Web agencies have a choice: we either continue bitching about clients, or we turn every complaint into a lucrative business opportunity. Clients complain because they have a problem. And what are we if not problem solvers? And because this is not a hobby, our solutions cost money. Always look to turn your current problems into money.
Your web agency can turn these business challenges into revenue streams
Our post about ”content first” approach to website development sparked a lively discussion on Google+. Mary Ianotti, an Internet marketing professional and a friend, commented how important it is to be able to turn our challenges into profit.
This got me thinking about the most common challenges that we face every day, but fail to “make lemonade” from them. Or even better yet: why not turn as many of our challenges into a lemonade stand, into a profit center?
Clients are late delivering content.
This is the subject of our popular content first website development article.
In short, offer your clients your content planning and creation services and do so before you jump to design and development. Quality content is just as important as quality design and stable apps. Become your clients’ content strategist because your clients don’t know how to make their content make money. Don’t offer content services yet? Start offering them. Don’t want to do it yourself or in-house? Find a capable writer to be your outsourcing partner.
Some clients are mean to you when their website crashes or is infected with malware
News flash: websites crash! If you don’t maintain them, that is. And when they do, you don’t want your relationship with the client to crash too because the client was not offered a solution to this problem.
The solution is not to wait until the website has problems. The solution is also not to naively expect that there won’t be any problems with an unmaintained website.
The only solution is to sell your client an extended warranty in the form of a monthly maintenance contract. With this service you’re providing security and insurance. You’re making sure that their website gets all the updates as soon as they are released (i.e. when there’s a new hotfix for WordPress), but before there is trouble. Your support contracts will become one of the major sources of recurring revenue in your web agency.
Want to learn more about turning a maintenance service into a lucrative stream of recurring income for your web agency? Here’s our book about building, selling, promoting and organizing a maintenance service.
This won’t work unless you inform and educate your clients about your support and maintenance service first. At the moment when their website is down, don’t expect your clients to behave rationally. Some of them will get nasty with you. Some of them will assume that free fixes are included in the price of building their website and you will get into an argument with them over something that you could have easily prevented.
Don’t let them ever assume such things, prevent the problem from ever happening and save your relationship! Fix their website as soon as they report a problem, charge them for the fix and then pitch your insurance and security services. Tell them that it’s easier, faster and cheaper to prevent the problem. Even if you can’t prevent the problem, problems of clients who pay for support become priority in your agency. Pitch your service to new clients as soon as you’ve launched their website, don’t wait.
But be aware of this: if you don’t charge them for the fix now, you won’t sell them any maintenance, ever. Your client does not have a problem if you’re willing to fix their website for free. Where there is no problem, there is no sale.
Clients complain how their website is nothing but an expense to them.
It’s no wonder that your clients are not getting any ROI from their website if they invested zero dollars in promoting and improving their online business. We assume that our clients are aware of the importance of working on growing a business online, but they’re not. Some clients think it is enough to build the website and that their customers will come by the magic of Google. You and me both know this is a delusion.
Solution: sell your growth-oriented services to your client, charge a premium for it, and charge for it monthly. Ask your clients whether or not they work on growing their business off-Internet. If yes, tell them that their website is an online snapshot of their business and that it needs the same level of attention and care. Offer your clients to work every month on achieving their business results.
These monthly growth-oriented services are the most lucrative source of recurring revenue for any agency and I cannot recommend enough that you work on creating them. It’s a lot of work, but it’s totally worth it, I promise. Soon we will be updating our book “Recurring Revenue For Web Agencies” with new information about how to build, sell, promote and organize these services - subscribe to our newsletter if you want us to notify you when we’ve updated the book.
Constant problems and complaints about a certain technology
If a technology gives you troubles with clients, remove it from the equation and offer only superior technology of highest quality. You don’t have to settle for what is below your standards.
Take our example. I was sick of receiving support tickets from clients about their many email problems, and the clients were probably sick of having problems with email in the 21. century. Mailboxes over quota, never enough space for email, spam getting through to their inboxes, lost passwords… You know - the standard way of using email when you buy low-cost shared hosting.
We changed our own and our clients’ email provider. We switched the majority of our clients to Google Apps for Business, one by one. We charge them an affordable, one-time setup fee and an inexpensive annual fee for basic email support. There are also Google’s license fees.
The result: our clients don’t have problems with email anymore. Rarely do we get support requests about Google Apps. The service is very profitable to our agency.
Everybody is happy now:
- clients get first-class business email that just works and a real human to talk to on the phone in case they do need support during their business hours, in their language (Google is notorious for offering bad support from real humans)
- our agency gets a nice recurring revenue (from what the client pays us directly and from Google’s 20% reseller fee for Google Apps licenses)
- Google gets our clients’ money, and I personally like the thought that this money goes to a company who builds cars that drive themselves. We’re financing the building of the 21. century.
We could have accepted to deliver email services to clients just like everybody else does: by offering a free, yet crappy service. We chose the harder way: a solution which solves the problem magnificently, but requires some sales effort on our part and some money on the client part.
Our effort pays dividends every year. Not only is email a profit center for our agency today, but this paid service also attracts better clients. Free services attract freeloaders.
I’m not saying your agency should go into business with Google Apps. By all means, stick to your core business. I’m saying that you should always be on the lookout for commercial solutions to annoying problems, and that you are not in the business of saving your clients money. Your job is to solve the problem and sometimes the best solution is not free. Assume that your clients deserve the best, not the cheapest solution. You’ll be amazed by what this attitude does to your agency’s profitability and your clients’ satisfaction.
Clients who like calling you on your personal phone outside business hours to demand urgent work
This one is simple to solve: charge your clients for support. All profitable web agencies do this.
After you’ve deployed their website, let the default warranty expire (30 days is enough) and then call them and tell them that they now need to pay for support. Put them on a retainer - they will need you. If calling you on a Saturday morning is not a sign that they need you, I don’t know what is.
This is simple to change, but I know it’s not easy to decide. That’s why we wrote the whole book on the subject of building recurring revenue streams from support and maintenance requests. The book will not only help you understand why you need to charge for support, but it will also teach you how to sell these services to your existing and new clients.
Clients can’t afford a content management system, but they need to update their content frequently
There are two possible sources of recurring revenue in this situation.
First, if they can’t afford to pay for the app, maybe they can afford to pay you for a couple of hours a month for updating the content. During the year they will probably pay more than the cost of the app, but it doesn’t matter. A predictable small monthly expense is sometimes more attractive than a big lump sum upfront.
Solution: sell the project without a CMS and tell the client that for the time being, they can hire you for content changes. When you become too expensive, it will make sense to buy a CMS license later, when they see how many changes a month they really need. They might realize that they don’t need a CMS after all and that they should keep paying you.
Build their website with a CMS anyway and use it in your agency to update your client’s content. That way your designers and developers don’t have to work on updating the content. Any junior or an intern in your agency is capable of entering content using the CMS.
A second solution is something we invented in our agency in 2009, when the recession made companies slash their marketing budgets. There were fewer clients calling for website development services and we had to spend money on advertising to get new clients. This made us sales geeks pretty nervous and we did our best to close as many deals as possible. I didn’t let them offer discounts and we had to think of a way to make lemonade from the many lemons we were given.
So if the client cannot afford to pay the full price, and you can’t afford to lower your price, what do you do? You rent the app and make the client pay for it annually or monthly. You can offer your clients to pay an affordable annual price to be able to log into the CMS and change content. If they don’t need it, they can cancel anytime and lose content updating privileges. When they need it again, they can pay for it again. It’s as simple as getting gym membership. You pay for the whole month and attend once.
Now, I am not endorsing the app renting tactic and I am not saying that you should do what we did. This is to serve only as a story about how we turned an undesirable situation into sales success and, eventually, into a (recurring) revenue stream. This tactic is not very friendly to your agency’s cash flow because you have to charge a lot less money initially with hopes to make up for the price difference years in the future. It turned out OK for us, though, and we still get decent recurring revenue from clients we landed back then. But times are different now and we stopped selling apps for rent in 2012 because we decided to focus on different services and different clientele.
Creative Commons Image Credit: Money under water, by Lisa Paul