The Agency Roadmap: Profit - That’s the Whole Point

Posted by Deltek on September 15, 2021

Heads Together - blog

Making clients happy is satisfying. Doing the work is rewarding. But at the end of the day, if you aren’t filling those books with lines of black ink rather than red, your shop isn’t going to be around for too long. Agency leadership is almost always talking about ways to optimize performance and thus profitability, and we all know it takes much more than motivational posters by the coffee maker reading “Work Smarter, Not Harder” to make that happen. So what’s the most effective approach? 

A business-development blitz is one approach, and we all love those sales pros staying on the hustle. The smartest agencies complement those efforts with technologically empowered strategies that boost cash flow thanks to effective resource management and budget control. Monitor what you spend and how you spend it in real time, and you can keep your shop’s team focused more on what’s billable. It makes sense: The less time your creative and managerial pros spend mired in admin tasks, the more time they can devote to driving agency growth.

How do you achieve this highly desired state? Concentrate on standing up and maintaining efficient processes that give leadership complete visibility into resource allocation and task assignment. The obvious advantage is you know who is doing what at any given moment, but furthermore, you understand any team’s level of effort. This is critical in preventing over-servicing -- a costly outcome of scope-creep that can quickly exhaust an unmonitored budget. 

 

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Deltek’s Agency Roadmap details six critical operational components the best advertising and marketing agencies should have in place to become profitability powerhouses:

Invest in Estimate Accuracy

When you have ultra-visible project data, you have the ability to create precise timetable and resource usage estimates for any engagement. Start by tracking and scrutinizing project histories and you can inform much more accurate incoming project estimates.

Ensure Strong Staff Capacity

Your team is your agency’s most powerful asset, as well as its most significant expense. Knowing who you have and what they are capable of lets you successfully predict your project bandwidth, getting more value out of available resources and preparing for freelance expenses if necessary.

Take Control of Time Tracking

Make it easy to track time in real time. It’s as simple as that. Mobile-friendly applications that facilitate time tracking make life easier for your team, and capture more accurate information that can put the brakes on potential overruns or reveal unrealized capacity for additional projects.

Build that Pipeline

Having plenty of good projects on deck is what sustains and builds your agency health. Grow that pipeline based upon knowing your shop’s strengths, and knowing what kinds of engagements are the most profitable. That sharpens your sales team’s focus so they can find the right kind of leads and land projects that boost the bottom line.

Shut Down Scope Creep

Project goals are bound to shift after fees are established and contracts signed, but don’t go down the rabbit-hole of doing work you don’t get paid for. That is a surefire way to say goodbye to your profit margin. Accurate project performance data helps you reveal level of effort to clients, and justify re-negotiation.

Launch the Right Agency-Management Software

Optimizing the effectiveness and inter-connectedness of your agency processes gives leadership a more accurate picture of agency health and keeps employees on task, reducing the time spent on non-billable tasks while sharpening their focus on meeting client needs.

Today’s enlightened advertising and marketing agencies recognize that now is the time to evaluate, revise and refine internal operations so that their teams are fulfilling client expectations as effectively and efficiently as possible. Be sure to download Deltek’s Agency Roadmap for smart guidance on how to make that happen, putting your shop on the path to optimal performance and profitability.