How To Raise Prices and Recession Proof Your Digital Agency
Experts are sensing a downturn in the economy… But is your agency recession proof? So many variables go into a healthy agency. Maybe you should look at raising agency prices? Maybe your agency really needs to hire (or fire) to make yourself indispensable to clients? If the economy takes a hit, you have to know who to hire, who to fire, and the right way to price your services in order to survive.
In today’s episode, we’ll cover:
- How to ensure your agency is recession proof.
- When should you raise your prices?
- 3 reasons clients love project managers.
- Is your agency business partner still the right fit?
I had a great conversation with Scarlett Rosier, Co-founder of Rhyme and Reason Design. Scarlett is one of those “unicorns” who actually went to college and got a Masters in Advertising. (So many of us are accidental agency owners who just fell into the business!) Scarlett is put her skills to work as the Director of Operations at her agency for the past 10 years. She’s here to talk about growing in a down economy, nailing your pricing, and the value in project managers.
How to Recession Proof Your Agency
Worried about a potentially volatile economy? Don’t be! When the market goes down, your agency has an opportunity to go up. Here’s the big secret — in-house marketing teams are usually the first cut.
Cutting the in-house team, therefore, justifies agency costs for your clients. Brands still need marketing in a recession. But, they can usually save money by getting more help externally.
Don’t fear a recession; embrace it. If you survive the recession, you’ll have a bunch of new clients and a reason to raise prices. Your agency will feel recession proof and you need to raise prices in order to be profitable.
When Should You Raise Your Prices?
The simplest answer is this — whenever you can! You have to be able to justify a price increase with value. So, if your value has gone up over the past year, your prices should too.
Let’s say you’ve hired two new people, learned a ton of tips and tricks, and you’re even better at helping clients this year than you were last year. Your prices should reflect those improvements because your clients are benefitting from them.
I recommend reviewing and raising prices at least once a year. You should constantly be improving, building better processes, learning new techniques and strategies. And that means you’re giving clients more value year-over-year.
Adjust your proposals to match the increased value. Plus, you probably give your employees a yearly raise based on performance, right? Your clients should be giving you one too!
Think about it this way… If you have a heart attack, are you going to use the best surgeon or the cheapest one? Price your agency services to match your skill and you’ll attract the ideal clients instead of the ones who just want a bargain.
A price increase is the fastest and easiest way to grow your agency business.
3 Ways Project Managers Help Retain Clients
Want to know what clients really want? They want relationships and regular communication. They want to feel assured they’ve made the right decision to work with your agency. And that’s where a great PM helps retain clients.
- They’re the client’s trusted advisor. Your clients need someone to touch base with so they don’t feel like they’re in the dark. Clients have questions, ideas and business goals they want to talk about. A PM is their agency contact for listening, sharing, and connecting.
- They are a single point of contact. No client wants to have to go through a new person every time they need something, and frankly allowing them to do that would cause massive problems anyhow. Project managers build client relationships, which brings tangible value to your agency. It’s easier to make existing clients happy than constantly bringing on new ones, right? Happy clients make agencies giant.
- Project managers attack pain points. Hiring an agency requires a leap of faith on the client’s part. They don’t know if they’re going to get results, and they’re spending money on potential value. Project managers can help ease those fears and avoid buyers remorse. A good PM will anticipate the client’s fears and talk through them.
Is Your Agency Business Partner Still the Right Fit?
Business partner relationships can be like a marriage. You rely on each other, and you know the day-to-day struggles the other faces. But, what happens when your marriage evolves or changes?
But also like marriage, business partner “divorce” isn’t easy. And the realization of its necessity something many owners grapple with.
I have a saying — “You either know the bad partner or you are the bad partner.” Sure, sometimes partnerships are successful, but oftentimes I see the partners outgrow each other.
So how do you know when it’s time to part ways with a business partner? It’s all about communication and goals…
Scarlett says to look at how the person argues as an indicator of their communication. Are they articulate? Can they stand their ground intelligently? You don’t need to agree all the time, but being able to disagree effectively is what makes a great partnership.
Rhyme and Reason was initially founded by three partners, but there came a time where one of them had different goals. That’s when Scarlett realized there needed to be a shift in the agency’s leadership. If a partner has career goals that don’t align with yours and with the agency, it may be time to part ways.
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Building a Recession Proof and Better Agency
A recession proof agency will relieve additional stresses if there is a drop in the economy but what other issues can you now focus on to improve and grow your business further?
Through my own experience as as agency owner, I have experienced all if not most of the different struggles you are going through and I can help you. Whether it’s how to deal with bad agency clients, the process of developing agency products as well as how you can build authority for your agency.
If it’s challenges growing your business that you are experiencing, I have agency growth hacks, the best ways to improve management of your business as well as why building a remote team can be beneficial in the long run.