning process and demonstrate strategic leadership... More opportunities present themselves when you find yourself at the planning table."
5. Leverage partner referrals
Prospecting and sales are laborious exercises. Agencies have enough on their plate; finding leads, nurturing them and closing sales are among the responsibilities agency managers wish they did not have to do. Fortunately, you may leverage other professionals in your network to circumvent the traditional sales process and secure new contracts. At Atomic Design & Consulting, a digital marketing agency, partner Jackie Bese and her team form relationships with smaller agencies and independent consultants who offer complementary, not competitive, services to refer work among themselves.
6. Realign billings
Almost every client engagement features a bit of scope creep. While some clients are considerate when they ask for help on things that extend the scope of a project, others abuse your working relationship by consistently requesting support on a number of special 'favors.' To ensure they get paid for the work they do, Bese and her team at Atomic Design & Consulting "review [billings] on an at-least annual basis to determine if our billable rate and hours are in-line with the services that we provide for our clients. If we find that we are over-servicing a client in hours, we will meet with them and discuss what has been happening and what will need to change in order to continue to meet their billing & performance expectations. That can end with either a reduction in hours, change in expectations, or an increase in the retainer to cover the work being performed."
7. Regular rate adjustments
As the market evolves, so should your pricing. Once or twice a year, agencies should make scheduled rate adjustments which are commensurate with the value you offer to clients and remain competitive with current market rates. Companies that maintain the same fees for years fail to offset rising costs, including inflation, and greatly undervalue the services they provide to clients.
8. Sell to other divisions
Once you have your foot in the door with a client, think about ways you may parlay your success to secure projects with other divisions within your client's company, suggests LeBeau of Scrum50. Leverage warm, internal referrals to close new deals.
9. Stay paranoid
Pinckney of Pinckney Hugo Group does not let complacency ruin his business. "Even after a client has been with us for a while, we stay paranoid. In our business, clients can come and go quickly through mergers and personnel changes, so we must be flexible and ensure they get a strong return on their marketing investment."
10. Take on small projects
Most agencies cannot afford the risk or the wait associated with closing enterprise-level contracts. That is why LeBeau of Scrum50 proposes small projects he knows his team "can knock out of the park." Most clients must consult their boss for approval on big-budget expenses. But instead of deliberately walking into red tape, spend time selling smaller projects, which are easier for prospects to approve. "[Clients] won't lose their job on the small stuff," LeBeau notes.
11. Use email marketing
Keep direct conversations focused on the client's needs and the engagement. Use email marketing to prompt customers to ask you about your expertise and the other services you offer. "Email marketing can be used to frequently share case studies and remind existing clients of other services you may offer that they are not currently using to their advantage," says Bese of Atomic Design & Consulting. Almost organically, clients will request more information or an estimated quote.
12. White-label third-party services
Instead of hiring additional staff to provide a whole host of new services, partner with other vendors you know and trust to upsell clients on their offerings. White-label third-party services and sell them as your own. Of course, instead of doing the work yourself, you pass on the requirements to your vendor-partners so you earn money simply by closing and managing the account.
Bonus: Yearlong commitments
Month-to-month arrangements create a lot of unnecessary work for agencies and their clients. The time spent on invoicing, issuing payments and updating contracts is inefficient. Instead, offer clients the opportunity to commit to a yearlong relationship in which they pay a huge lump sum upfront to retain your services for 12 months. Incentivize them with a discount or free extras. Explain that they will also protect themselves from future rate increases too. With each yearlong commitment you close, you save energy and time which may be otherwise used to increase billings elsewhere.
This post originally appeared on the iMeet Central blog and is republished with permission.
Danny Wong is the co-founder of Blank Label, an award-winning luxury menswear company. He is also a digital marketing consultant and freelance writer. To connect, tweet him @dannywong1190 or message him on LinkedIn.