How Can Web Designers and Digital Agencies Win and Retain More Customers?
We launched RapidSpike in October last year, and my first job therefore was to get out there and start spreading the word. Given all great websites/web apps start with a developer sat at a desk somewhere, I naturally approached the digital agency sector as a first port of call. So far, give or take a few, I have approached in the region of three hundred agencies and freelance designers.
What I observed quite surprised me.
What isn’t surprising is that almost without exception, every agency contact I have met has looked pretty cool – is based in a trendy office and has some great reference sites. Clearly nothing surprising so far, but what did surprise me relates to the sheer number of agencies out there with a lack of emphasis on post sales.
It might sound odd but I view competition as a good thing. It proves that there is business to be won and it keeps you on your toes. It does mean however that you have to be on top of your game to win and keep your customers and it makes it harder to stand out of the crowd.
Balancing Creativity vs Sales
What I’ve observed is a disproportionate amount of focus on the design side of the business compared to support or after sales. Most agencies I met (not all) put a great deal of focus on the creative side of the business – which is clearly extremely important – but they put less focus on after sales services. Maybe it’s because some customers are not that interested, or that they want to take control after the website is built; but I do feel many are missing a trick here.
So let me tackle my point on competition and differentiation:
Given the volume of competition, I think it is really important to build a story that has a demonstrable edge. Something to hang your hat on if you like. We can all talk the talk in a meeting but the agencies that back up the talk are the ones that will stand out in my opinion.
This may surprise you but – you are not as unique as you may think you are. I was taught early in my sales career, that in the customer’s eyes everyone looks the same. We naturally don’t think this, but it is the truth. To the customer you are one of several designers or agencies bidding for business. You all look cool, have great references so it is very difficult to leave a lasting, differentiated impression with the customer. If you don’t believe me try the following exercise:
The next time you are about to close a meeting with a potential new customer ask them what they like about your business and what they think differentiates your approach.
I have tried this and the response may surprise you. Interestingly, the first time I did this the customer couldn’t give me an answer.
It sounds obvious and many reading this will think I am probably mad but it has really surprised me how many agencies don’t have a comprehensive story – post launch. In many cases, support felt like it was a bit of an afterthought.
Building a comprehensive story presents a wonderful, relatively easy opportunity to differentiate
If support is positioned correctly – and by that I mean a suite of documented support services with clear deliverables (Reports) – then support as a service could go some way to helping digital agencies stand out from the crowd and will hopefully help to retain more customers.
What do customers want (post-launch)?
To reinforce this point, let’s remind ourselves of what customers want post launch:
- They want to know that their website is performing as it should.
- They want to be able to present to their own managers that the website is meeting its performance KPI’s. Managers love reports!
- They want peace of mind that if something goes wrong the problem will be addressed immediately.
If you can help give the customer want they want, they will in turn, give you what you want. Even if you are a freelance web designer, providing an enhanced support service is relatively affordable, easy to implement and will help to improve revenues.
Recently I have been working with a forward thinking agency, based in Leeds, our base in the UK.
This particular agency client has created three simple service levels.
- The first is purely REACTIVE. The customer calls when there is an issue and the support team reacts.
- The second MONITORED. The support team monitors the website and reacts when an alert is triggered.
- The third is MANAGED. This is the one I like the best because it is the most engaging and provides a great opportunity to build a differentiated story. Basically the support team monitor the entire website eco-system (network/services/application) at a granular level and make ongoing improvements to maintain the sites health and performance. They even track the domain and SSL expiry.
Clearly, each support level is tiered to meet different customer needs and comes with an appropriate service level. Personally, I loved the approach and I am sure it will help the business differentiate and also grow its recurring revenues.
Building a Recurring Revenue Stream
This brings me onto my next observation relating to the commercial model of digital agencies.
It’s worth remembering, healthy companies have strong recurring revenues!
Interestingly I have looked at building an agency in the past but what has always worried me is the traditional business model which is one front loaded contractual business. In other words, the majority of the recognised revenue is up front and often the client will take control of the website post launch. This means that there is a risk that the customer could in-source or find an alternative supplier the next time round. Of course either of these options will result in lost revenue.
Even in my local area I have witnessed agencies come and go and often the route cause relates to the loss a key client and with it, business critical revenue. If some of these agencies had put more focus on growing recurring support revenues then I am sure some may have weathered the storm better.
By the way, I am hugely envious of some of the agencies I have spoken to. I have met some truly great, highly profitable businesses but no one is perfect and I do feel that there is a genuine opportunity for most to differentiate better and in doing so, I believe that they will retain more ongoing revenue and improve customer retention through improved support services.
Compound Revenue and Valuations
Final point: recurring revenues are great as they help business grow compound year on year. Business with strong ongoing revenues tend to be healthier and of course, if you are ever thinking of selling your business, the gearing on annual contracts is much higher than one off fees.
So, to recap:
- Differentiation in any market is hard. Customers often feel everyone is the same.
- Think about what customers want to help them in their roles.
- Implementing a world class great support is relatively affordable and easy to manage.
- Back up the talk with demonstrable engaging service levels. Most won’t which will help you look more credible.
- Recurring revenues help when times are not so good and increase the value of your company.
Good luck for 2016 – I hope some of my points will help you win and retain more business.
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