Increasing income is traditionally the first port of call for organisations looking to grow – but what happens when you’re operating in an industry where income growth is positive but margins are depressed? In 2015 this was the situation the majority of creative agencies found themselves in, leading many to end up working harder for their money than ever before. Additionally, client expectations continued to soar with agencies pressured into working faster, better and cheaper.
So what can be done to counteract this industry trend and ensure agencies are equipped to transform income growth into profit growth?
Arguably the most important thing is for agencies to keep track of every hour spent. Billable hours have traditionally been the backbone of any agency and key to recovering costs. However, the primary way to do this – timesheets – are often branded as unwieldy, complicated and a time suck for creatives resulting in inaccurate reporting which causes issues in the long term.
Additionally, it has been noted that traditional models of hourly rates, retainers and project-based work are no longer cutting it when it comes to fostering commercial creativity. Combine this with the issues around tracking billable hours and it becomes easier to see where the gaps between income and profit are.
With this in mind, during the last few months, we asked a number of industry players about how they are working to boost their fees and value. We received some interesting insight across the board including comments around revisiting the way quotes are prepared and put forward, introducing new working practices and avoiding price wars.
Learn more from the Marketing and Communications Industry Snapshot
To find out more about how to best recover the revenue your team has worked so hard to secure take a look at the Agency Industry Snapshot 2016. This snapshot includes anecdotal evidence from industry players as well as best practice tips.