The novel coronavirus has affected more than just our personal health and safety, and businesses must adjust in order to survive.
The novel coronavirus has drastically shifted the functional norms of many businesses, particularly those of digital agencies. As economic systems, consumer needs, and client requirements change, so must the agency’s operational foundation. While this can serve to create a sense of instability and panic, there are actionable items and practical steps to be taken to help ensure the continuity of your business.
These applications are focused not only on what this crisis means for an agency and their base operations at present, but also how one could reasonably react to the months of necessary recovery following the viral conclusion.
Analyze and Reduce Spending
In order to reduce spending in such a way as to not cut into revenue, you must first find where your money is being spent and what manner of returns you are to expect.
Analyze all costs, down to the last cent. (You should already have this in order ,but if you don’t, now is the perfect time to dig deeper.) Take these costs and separate them into two main categories:
- Fixed Costs
- Variable Costs
Then, divide each of these costs into specific sub categories to the best of your abilities. Allowing an itemization of where each amount goes, making it simple to weigh against potential profit later.
Create different revenue scenarios with the probability of change in client status. This means clients leaving, set deals becoming cancelled or paused, etc. Follow this speculation with finding the minimum revenue necessary that your agency requires to continue forward with each individual operation.
For each scenario cut on expenses in order to achieve break-even status. Make use of any applicable governmental support services should they be available to you or include other measures such as reducing staff working hours by 25%, etc.
Consider what each client costs. Check billed hours your team actually spent on each client, and weigh this against the hours that were contracted. Check the money that was spent on content creation if you are outsourcing it, and any publication costs associated with that content. (guest posts, infographics, Online PR, etc)
Create this cost analysis for each client on a monthly basis.
Create a document with this information, clearly outlining how much profit your agency is set to make from each individual client. This will become clear once client costs and what each client pays you are compared.
Focus on Profitable Niches/Countries
You may find that certain niches or countries are more profitable than others. Understand why this is happening. Most times is related with variable costs. If you are an SEO agency, a big chunk of your variable costs goes to content creation and publication. As an example, in our agency we have big clients in the cryptocurrency market demanding a lot of content publication in the form of articles, infographics etc. Because of this, we already have a big database of sites where we publish regularly, with well established contacts and protocols with ourr agency. This saves us all those outreach hours spent by our team looking for sites and negotiation prices, every time a new client from the crypto market comes onboard.
New clients in this niche, become much cheaper than clients from a new niche.
Same goes for countries. In Portugal, we have a big database of places to publish high quality content including even some amazing sites accepting free publications. Because of this, new clients have a very low variable cost during the first months in terms of content publishing.
Consider Recession Proof/Proactive Industry
Try to find niches that will not be affected, or not nearly as severely affected, by the coronavirus crisis Focus on these as well. Focus on these types of niches in conjunction with established clients, as the recovery period may cause a new type of upheaval in market trends.
Invest only where your money is
With the previous in mind, focus on getting leads for these niches/countries so you maximise the ROI of each client. This way your cost per conversion will be the same, but once converted, that client will be a lot more profitable.
So in resume, focusing your lead generation that is directly related to pre-existing and well established clients can serve to maximize profits. This is largely because these niches:
- Are already associated with established databases of contacts or publishers
- Are able to supply more reliable speculation on price
- Reduce team and time billing hours by relying on pre-established relationships
- Will not require further expenditure obtaining new clients within a known niche
Target Your Promotion
Once you have a clear idea of which niches, countries, and clients are set to give your agency the most reliable revenue streams at the lowest cost, you now need to consider agency promotion. As market trends and business vitality change, paid promotion costs have also been upended.
GoogleAds, Instagram, Facebook, and a number of historically useful promotional outlets are showing a much lower cost per click, due to lack of investment. Take advantage of this market dip and invest in the promotion of your agency at a lower cost than usual.
Utilize Cold Calling
Use these previously identified niches to create an email marketing campaign. Find all the companies relevant to those niches and countries. Using Google search results and LinkedIn, find the emails and top representatives of the first 100 relevant companies you come across. Use either an email campaign or a paid LinkedIn account to contact these representatives directly, explaining why your agency is directly applicable to their current needs. Use case studies and strong visual messages to solidify and strengthen your point. Rely heavily on historical data and the established effectiveness of your agency as it pertains to their industry directly.
Find New Revenue Streams
While massive focus is being put on cutting costs and utilizing reduced resources, such a stark change in daily business function will see you with downtime. Use any newly freed time your team had to brainstorm and execute new strategies that will help to strengthen your business in the future. Adapting your existing resources to focus on your own agency internally, as opposed to constantly focusing on clients only. Use the new extra time for you.
Consider using this time to create a webinar on areas of interest or expertise. Focus on SEO for video or voice services, create a video series of your agency by filming your meeting sessions (people like to see other agencies at work). Think outside the box for ways in which to best promote your services and solidify your agency as an industry expert, reinforcing your abilities and image as a leader for when markets return to normal.
Stay safe, and stay well.