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Most digital marketing agencies have had to deal with the problem of shrinking profit margins at some point or another. As more clients expect agencies to deliver a wider variety of expert-level services, and more companies bring more of their marketing work in-house, agencies face the tough battle of proving the value of the services they offer. Further compounding these issues is the problem of finding – and retaining – top talent.

And so, agencies must adapt and find new ways to maximize each hour and each dollar they spend. Below are four simple strategies designed to improve operating margins for digital marketing agencies.

Reduce churn

The simplest way an agency can reduce its churn rate is by simply talking to their clients. While this may seem like common sense, many agencies don’t communicate with their clients outside of upselling a service, submitting reports, or dealing with a complaint.

Agencies need to be more proactive in gathering feedback, whether it is through customer surveys, social media, or the random email message asking a client how they are doing and if they need any help. It is much better to be proactive than reactive. Clients will notice this.

Work smarter

Working smarter leads to expending fewer resources and enjoying increased stability. One way of doing so is to plan for long-term capacity. By creating revenue projections that include the number of staff hours needed, an agency can better anticipate growth and avoid scrambling to outsource work at the very last minute due to limited staff.

While many agencies know that finding new clients, creating proposals, and scheduling meetings are critical for revenue generation, they can also be a notorious time waster. One way to save time with this process is to use templates, which can be created for the following:

  • Proposals
  • Project outlines
  • Service estimates
  • Troubleshooting

Templates reduce inefficiency by automating repetitive tasks, helping streamline entire processes.

Use new technology

Several new technologies offer agencies a way to save time, employee hours, and operating costs in exchange for a relatively small investment. Fintech apps, for example, allow an agency’s accounting staff to streamline the payroll system. This frees up several hours for other important tasks. Likewise, many project management applications are specifically designed for agencies, and are always worth a look.

Outsource certain tasks

Outsourcing tasks like content creation allows an agency to tap people with skills in specific areas. A content partner knows how to evaluate an agency’s content marketing needs and can fill in productivity gaps that need the most help.

Outsourcing also helps to solve a marketing agency’s problems with finding talent and doing so without the need to hire new employees on a full-time basis. It also allows the agency to expand their reach beyond their immediate vicinity, opening their doors to skilled talent around the world.

Conclusion

As digital marketing agencies grow, the risk of failure and problems also increases. The key is to be proactive in ironing out inefficiencies and cutting costs without affecting employee morale. But with hard work and persistence, any agency can reach its goal of improving operating margins. To learn more about how Tempesta Media can help positively impact your revenue this year, contact us now!

Michael Marchese is the founder and CEO of Tempesta Media. He is responsible for corporate strategy, executive team leadership and overall business operations across all the company’s segments.

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