The agency business model has been strained to breaking point by COVID-19. Here we explore ways of de-risking your agency's growth post-COVID-19.
Agencies learning how to manage
The agency business model has been strained to breaking point by COVID-19. Like most businesses, agencies have rapidly tried to reduce operating costs in light of the economic shock that the global lockdown has induced. The anxiety of how their own clients will react to the situation is now mostly realised with most agencies that I speak to now having a reasonably firm grasp about how their client base has/will reacted in terms of future plans, spend, etc. Depending on the market sector spread of the client base, most agencies are expecting at least some of their clients to cancel or put on hold projects. Some are expecting one or more of their clients to go out of business.
The need to reduce operating costs, has for many that I've spoken to, been long-overdue in their businesses, and the process has been cathartic in many ways. Agencies have been able to invent better versions of themselves in order to cope with the current crisis.
Many agencies have cut staffing levels in order to cut costs, and are relying on steady revenue from existing clients in order to keep their heads above water. This is a perfectly viable survival strategy.
The green shoots of recovery
However, I am also hearing from agencies that they are open to opportunities and taking on new projects, but the risk is too great - in terms of increasing operating costs of staff, etc.
And there certainly is opportunity out there! Some sectors are going gang busters at the moment. Other sectors, especially B2B ecommerce in my opinion, will flourish as we get back to some degree of normality - business won't want to be caught out so badly next time.
The agency owners that I have spoken to over the past few weeks are worried about missing out on these opportunities, when they realise that the profit from them might the difference between flat-line survival, growth or just insurance against an existing client cancelling work.
Flexible staffing to the rescue?
I am, of course, advocating a more flexible staffing solution for our agency clients - looking at outsourcing as a means of grasping new project/client opportunities whilst minimising the risk of recruiting staff. The ability to flex up and down resource quickly and without big risk has always been a challenge for agencies, and that is especially the case currently.
Of course, there are thousands of outsourcing companies, and the quality needs to be in place to ensure that agencies' good names are not jeopardised by poor implementations.
I am obviously also advocating some unique facts about On Tap's outsourcing model:
- We come from a long agency background - we understand exactly how our agency clients operate.
- We provide platform certified staff to ensure that quality is the same, or better, than an agency's own output.
- We can add a lot of bandwidth to your business.
- There is no long term commitment - you can flex resource up and down according to needs over time.
- We operate entirely whitelabel, so an agency's client base just experience your same great service regardless of how busy you are.
- Often our resource can be cheaper than existing staff.
Most outsourced development companies are "one trick ponies" - mainly providing developers. At On Tap we are also providing other whitelabel services:
- Project discovery - ensuring that new projects get underway in a professional way, with a deep requirements gathering process that augments your own.
- Pre-sales - actually helping you win business!
- QA - helping you maintain and improve the quality of your work output.
- Helpdesk - dealing with life cycle cient requires (config, development, etc) whilst you concentrate on new build projects.
We are enabling our clients to scale without fear, lower their operating costs, and manage risk in a very challenging economic situation.