If you run a digital design agency or marketing consult company, you’re either on dry land or you’re drowning. Far too often that’s the way it is with project work, and many agencies are familiar with this. Projects come in waves then dry up during periods of low demand, creating a feast-or-famine situation.
While there are a lot of great benefits to project work, this type of cycle makes it difficult to plan for the future. It often causes irregular income and fluctuating growth forecasts, which leads to uncertainty about future staffing, supply needs, and revenue.
To create a more stable, profitable environment agencies have to break out of the cycle. That doesn’t mean leaving project work behind entirely, but agencies should diversify the solution set that they offer to customers, focusing more on recurring revenue. This is actually easy to do. Agencies are exceptional at providing value, and there are many ways that they can offer additional solutions and produce more revenue.
3 Ways Agencies and Consultants Can Generate Additional Revenue
Method #1) Software Solutions
Software solutions are usually provided when agencies partner with software companies. Through the partnership, the agency receives a percentage of the monthly revenue from each client of theirs that uses the platform. Software solutions also create opportunities for agencies to offer additional services such as setting up and supporting the platforms as well as helping clients get results from them.
Consider offering software solutions like these to your customers:
HubSpot – HubSpot helps organizations, especially those using inbound marketing, to optimize, publish, and track their marketing efforts. It’s a great option because it provides customers with a solid solution to their problems, and agencies that successfully pitch HubSpot to their customers get a little piece of the pie.
Socious – Socious is an online community and customer portal platform that helps organizations manage members and increase engagement. Agencies that offer Socious have more opportunities for recurring revenue, starting with a piece of the software license. But, since it’s a platform, opportunities extend beyond this regular cut of the deal, including potential contracts for ongoing portal design work as well as content management services.
Method #2) Scalable Services
Scalable services are extra services that agencies can add to current offers. The best kind are subscription services that customers sign up for monthly or yearly, which are priced according to value.
Lower level subscription services, such as content services that provide blog posts twice a month provide less value, but are less expensive. Higher levels may offer more value, such as a larger number of services or more in-depth information, and come with a higher price tag. Higher levels of content services might include weekly or even daily blog posts, combined with a social media sharing strategy for those blog posts.
These services don’t have to revolve around content. They can be anything that your agency excels at, including content, maintenance, marketing, or social media management.
Maintenance and Support – Agencies typically provide some level of maintenance and support for their products already. Software companies usually provide customer service to deal with challenges customers have when using their products, or to fix glitches, for example. Marketing agencies may provide similar services to deal with questions about strategy or how to implement marketing campaigns. With this add-on, you can expand on those services and charge monthly for a more in-depth package.
Marketing and Advertising Services – This includes everything from planning promotions to PPC services. Consider creating different subscription packages that range from basic strategies to full-fledged campaigns.
Content Creation and Management – Almost everyone wants content, but not many are creating enough or have the quality they really want. This is an excellent area for agencies to offer expertise not only in content creation, but also in distribution.
Social Media Management – Social media is essential for organizations, but takes skill to do well. Since agencies usually have plenty of experience in this field they can easily offer their experience to customers on a monthly basis.
Method #3) Product Development and Hosting
You’re already selling products and services, so why not create a few more? Developing new, niche products will result in more solutions and generate more revenue, especially if they come with a monthly subscription. Both software products and web hosting services fall into this category.
Create Your Own Software – Agencies can create software that supports their current products or services. Once the software is developed it adds value by making it easier for clients to manage their services and products, or become more efficient at completing daily business tasks like sharing content on social media. Efficiency and ease-of-use make supporting software an easy sell, and the licensing generates recurring revenue.
Web Hosting – Many agencies already do some level of hosting to support their project work. In these cases, it’s quick and easy to offer web hosting as an additional service for clients. Smaller agencies without the equipment or technical team may have larger start-up costs in this area. However, it is common to re-sell or layer services on top of established web hosting providers, so that your firm does not have to be the web hosting experts.
Generating Additional Recurring Revenue for Marketing Consultants Takeaway
Your agency may be leaving money on the table if your only focus is on project work and short-term contracts. Recurring revenue provides more stable income and allows you to plan for growth further ahead. To generate more recurring revenue, start by providing your clients with more options.
Partnering with software solutions is the most attractive of the three options mentioned because it generates automatic recurring revenue without a lot of extra effort. Once software solutions are pitched and the deals closed, agencies can hand the bulk of the work their partners. Added services and product development are also excellent options that showcase agency expertise.
Choose the best options for your agency based on growth potential, capacity, and experience, then focus on creating recurring revenue opportunities. Once you’ve launched your plan you’ll have a better foundation upon which to plan your agency’s future.