Most digital agencies have just one source of income: their client work. This makes your agency extremely susceptible to financial ups and downs depending on the number of projects you’ve got in the pipeline. In order to stabilise the agency’s financial situation, many digital agencies are starting to look at expanding their service offering in order to diversify their revenue streams.
Today I’m looking at five ways your digital agency can diversify its revenue streams to improve its financial stability.
1) Productised Consulting
Unlike a one-off project, consulting work will provide your agency with a consistent, repeatable income stream. One of the biggest limitations on your agency’s revenue is the number of employees you’ve got available to work on client projects.
With consulting, your clients will be paying for your expertise and knowledge, rather than your work, so you won’t be as limited by employee numbers and time. This has the added benefit of increasing your credibility and positioning yourself as an expert in your industry.
2) Sell Products
For example, writing an eBook, launching an e-course or creating a training package will all provide an additional source of revenue. Like productised consulting, selling knowledge-based products will also have the added benefit of positioning your agency team as thought leaders in your industry.
Alternatively, some agencies may have the internal skills to develop a SaaS product, creating a tool to support their in-house processes - and then decide to make it available to other agencies or businesses to purchase.
3) Establish Maintenance Agreements for Client Projects
Similar to working on a retainer, this will give your agency a recurring source of income from your clients. However, unlike a retainer you’re not agreeing to doing a set amount of work each month. Instead your work is maintenance-based, which you carry out as and when it’s required.
With a maintenance agreement you’re providing your clients with ongoing peace of mind, and ensuring that if there are any problems with your projects in the months after completion, your agency will respond to those problems quickly.
4) Organise Events
Organising and running industry events is another way to boost your agency’s credibility and establish your team as thought leaders.
However, organising an event can incur a lot of costs if you don’t sell enough tickets. For example, you will need to book a space to hold the event, plus guest speakers and refreshments… This is all money your agency will need to pay to organise the event before you can even start promoting it and selling tickets. Done poorly it can hit your finances hard, but done well it can be a great way to promote your agency and establish yourselves within your industry.
5) Build a Membership Community
An online community with paid-for membership can be another way to monetise your knowledge and expertise. A mastermind or networking group is a great way to connect your clients (who will likely have similar interests and requirements from you), and as well as providing an opportunity to share knowledge, can also be a way to create collaboration opportunities between your clients or other community members.
Learn more about increasing your agency’s profitability with our free resource, below.