How Can Full-Service Marketing and Branding Agencies Diversify To Increase Revenue?
Custom Promotional Products For Branding Agency Clients
As a full-service marketing and branding agency, your team's work likely falls into two major categories: strategy and execution. You advise clients and help them develop strategies that will bring revenue to their businesses. But what about your agency? Many digital agencies forgo an easy additional revenue stream, providing branded promotional products to their clients. This opportunity creates a way to diversify and supplement your revenue with low effort.
The Usual Revenue Streams for Agencies
Your agency likely makes its money primarily from charging your customers for your services. This may be in an hourly model, a commission model, a fixed-pricing model or one of several other methods for pricing. While each of these pricing models has benefits and drawbacks, they all have one thing in common: you're getting paid for the time you put into planning and creating marketing campaigns.
This makes sense, of course, because as a marketing and branding agency, your business is built around running campaigns that help your customers grow. You most likely spend the majority of the client's budget on ad-buys, creating marketing collateral and generally getting your client's message out to its audience. Then a portion of the budget, calculated using any of the above models, gets paid to you.
An Opportunity for Diversification
Full-service agencies handle marketing solutions from end to end for their clients. However, if yours is like most agencies, you pay others to create the physical marketing collateral, such as custom retractable banners, that your clients use at trade shows. Perhaps your team provides the design work, but ultimately you outsource the actual product.
This is a missed revenue opportunity. Rather than simply outsourcing the work, you can directly sell the item to the client yourself. This opens up several new ways to earn revenue for your agency.
How You Can Offer Products To Your Clients
The opportunity to open up new revenue streams is always an exciting one. However, it also comes with the question of how to make the new stream work. After all, you likely outsource the creation of those marketing materials because you don't have the in-house capability to produce them.
One option, of course, is to develop that capability yourself. Unfortunately, this is rarely practical because of the investment necessary to get the required production equipment. That investment is only feasible for larger agencies. Even then, it rarely seems logical to develop a significant new operation.
The smarter option is to act as a reseller for an existing production company. For example, if your client needs a trade show display, you simply resell it to them from your display producer. Your client gets the display it needs, your producer gets additional business and you get a portion of the revenue from the sale of the display. It is a situation in which everyone wins.
Earning Additional Revenue From Full-Service Clients
The simplest way you can earn money from directly selling promotional products is through the price of those items paid by your full-service clients. You work with a producer you have a close relationship with and get a cut of the revenue by reselling their products. It is an arrangement that can benefit everyone while also diversifying your agency's income.
Earning Revenue as an Independent Line of Business
Of course, you don't only need to sell to your full-service clients. You can develop your reselling efforts into a discrete line of business. It is a solid brand extension of your existing agency because it is directly related to what you already provide.
All you need to do is establish a sales team that will work on your reselling efforts. There is no need for operational backend because that is entirely handled by your producer affiliate.
This can bring in new types of clients who may not want full-service marketing. A lot of small businesses tend to operate primarily on foot traffic and basic local advertising. By offering this simpler option, you can draw in those clients.
Better yet, you can potentially convert existing promotional product customers into full-service clients. It creates a touch point with those customers that you may not otherwise have. So, not only does this add new sources of revenue, but it can also strengthen your existing, primary revenue stream.
Benefits of Diversification
Beyond the extra revenue, you can earn from reselling marketing collateral, diversifying also strengthens your business' foundations. When you can generate income in multiple ways, your entire operation is more resistant against any one line of business slowing down. There are ebbs and flows in every type of business, diversifying can help you make more of the peaks and more easily survive the valleys.
This opportunity can help you make more of your agency. It is simple to put into action with the right partner. A promotional product vendor can help you create a new line of business without needing to invest large amounts of money on new equipment or supplies. This could be your chance to significantly grow your business.