If you're looking to dramatically increase profits for your agency, then you need to make every hour and every dollar count. Here are 12 proven strategies that will help you optimize your utilization rate, create a predictable lead channel, create more stable revenue streams, and make growing existing accounts a priority. To optimize your utilization rate, invest in time tracking software. A time tracking software will tell you exactly how and where your employees spend their time. That way, you won't pay them to sit back and accumulate hours; you'll only pay them for the time they spend working on the projects that have been assigned to you. Along the same lines, another quick solution you can do that will affect the profitability of your agency is to reduce the response time of potential customers.
A recent HBR study showed that online leads have a short life span, many companies let them go cold, and some companies (23% of respondents to be exact) didn't respond to the prospect at all. To prevent overmaintenance, use a project management tool with robust reporting tools. This will provide you with real-time feedback on the progress of a project. Additionally, use the Net Promoter Score (NPS) survey to measure customer satisfaction. The NPS is a survey that asks, usually on a scale of 1 to 10, how likely your customers are to recommend you to friends and family.
Anyone who rates you very well is considered a brand advocate and you can usually count on these people to help spread the good work.Content creation is also an important factor in increasing profits. Every day, more and more companies realize that, in order to compete and win in today's environment, they need to produce lots of great and engaging content. These companies are rapidly shifting more of their marketing budgets away from traditional marketing methods to content. This presents an incredible opportunity for smart marketing firms who want to become specialists in the development of personalized content. Your customers NEED quality content to succeed.
If they don't understand this now, they will do it in a year or two when their competition starts to pass them by. You have the ability to provide your customers with the personalized content they need to compete and succeed in today's environment dominated by search and social media.The profitability of the advertising agency is guaranteed by monitoring its event and activity time. To increase profits, agencies should keep track of their billable versus non-billable hours. It is necessary to keep track of time for a while to ensure that everyone is on board the system. An agency can establish the impact of tracking billable and non-billable time on its profitability through accountability for appropriate hours.
First, you'll want to gain experience. As the CEO of a marketing agency with virtually no marketing experience, you would find it difficult to make interesting recommendations to your customers. When it comes to contracts, make sure you get enough money up front to cover your costs. Usually, if you're going to have 60-70% on your project, getting 50% upfront should be enough to pay for the entire project delivery. And if the customer screws up and never pays you again, at least you're not going to be in the red.
So try to get an initial deposit of 50%. And then do your best to structure the contract so that there are limits on revisions and extensions of contract time. Finally, use points-based pricing models for projects. Each project is assigned a total of fixed points (for example, blog post = 3 points) based on value creation rather than hourly estimates. Point totals are standard across all customers and are determined by the Fibonacci sequence (i.e., 1-2-3-5-8-13).These 15 tips will help maximize your agency's profits.
To expand profitability further, focus on customer retention as it helps save costs while looking for new customers increases sales and revenue streams. In his work as a speaker, podcast presenter and consultant specializing in optimizing agency profitability, he has helped hundreds of agencies around the world improve profitability and cash flow in their businesses.