How to deal with the biggest financial challenge in creative agencies
Read time: 3 minutes
According to a recent poll promoted by Second Wind, the biggest financial challenges in the creative and advertising world are:
- Lost/unbillable clients 56%
- Client pressure on agency rates 16%
- Slow-paying clients 13%
- Health care insurance costs 5%
- Lost media commissions 4%
- Other 6%
The survey drives attention to the huge cost of lost and unbillable clients. This means that a considerable amount of work and effort is being expended without revenue coming back to the agency. This is a key area to tackle when you are trying to maximize your creative agency’s profitability.
In this blog post we will present some tips on how to avoid losing existing profitable clients.
The principles of client retention in creative agencies are:
1- Build relationships – It is an old cliché but worth repeating. If your client is not connected with your product and your agency, it is more likely that they won’t see the full value of your work and leave.
2- Use a good CRM system – To achieve the top #1, the first step is keeping all the information about your clients in one place. You also have to make sure that employees will always have access to current client data, allowing them to make notes about conversations, read what other’s have done and ultimately provide better customer service.
3- Accurate documentation – Provide your clients with accurate documentation on the work that was done for them by your creative agency. For example, adopt a client portal that provides better methods for sharing project files and communications to help improve the client experience. Documentation will ensure that you will be always prepared to answer client questions and better understand their needs.
4- Pay attention to the time frame and costs – Make sure you have a smooth workflow that allows you speed up delivery of projects and keeps costs down, increasing your efficiency and your client’s satisfaction. A good financial and time tracking software should help you with it.
5- Learn about and adopt best practices – Try to understand more about your industry, keep yourself updated with new material that can be useful for your creative work as well as your professional development, and use a good project management software. Clients will feel more confident about the agency they are working with knowing that they are using best practices to manage their projects.
Every agency has financial problems that need to be dealt with. To understand what your financial problems are, it is important to have to keep track of your bills and pay close attention to your profit analysis reports. Then you will be able to better assess your work and financial situation and turn these “problems” into “opportunities”.
You can track and disperse your money more efficiently with software offered by fp., which helps you organize your invoices, purchases orders, job budgets over time and provides you with insightful new ways to increase your productivity.
Please leave your comment and share your experience with us. Stay tuned for the next post about Financial Challenges – Unbillable hours.