We all make mistakes. Some are insignificant mistakes that go by almost unnoticed and some are more serious which make us lose money.
In the professional world, these missteps can cost us dearly, or even push some companies, all sizes and areas included, to go bust. Creative agencies are not an exception. Locked into the frantic pace of meetings, communication plans, reverse planning and creations, the heads of agencies do not realise that they are making mistakes which make them lose money, in one blow or progressively.
The mistakes that make your creative agency lose money
- Trying to do everything rather than specialising in something
- Undervaluing your prices
- Not tracking work hours
- Not charging for multiple changes
- Resting on your laurels
Here are the 5 mistakes to stop making so that your creative agency continues to prosper.
1. Trying to do everything rather than specialising in something
You sell yourself as a generalist agency that does a little bit of everything in all sectors. In order to ensure this strategy gives you a certain longevity, it would be better to have a large number of multipurpose collaborators, capable of taking charge of a multitude of varied demands ranging from the creation of a website to an internal communication campaign and including events companies and public relations. It is possible, but it demands a lot of work.
Nowadays, it is the time of specialisation. Choose one area in particular, like events or digital communication, and become a real expert. In this way, you will differentiate yourself from other more generalist agencies who could even ask you for your services.
2. Undervaluing your prices
One of the most widespread errors in the world of creative agencies concerns price strategy. In effect, when faced with a potential customer, the majority of agencies propose a single price offer. And in the majority of cases, the client is going to find this offer too high and try to negotiate to lower it or will go directly to the competition.
To remedy this, you should propose three price offers to your customers:
- your real offer and the best option for your customer: this proposition will be in the middle of the three propositions as generally, it is this one that the customer will tend to choose;
- one offer 20-25% cheaper with some less deliverables;
- one offer 30-35% more expensive with extra deliverables, useful but not essential.
In more than 90% of cases, the customer will choose the second option. A choice that will satisfy you as much as the customer who will feel like they have won and controlled their budget.
3. Not tracking your work hours
How do you know how much time has passed on a project if neither you, nor you team, track your hours? Contrary to popular belief, tracking work hours is not a micromanagement tool, but a way of increasing cost-effectiveness. The advantages are numerous:
- you increase the cost-effectiveness of your projects;
- you avoid overspending your budget and you respect deadlines more easily;
- you know the workload and the availabilities of your resources;
- you increase the productivity of your team;
- you anticipate delays;
- you can calculate the real cost of a project.
Furthermore, a large choice of software exists nowadays that simplifies life for you and allows you to easily enter the completed hours in a workday.
4. Not charging for multiple changes
You probably know the expression that says, “all work deserves pay.” So why do you make small changes free of charge, without ever charging the customer? This way of acting harms your agency as you are continually letting go of money that you are normally given.
Admittedly, customers are always asking for more: a little modification here, a correction there. They want the result to be perfect, to live up to their expectations and you cannot blame them for that. To resolve this problem, your quotes and contacts should clearly indicate in detail the number of corrections included in the fee, then the cost of each extra change. Leave no room for interpretation or suggestion. For example, clarify that for this fee, four global corrections are included in the cost and beyond that, every modification will be charged at €200.
In this way, the customers will be even more attentive to the corrections they ask of you, which is definitely going to create a big reduction in countless back and forth between the agency and the customer.
5. Resting on your laurels
The world evolves at great speed and if you do not evolve with it, you will be left on the subs bench. Don’t sit on your past glories! In order for your agency to continue to hit its targets, you should constantly evolve, develop and improve to follow the changes in the market and respond to the ever more demanding asks from customers.
Follow the news in your sector, stay informed about news and do not hesitate to train your team with new communication and marketing techniques which allow advertisers to increase visibility and attract even more new clients. This is an excellent way to stay competitive.
Finally, it is crucial to continue to find new clients. This is a part of your responsibilities as head of the agency. Avoid completely resting on your current clients as they can decide to leave your agency for another overnight, which would lead to serious financial losses.
By avoiding these five mistakes, you will no longer lose money for your creative agency. To become more high performing and be better organised, opt for an online project management solution.