Have you ever wondered what happened to people who splashed the internet with luxurious lifestyle pictures claiming to be agency owners through high dollar contracts and multi-million dollar in Annual recurring revenues? Well, the truth is that most of them just fade away. Their tactic is to “fake it till you make it” – initially it may be impressive, but it is not stainable.
I came across a client, who did some course online and wanted to start a WordPress agency. Where the arbitrage they were looking was at price difference from online procurement vs offline sales. The client starts with splashing his IG and FB profile with him starting the agency getting a new mercedes benz etc. He did get a few wins and we helped him to get those contracts executed via our network partners. The course he was taking was wrong. He also got into the whole generating leads, but it turned out that leads were not generated but scraped from the internet. Our online consultant and Relationship Manager did sound out to the client that the approach was wrong. Advice was to focus on serious marketing and sales rather than such splash all over the internet.
After running out of money he finally stopped his so-called agency and started working on Instagram Agency, managing the accounts for his clients. He eventually started to give online live courses without Learning Management System. Over a period of time even his IG Management business failed and he was selling IG Account.
Lesson to be learnt from this is that clients don’t always fall for gimmicks. Rather focus on a development strategy that will create tangible growth for your agency. By realigning your agency processes, you’ll be able to build on your core objectives to turn your WordPress agency into a business that is both sustainable, profitable, and that drives growth.
The world of WordPress is plagued with freelancers who are bidding, the race to the bottom. The fierce competition, low cost results in the poor quality website, the missed deadlines, and all the unhappy clients. This is not a curse but an opportunity. Most clients are now looking for agencies rather than freelancers.
Which means whether you like it or not your marketing efforts have to be a lot more steeper. You are not only competing with other agencies, but freelancers and even for clients who have burnt their fingers.
Marketing efforts like lead generation should begin as soon as you have started with your agency. The right marketing message will need to cut through the chatter – should be able to let your potential clients know as to why they need you vs others and/how their experience with you will be good. Remember most of the clients have burnt their fingers.
Most of the WordPress agencies are living from project to project. Which means they will always need a pipeline full of qualified clients at any given point.
This is a lesson we need to learn from traditional ads agencies. How they transformed their revenues to more retainer based earnings. In simple terms, this is something that can’t can’t be applied directly. Primary recurring revenue will be to manage WordPress services charged monthly. Also, instead of buying media space for clients, tie up with Hosting companies who provide recurring commission. At first recurring commissions seems smaller than one time commission, but over time adds a lot of incremental value and revenue will grow exponentially.
All agencies will need to maintain a bench. This is where agencies can get creative with their bench sizes. They can commission in-house projects such as:
Rather than a team being ideal it will help the agency to create additional revenues – converting expenses into income.
When I have my mentoring sessions with freelancers and small businesses who aim to become an agency. I always tell them one thing, is to create a process as if you were an agency today. Like, have a CRM, Ticketing System, Billing Software etc. in place so that your process can be scaled up as and when you scale up.
Surely, it’s easy for freelancer to run their business via Excel. But, having processes in place will help them to scale with ease. This will also ensure that all issues in the processes are ironed early on.
When we talk to a lot of our clients, one of the things we have noticed is that they always complain about their freelancer or agency not giving them clear communication. Ambiguity leads to doubts, procrastination and delay in project delivery.
Let me share an experience with you. Other day, I was talking to a client of ours, it seems he had given someone a bulk order for turnkey websites. Now the confusion was on a silly thing like domain name, client was under the impression that freelancer will be providing the choice of domains and freelancer thought client will. After that there was confusion on who will register the domain. This led to a delay in the project and we hooked up the client with an agency partner within our network. Now the freelancer lost a bulk client and client was left with a sour taste about working with freelancers.
A lot of freelancers make it to a great agency. Usually they crash hard when they don’t fully understand compliances and administration. Not knowing your working capital or projected monthly/weekly cash flows will often lead any business into the ground.
Knowing these critical elements will help them to price their services. When I talk to new agencies one of the things they fail to price into their services is their overheads. Most of the billing is done on per hour basis. For instance, They have a concept of CTC as salary payable, this is wrong; a CTC should include a fraction of all the overheads like rent, travel, sales and marketing expenses etc. If such things are ignored soon they start eating into the profits and those profits turn into losses. So called unsexy “paperwork” will ensure that business will generate constant profits.
Within our group we have total control of such compliances and administration in fact we have our balance sheet and profit & loss statement done weekly. If you are a small agency and can’t do it weekly, always try to do it monthly. Even though we are not a listed company, we run our administration much better than some of the listed companies that are out there.
When it comes to agencies, most of them will also take a server and start offering hosting services. Hosting as a business on a small scale is not feasible. Keeping the server up, server administration, solving hosting related issues for the clients etc. will not justify the cost for the managed hosting that an agency will provide. Sooner or later they will need to get a system administrator instead of a WordPress developer.
So if an agency is losing revenues by moving their clients to managed WordPress hosting providers like us, we always compensate them with recurring commission upto 35%. Giving agencies a win-win, where they can focus on growing their agencies and we focus to ensure that their clients WordPress sites are always up and fast without them losing on the revenues or customer satisfaction.