Retaining clients is a nightmare for agencies right now.
But what if you could have more predictable revenue and smoother financial forecasting?
“You sell your time, and typically sell it in projects,” says Dan Drury, co-founder of Bowen Craggs. “Maybe you’ve got some kind of retainer, or you’re the agency on record – but you still have to win each project.”
“We were looking for ways to smooth our revenue, and to make sure that once we got a client, we could guarantee work from them each year, as well as make it easier for them to buy from us again – rather than treat everything as an individual project.”
The consultancy introduced a three-tier subscription model, with Essential, Standard and Advanced options, giving clients varying services based on both their needs and financial capabilities.
Dan will be joining this month’s CFO Surgery to talk about the benefits of productisation, such as:
- Revenue and financial forecasting. Introducing a subscription model which is paid annually has meant they now have a smoother, more predictable revenue stream.
- More flexibility for clients AND the agency. “The beauty of this model is, with three tiers, if someone on the top or middle tier can’t afford it one year, they can downgrade to the lower tier rather than quit altogether – you’re still in their budget and they still get what they want,” says Dan.
- The psychology of a subscription. “There’s an inherent renewal concept when you subscribe to something,” says Dan. “You’re not ringing up a client and asking if they want it again – you’re ringing up and telling them, ‘Here is your renewal’. Mentally, subscriptions are things that continue.”
By productising their services, Bowen Craggs boasts a client retention rate of 98% – and a big part of this is clarity and commitment.
“It’s made it a lot easier for people to understand what we do,” Dan explains. “Before, people understood conceptually, and knew they wanted it, but it was quite hard to communicate what they’d actually get from us.”
It’s also meant they’re much more comfortable financially each year.
“When we do our business plan each year and come to the financial forecasting, we know our renewal rate is in the high 90s. So, we can start the year knowing we’re going to earn at least as much as we did last year.”
Come along to this month’s CFO Surgery to hear more about the positive outcomes of productising services – and how it could help your bottom line too.