The Perfect Digital Agency Offer to Unlock 20X More Revenue (and Close Deals Faster) | Ep #620
Are you struggling with low agency profit margins? Are you tired of not winning the engagements you want and deserve? Did you know there’s an art to pricing in order to unlock 20X more revenue? That's 20X more than you are making right now!
When it comes to pricing, there are two common problems I see many agencies struggling with:
Low profit margins.
Not winning the engagements they should be.
Back in the day, I wanted to win high-profit engagements. I wanted the retainer clients because of the predictable income. I knew the combination of higher margins and predictable business would yield a healthy business and steady cash flow. But why is it so hard to accomplish? In my experience, it goes back to your approach.
Land 20x More Revenue by Making it an Easy Decision for Buyers
If you have a hard time landing the business you want it’s probably because you’re making it a difficult decision for the buyer. How? You’re selling the wrong thing first. Pitching a big project or long-term contract from the get-go is like proposing marriage on the first date. It’s a HUGE COMMITMENT to ask when you haven’t proved your worth yet. So the issue here is you haven’t created the perfect offer.
Mastermind member, Chris used to deal with this very issue. He owns an SEO agency and was charging $5,000 a month in month-to-month contracts. This was hindering his growth because clients normally stay with the agency for about 6 months, meaning they're worth just $30,000.
There were three things we needed to do in this scenario:
Make it an easier decision for the potential client.
Raise his pricing.
Transition to a long-term contract.
Steps to Creating the Perfect Digital Agency Offer
In order to 20X revenue, you need to have a plan. That starts with developing a foot-in-the-door offer, which is a small, low-cost offer that demonstrates your value as an agency. This type of offer should be low-commitment and a very easy 'yes'... an offer they can't refuse :) How can you benefit from having a foot-in-the-door offer? Well, clients who buy this offer are 20 times more likely to give you more money down the line. Overall, people are more likely to buy from you once they already know, like, and trust you.
It’s natural that you want to sell your core service first -- that’s your money maker! However, it’s a huge commitment for your prospect, and therefore a harder decision to make. YOU know your agency is awesome but they still have concerns and questions. It’s not a clear decision... yet. The solution here is to ease into a paid relationship first with a foot-in-the-door offer that highlights your expertise.
A lot of folks tend to over-complicate their foot-in-the-door offer so I created a tool to help agency owners develop your offer. Just go to agencymastery360.com/convert and download this free resource call the Foot in the Door Decider.
How to Build a Digital Agency Offer Ladder
The next step we did for Chris was to create an offer ladder, beginning with a foot-in-the-door. Start by asking yourself “What are you doing for free now that you could charge a small amount for?”
In Chris's case, he was spending around two and a half hours with each prospect giving them free strategy and advice. Instead, he switched to offering a one-hour paid strategy session where he could help them create an SEO Blueprint. They would go over some of their biggest challenges and highlight ways to solve them quickly. At the end of this session, the prospects who wanted help implementing this blueprint could sign on as clients.
Next Step in the Ladder: Small Project or Engagement
The next step in an offering ladder is a short-term project. Here you’ll be solving one of the issues you highlighted in the foot-in-the-door. This small project entails a slightly more significant financial commitment for the client. For instance, in Chris’ case, he offered a 3-month project for $15,000. This gives the agency 90 days to deliver results.
What do you think happens after your agency starts showing results? The client starts to trust you more and more. Suddenly, the decision to commit to a long-term relationship doesn’t seem so difficult. Also, this short-term project also gives your team time to get acclimated to working with this client, and them working with you. Chances are it goes really well and a long term longer-term relationship is beneficial but in the off chance they're a nightmare client you're only stuck with them for 3 months!
Next Step in the Ladder: Digital Agency Retainer
As the window starts to close on the short-term project and you know you want to continue working with the client, that is when you can propose a year-long retainer. For Chris, it was also an excellent opportunity to raise his prices and change that year-long retainer from $5,000 a month to $9,000 a month.
So ask yourself what is your value proposition? What kind of front-end, middle, and back-end offers do you have to entice your clients? The answer to these questions will help you create an offering ladder and a perfect offer.
Why Do You Need to Go Through the Offer Ladder Process?
I get a lot of questions about the foot-in-the-door offer. Most agencies, make the jump to start charging for something they used to do for free and tend to put gasoline on it. They create something so complicated that they confuse and overwhelm their prospects.
Just remember, you don’t have to teach them anything in the initial call. Just help them identify problems and prescribe the solution they need.
10-Step Framework to Build a Foot-in-the-Door Offer
1. Build rapport.
Work with what you got. If you see a picture of a golf course behind them, chat about golf briefly.
2. Lay out the agenda.
Let them know you have a framework you use to make sure you cover all the basis in these conversations. This will position you as an authority and keep you on track.
3. Identify why now.
Ask them “What made you reach out and why is it important now?” and check to know if they’re okay with the agenda.
4. Current situation.
Where are they now with revenue, marketing, and profits? You restate it to them like this: “From what you're telling me, I understand that you want this to happen. Currently, this is what's happened, you've tried this and then that happened. Is that right? Anything else I need to be aware of?”
5. Talk about the roadblocks.
Let them know you want to know their roadblocks by making a list of everything standing in their way.
6. Restate the value.
Go back to what you’ve discussed to make sure you have the full picture. “So let me get this right, you really want X but Y is in the way and costing you XYZ. Does that sound right?”
7. Prescription or solution.
Present your assessment according to what you’ve been told. “So based on what you’ve told me, it sounds like you need [your solution] in order to get [X benefit]”.
8. The promise.
This is where you start talking about what you do. Go through how your agency helps clients and the benefits your team gets for them.
9. Logistics.
This is where you can go more into detail on your prescribed solution. Go through the specifics of how it would actually work. You’d be surprised at how much educating your prospects on the process can help you win the deal.
10. The price.
Now that you’ve helped them determine where they want to go, where they are now, and the impact on their business, they’ll be more open to paying much more than prior to you walking them through the framework.
Do You Want to Convert More Prospects Into Agency Clients?
FREE COURSE: Discover the 4-system process to CONVERTING more agency clients at https://www.agencymastery360.com/convert In our videos series, we'll break down the steps you need to charge what you're worth, overcome common sales objections, and unlock up to 20X more revenue from existing clients.
