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Ditch the project by project agency model and build relationships with clients
Ditch the project by project agency model and build relationships with clients

We’re big believers in the subscription model. Time and time again we see agencies struggling with stable revenue and sustainable growth. It’s a roadblock everyone comes up against eventually but take it from us – there’s hope.

The solution comes from moving towards a subscription model and moving away from billing by the hour type projects. We believe it will become the dominant service structure for agencies. A subscription model is necessary for growth because it’s easy to scale and even easier since the world has gone digital. But agencies have been slow to adapt their business models to a digital world. Take some advice from people who’ve been there and done that and helped agencies come out smiling on the other side.

Shake up your traditional thinking

The first step towards transitioning to a subscription model is relearning the agency business model. Stop thinking about selling an individual product and delete the word ‘deliverable’ from your brain. A subscription package is about providing ongoing services and support. It goes beyond building a website for a client and sending them on their way. A subscription is about providing ongoing value to the client and building a relationship that benefits both parties.

It’s a difficult mindset to opt out of but it’s important to rethink. The focus on deliverables has evolved to protect agencies from clients who abuse the ambiguity of certain services to their benefit. This is a problem, as it bases a new relationship on the problems of a bad one. No good relationships should start like that.

But the traditional agency model is based on the myth that agencies are the gatekeepers of creative content/websites/graphic design and this has allowed them to charge what they will. Now everyone has a mobile phone. Anyone can whip up their own website through user-friendly website builders like Squarespace and WordPress. And everyone can create content. So now the agency must become the best at not just creating but creating consistently and value-adding from a business point-of-view.

Stop thinking about deliverables

As we said before, part of the shift is to change your thinking about what an agency does. Agencies have to stop thinking about their business as a shop, selling deliverables. We must stop thinking in the short term about setting boundaries with what is in-scope and out-of-scope and become opt-in resources.

Previously, it made sense for creative agencies (those who output website design, graphic design, video etc) to work on a project-by-project basis. A lot of the time, the creative collateral needed was one-off – a single video or static webpage. But now content marketing and scalability is everything. Anyone can publish instantly and audiences expect fresh dynamic content every day. Clients regularly need a higher volume of content to meet expectations.

This is where the subscription service model comes in. While it may be at a lower price point per piece or per hour, it’s also recurring. This makes it more sustainable for both clients and agencies as well as forging a stronger relationship between them. In this model, agencies can also reward clients who commit for long periods of time with better prices.

A subscription model is important for businesses of all sizes. Subscription service Adobe Creative Suite launched successfully in 2012. In 2013, software giant Microsoft switched from their original product-selling model to a subscription service. They stopped selling their software as a package and began to sell it as an opt-in service called Microsoft 365. The product might be different but the result for the seller is the same. Instead of wildly fluctuating sales numbers, you end up with a stable, long term and predictable income.

The benefit to the subscription customer is they’re not locked into a software package that will inevitably become redundant. Software upgrades are in-built to subscription models which also motivates companies to innovate.

Become business tech savvy

Another big shift comes into play when you rethink the essential services that agencies provide. The aim of the game shouldn’t be to churn out content at the beck and call of your clients. It’s also unwise to box your business in.

Ultimately, the strongest agencies will be savvy in both business and technological aspects. Indeed, even the best creative content will fall flat without a solid business and tech understanding behind it. A lot of the time this means being less creative and sharpening your understanding of the business side of things.

Of course, most agencies understand business to varying degrees. But as pioneering modernist architect Louis Sullivan is famous for saying, form must follow function. The needs of the client should come before the agency’s creative aspirations.

Embrace the Psychological Benefits of the Subscription Client

The best relationships with clients are those that get approached as long term. It’s frustrating to get dropped by a client after a project. To not get the best outcomes because the client doesn’t want to invest enough to see results. A subscription model circumvents this indecisiveness by locking both parties into at least one subscription cycle. So it’s important for the agency to look at the client as a long term investment and make long term decisions from the beginning.

And it works both ways. If a client sees you as temporary (just designing the website, the branding, or creating one-off bits of content) they also won’t invest in you. But if a client knows they’re locked in only for a subscription cycle, you’ll notice a change in attitude that aims to get to know you and your product better. It’s the difference between pre-paid (already mentally settled on a budget and have taken the steps to invest that money; looking for a good outcome) and pay as you go (the budget isn't defined and potentially movable; looking to identify opportunities).

So stop thinking about the short term, ditch the project by project agency model and start adding value to your customers business. Building a long term partnership and relationship that is going to add value to both parties is the only viable future for agencies.

But if you are still not convinced, take a look at what other experts are saying about the subscription model for agencies.

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