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Profit & Growth Tips for Digital Agencies

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How Specialisation Can Transform Your Agency’s Performance

Posted by Laura Hernalsteen on Apr 26, 2016

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One of the biggest changes a digital agency can make is choosing to specialise in a specific area. This can feel like a big, scary step to take – so much so that many agencies are put off making the change, afraid of losing opportunities, saying no to potential customers that don’t fit their specialism, and putting their agency’s workload at risk.

However, today I’m looking at 3 reasons why specialising can transform your digital agency’s performance – and your profits.

1) Better-Fit Customers

Specialising in your agency’s main area of strength will become a key differentiator for your agency, and will completely change the way you work. It will mean that you only take on customers and projects that are a good fit for your specialism – and your employees’ skills.

While this will mean turning down some work that doesn’t fit in with your specialism, the customers that you do work with should be more profitable over the customer lifetime. Your agency is likely to have a longer, more valuable relationship with a customer in the long-term if they are a better fit for your agency, compared with a poor-fit customer.

Learn more: How to Identify Your Agency’s Best Customers

2) Less Non-Billable Pre-Sale Time

In a generalised agency, at any time you can be working on a wide variety of projects that require lots of different skills and involve lots of different types of work.

This means that even before you sign up a new client, you will need to spend a lot of time in the pre-sales process researching the best way to complete their proposed project, to ensure you have a good understanding of what is needed, the technology involved, and any other specific requirements. This is all time you can’t bill for, and takes place before the customer even begins working with you. And after you put in all that work, they may still decide to work with a different agency, or cancel the project altogether.

In contrast, if you specialise, it is likely that there will be a lot more similarities in terms of type of work and skills required between your projects. This means you don’t have to spend as much time researching to understand the work involved before the project starts. Additionally, you will be able to define processes for common tasks which will make your agency more efficient, and get more junior employees working on parts of projects that would otherwise be inaccessible to them.

3) Improved Agency Reputation

If your agency specialises, you can position yourself as industry leaders in that specialism, and become known as the best agency for that type of work. For example, you may specialise in a particular programming language and be renowned as the best people to contact for that.

This means that you won’t need to invest as much time and money in marketing and sales activities as you become known in your area of specialism, compared with an agency that works on more generalist projects.

Additionally, your employees will be able to develop and improve their skills in your area of specialism, and become experts on one subject, rather than generalists on many. This means that their time and expertise will be valued more by the customer, and so you can bill more to account for that.

how to make your digital agency profitable

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