Let’s be honest: running an agency is tough. We pour our heart and soul into our work, but clients don’t often appreciate the blood, sweat, and tears that went into it.
What we do may look effortless to our clients, but in reality, it was probably a slog, with internal testing, reviews, revision rounds, and more.
As clients don’t see all this, they often don’t value what we do either. Either verbally in their feedback or with their wallet.
For us, this led to a constant cycle of feast or famine. We’d win a client, but then all our energy would go into that project to the detriment of our sales pipeline. By the time we were done with the project, there was a lot of month at the end of the money and we were scraping around for new leads to ensure we could pay the bills on time.
We knew something had to change. The shift for us was to create a product.
We built the first version of our event management tool in WordPress in 2010 (on WordPress 3.0 when post types became a thing). This allowed us to charge a licence for the use of the product and upsell other creative services around it such as design and development.
Fast forward years later, and our product generates excellent MRR through licencing, and we enjoy working on creative projects for our clients who want to do new and exciting things.
The main advantages have been:
- More leverage in pricing since the product has inherent value. Services around it became premium add-ons.
- Consistent revenue and cash flow that isn’t tied to ongoing client projects.
- Freedom to be selective about the service projects we take on rather than needing to say yes to everyone.
- Less reliance on winning new clients month-to-month.
I appreciate that developing a product takes time, investment, and of course, sales and marketing. However, I do believe there are ways to productise the creative service itself. A great example would be SEOHive (not sponsored), which Jeffery Patch and Pete Everitt launched. Another would be GoWP or good old Deer Designer! (Again, none of these are sponsored.)
Now I am not an expert when it comes to productizing, but Pete did come on stage at ATL last year and shared how he broke down a complex service into a product. You can watch it for free here.
With all that said, neither having a product nor productising are the answers to all of agency’s problems. I share this only as an experience I’ve had that has made the slog of the day-to-day agency a much more profitable, and enjoyable experience.
Agree or disagree? Use the comments below to let me know!