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How to Cut Costs at an Agency and Grow Your Clientele
Julia McCoy
Thursday, 10th Oct 2024As a veteran agency owner, I’ve spent countless hours searching for the golden ticket: how to cut costs at an agency without sacrificing growth.
And believe me, I get it. Finding that delicate balance between responsible spending and continued expansion feels like a never-ending tightrope walk.
Running an agency in today’s environment is no picnic. Clients want top-notch work at affordable prices, and great talent is hard to come by and even harder to retain. This forces many agency owners into tough decisions, sacrificing their profits to stay in the game.
But what if I told you there’s a way to actually grow your clientele while reducing your overhead? Learning how to cut costs at an agency without it looking like you’re scaling back isn’t magic; it’s a smart strategy.
I’ve learned a thing or two over the years, and I’m ready to share how I turned my 100-person writing team into a lean and robust million-dollar agency.
Table Of Contents:
- How Cutting Costs in Your Agency Improves Profitability
- 1. Restructure Your Workforce
- 2. Outsource to Save Time and Money
- 3. Go Remote and Reduce In-Office Costs
- 4. Streamline Processes to Do More With Less
- 5. Give Your Marketing a Makeover
- 6. Analyze Tax Savings
- 7. Research and Compare Insurance Policies
- 9. Assess Your Current Vendors and Negotiate
- How to Cut Costs Without Sacrificing Growth
How Cutting Costs in Your Agency Improves Profitability
Throughout my 10+ years as an agency owner, I’ve learned that running a lean, mean, profit-generating machine is all about balance. You need to deliver exceptional marketing and SEO services to your clients while keeping a close eye on your bottom line.
And let me tell you, it’s not always easy!
The key is to cut costs strategically – without sacrificing quality. This means taking a hard look at your expenses and identifying areas where you can trim the fat.
Are you overspending on software subscriptions? Can you negotiate better rates with your vendors? Could you be automating tasks that are currently eating up valuable employee time? These are just a few questions to ask yourself.
Here’s the bottom line: when you reduce unnecessary spending, you free up more resources to invest in your agency’s growth. This could mean hiring top talent, expanding your service offerings, or investing in powerful tools that automate tedious tasks and improve your overall efficiency.
So how can you cut costs at your agency? Here’s my list of 9 detailed cost-reduction techniques for any business.
1. Restructure Your Workforce
I’m not gonna lie, folks – payroll can be a big, scary beast in any agency’s budget. But that doesn’t mean sacrificing quality. Cutting salaries while maintaining quality staff is achievable.
I’ve seen firsthand how agencies struggle to find and keep qualified personnel, especially in a climate where digital jobs are in short supply and agencies are finding it difficult to recruit talent.
You need to make smart decisions. Restructuring your workforce isn’t always about laying people off – it’s about making strategic moves that benefit your bottom line and boost operational efficiency.
Reduce Staffing Costs Without Downsizing
One of the biggest challenges in navigating economic uncertainty is figuring out how to reduce manpower costs without sacrificing growth. Many business owners believe downsizing is the only option, but I’m here to tell you it’s not. You can absolutely optimize your agency’s spending and keep your talented team intact. Here’s how:
- Flexible Work Arrangements: Allowing your staff to work in flexible shifts not only saves you on overhead costs but also boosts employee satisfaction. You can reduce office space and utilities while still keeping your team happy – and employed.
- Cross-Train Team Members: Instead of hiring specialists for every task, start cross-training your staff. In my old agency, we taught our writers to become SEO specialists. Some even learned graphic design! This way, they could wear multiple hats and we could adapt to project needs without adding more people.
- Encourage Professional Development: By investing in my team’s skills, they can take on more responsibilities and bring new ideas to the table. This often leads to higher productivity and less need for outside help.
- Optimize Workflows: I did a deep dive into our processes to identify any bottlenecks. Streamlining workflows helped us do more with the same resources, ultimately saving on time and costs.
- Performance-Based Incentives: Instead of giving raises across the board, I shifted to a model where bonuses are tied to performance. This not only motivates the team but also keeps salary costs manageable.
By taking these steps, you can keep your team intact while also being mindful of costs. It’s all about finding the right balance and being a little innovative!
Embrace Automation to Streamline Operations
The right tools can be game-changers for your agency. Think about all those repetitive, time-consuming tasks your team handles daily – market research, content briefs, social media scheduling, reporting – the list goes on. Now imagine if you could automate a big chunk of those tasks. That’s where powerful marketing automation platforms come in.
Investing in the right tools can streamline processes and reduce manual workloads. I love using Kit (formerly ConvertKit) for email marketing and Buffer for social media scheduling. It saves time and helps us operate more efficiently.
Let me give you a real-world example. Let’s say you’re spending $6,000 per month on content briefs alone (that’s one dedicated content strategist!). With a tool like BrandWell, you can automate 80% of that process, saving you a whopping $4,800 each month. That’s money you can reinvest in your team or other growth initiatives.
Maintain a Talented Team
As an agency owner managing 100+ people, I’ve learned that one of the best ways to cut costs is to build a talented in-house team.
I know what you’re thinking: “How can I save money if I’m paying my employees more?”
But trust me on this. When you invest in top talent, you’re actually investing in long-term cost savings.
A skilled team delivers exceptional results. They understand the intricacies of SEO services, content marketing, video marketing, and social media, consistently exceeding client expectations.
Plus, nobody likes employee turnover. It’s expensive and time-consuming.
When you have a talented team in place, you create a stimulating and rewarding work environment. This fosters loyalty and reduces the likelihood of your top performers jumping ship.
Less turnover means fewer resources spent on recruiting, hiring, and training new employees.
Cut Back on Training Costs
Think about it: a talented team requires less training. They come in with the skills and experience necessary to hit the ground running. They’re quick learners who can adapt to new technologies and strategies.
This translates into significant savings on training programs, workshops, and onboarding processes. Your marketing agency can allocate those resources elsewhere.
2. Outsource to Save Time and Money
Hiring full-time employees can quickly eat into your profits. The good news is, you don’t need full-time employees for every role.
There are smarter, more cost-effective ways to build a talented team without breaking the bank.
It’s all about finding the right balance between hiring in-house and strategic outsourcing.
Outsourcing and Freelancers: Save and Scale
Consider the gig economy. Skilled freelancers can handle specific tasks like design, content creation, and social media without the long-term commitment of salaries, benefits, and office space.
Outsourcing tasks like bookkeeping, accounting, and customer service can free your in-house staff for bigger projects.
Both are great ways to save on overhead costs and scale your operations quickly.
Need help with finding the right people? Check out my in-depth guide on how to hire a content writer.
When to Outsource for Agency Growth
Consider outsourcing specialized tasks or projects that don’t require a full-time employee. For example, you might need help with:
- Web development
- Blog writing
- Graphic design
- Video editing
- Pay-per-click (PPC) advertising
- Email marketing
- Social media marketing
By outsourcing these tasks, you can tap into a global pool of talent and get the expertise you need without the overhead of a full-time employee. Plus, you can scale your outsourcing up or down as needed, depending on your agency’s workload.
3. Go Remote and Reduce In-Office Costs
As a veteran agency owner, I’ve learned a lot about cutting costs without sacrificing quality or growth. One of the best decisions our agency ever made was switching to a remote-first model. It not only allowed us to reduce our overhead significantly but also opened up a wider pool of talent.
Think about it: renting office space in a prime location can eat a huge chunk out of your budget. Add in the costs of utilities, office supplies, and equipment maintenance, and it’s a significant expense, especially for growing agencies. By going remote, you can eliminate or drastically reduce these costs and reinvest those savings into other areas of your business.
Boost Productivity and Employee Morale
Moving to a remote work setup isn’t just about saving money; it’s also about boosting productivity and employee morale.
According to a Stanford study, “Home working led to a 13% performance increase, of which about 9% was from working more minutes per shift (fewer breaks and sick days) and 4% from more calls per minute (attributed to a quieter working environment).”
Based on research, remote workers tend to report higher levels of productivity, better work-life balance, and greater job satisfaction compared to office-based employees, largely due to the flexibility and autonomy offered by remote working arrangements.
When your team is happy and engaged, it translates into better client work and a stronger agency culture.
Attract and Retain Top Talent
In today’s competitive job market, offering remote work options can give you a significant edge in attracting and retaining top talent. By eliminating geographical barriers, you gain access to a wider pool of skilled professionals.
Plus, offering flexibility and remote work options can be a powerful incentive for talented individuals looking for a better work-life balance.
4. Streamline Processes to Do More With Less
You know the saying – time is money. At any agency, lost time directly translates to lost revenue. And there are so many productivity killers lurking in those daily routines.
Automate, Automate, Automate!
One of the biggest expenses for agencies is labor. But what if you could automate some of those tasks that eat up your team’s time?
With today’s technology, you can! Think about your workflows and identify areas where you could implement tools to streamline processes.
Here are BrandWell, we’ve been helping hundreds of agencies automate their content marketing processes to reduce labor costs while increasing productivity.
One of our first customers, Mickey Anderson, used to struggle with the long hours spent brainstorming ideas, researching topics, and creating blog outlines, not to mention the time needed to put all these together and write the actual article. Since using BrandWell, Mickey has saved 60% on labor costs because she now has only 1 writer instead of 3 on her team. And she has increased her profit margins by over 30% — per project! Read about Mickey’s story here.
And then there’s Alex Johnson who runs an agency in Dubai. He used to pay $295 for a content brief that took three weeks to complete! Thanks to BrandWell, Alex was able to remove 5 extra steps and 2 human roles from his workflow. Learn how he did it in this case study.
We all have tasks that make us think, “There’s gotta be a better way”. It might be tracking time spent on various activities, client communications, social media, invoicing, or scheduling meetings. These mundane tasks eat into valuable creative time. Using tools that manage processes effectively frees up our teams for big-picture projects and innovative ideas.
Maximize Meeting Time
Ugh, those endless meetings, right? Meetings should never be a time filler. When possible, set a predetermined time limit and stick to a clear agenda. This helps everyone stay on track.
Encourage people to use platforms like Slack for quick questions instead of scheduling a 30-minute meeting that could have been resolved in five minutes of chat. This saves you valuable time and keeps things moving efficiently.
Reorganize Departments
Managing a mid-sized to large-sized agency? How many departments do you have? Do you really need them all?
If you have separate departments for content strategy, writing/editing, design, and SEO, take a hard look at your agency and how you could do things differently. Maybe you can merge your content and SEO departments? This could help you cut costs and make your team work more efficiently. Consider which departments you can combine to streamline processes and reduce overhead.
Back when BrandWell was still Content at Scale, we had a team of 3 writers, 2 designers, and 1 editor publishing articles for our blog, plus an SEO specialist who took care of keyword research and link building and an editor-in-chief who managed the whole team. With our tool evolving into the powerful, all-in-one brand growth engine that BrandWell is today, we now have only 1 writer and 1 SEO specialist running the show!
5. Give Your Marketing a Makeover
When times get tough, a common knee-jerk reaction is to cut marketing expenses. And, hey – sometimes that’s necessary. But for agencies, our client pipeline is our lifeline. So, it’s about cutting back without choking off your potential client flow.
Before making any rash decisions, remember that cost reduction isn’t always about total elimination – it can be a shift in strategy to embrace budget-friendly solutions. Examine your cost structures and see what makes sense.
Prioritize Existing Clients: Deliver Exceptional Customer Service
Keeping the clients you have should always be a top priority. If existing clients are satisfied, they’ll refer new ones, saving you significant marketing spend.
Happy clients are basically free advertising, and word-of-mouth recommendations are still marketing gold. If a happy customer brings in five new clients, you’ll be able to save money promoting your services while keeping your agency on people’s minds.
Rethink Your Marketing Efforts: Embrace Affordability and Versatility
Instead of traditional advertising campaigns, look to targeted social media. You can grow your audience organically with content that really speaks to them.
Create case studies that demonstrate the incredible results you’ve helped clients achieve.
Develop an SEO strategy that helps you connect with potential clients actively searching for the services you offer.
Start building that email list and create personalized, captivating campaigns that your audience can’t ignore. This approach will help you build relationships with future clients without costing you an arm and a leg.
Don’t forget to audit your website. Does it clearly communicate your value? Showcase your work with compelling visuals and client testimonials. It’s 2024 – we want that website singing.
And be consistent across all your digital platforms. Building a cohesive, professional image doesn’t require a huge investment; it requires intention and strategy.
6. Analyze Tax Savings
Tax season. 😔 It’s something we all face as agencies, right? But are you being as strategic as you can be?
This is one area where working with a qualified professional can really pay off. A good tax accountant who understands the marketing and SEO world can help you identify deductions you might not know about.
They can also help you take advantage of tax credits that can save your agency money. For example, did you know there are tax credits available for businesses that offer employee health insurance? There might even be some for your agency if you’re doing green initiatives! Who knew, right?
But finding those credits is just half the battle. You also have to keep meticulous records throughout the year to back up those deductions. 🧾
That’s where having systems in place is super important. You don’t want to be scrambling at the last minute to find receipts and invoices.
7. Research and Compare Insurance Policies
This might seem obvious, but you’d be surprised how many agencies let this one slide! We all know insurance is important, but it’s also something we like to set up and then forget about.
This is a big mistake! Why? Because the insurance market changes constantly. What your agency needed three years ago might be overkill today.
For example, maybe you started with a robust general liability policy. But, as you brought on more remote workers and downsized your office space, you might not need as much coverage.
The same goes for your professional liability insurance. Take a good hard look at your policies. Are there areas where you can decrease your coverage and save money?
Don’t be afraid to shop around for better rates, too. There are a lot of insurance providers out there. A new one might be a better fit for your agency.
You can also often get a discount by bundling different types of insurance together. For example, you might be able to get a discount for bundling your general liability and professional liability insurance.
And here’s another thought: How are you handling your employees’ health insurance and benefits? As an agency owner for over a decade, I’ve learned this is one of the biggest expenses agencies face. If you’re on the hook for providing these, it’s crucial to explore all your options.
You might find a more affordable plan or consider a Professional Employer Organization (PEO). A PEO can handle things like payroll, benefits, and even some HR functions. This can save you a ton of money in the long run.
8. Identify Hidden Money Leaks
We tend to focus on the big-ticket items: rent, salaries, and equipment. And while those are important, the real cost savings are often found in those sneaky little expenses that fly under the radar.
Think about all the “essential” office supplies, magazine subscriptions, that extra space you are not utilizing, and the free coffee and snacks that add up. That’s not to say all office perks are bad – happy employees are productive employees. But maybe we’re stocking gourmet coffee when a regular brew would do?
Taking a good, hard look at every line item in your budget will surprise you. Every business owner should incorporate this type of cost management into their routines.
Small Cuts, Big Impact: How to Trim Unnecessary Expenses
It’s time to channel our inner Marie Kondo and ask, “Does this expense spark joy (and profit) for my agency?” Do you need every single software subscription? Could you negotiate a better rate?
Review Your Agency Expenses
To be able to trim costs down, you need to understand where your money is going before you can make it grow. Think of it like spring cleaning but for your agency’s budget.
Take a hard look at your agency’s expenses. Are you spending too much on pantry supplies? Unnecessary travel? Entertainment? Could you be saving money with a more streamlined approach?
Don’t be afraid to ask for a discount or consider alternatives. You might be surprised by how much you can save. This is about working smarter, not harder.
Review Your Software Subscriptions
In the world of digital marketing, it’s easy to get caught up in the excitement of trying new tools. But before you know it, you might be paying for a dozen different subscriptions that you don’t even use regularly.
Take an inventory of all your software subscriptions and ask yourself:
- Do you really need all of these tools?
- Are there any overlapping features?
- Could you get by with a free or lower-tier plan?
You might be surprised by how much you can save just by trimming down your software stack.
Speaking of tools, I have to give a shout-out to BrandWell, my secret weapon for maximizing profitability. This all-in-one brand growth platform can be a game-changer for your agency.
Imagine being able to automate content audits, keyword research, competitor analysis, long-form blog generation, on-page SEO, link building, content repurposing, and the creative tasks of writing emails, ad copy, landing pages, ebooks, newsletters, and YouTube video scripts – all from one subscription service!
When I joined Content at Scale back in early 2023, we managed all our projects on Airtable, Notion, and a host of other apps. But when we added a keyword research tool, a content planner, and a content calendar to the BrandWell suite, we ditched all of them – saving us thousands of dollars a year.
Think about it: the cost of hiring a team of humans to handle all of these tasks adds up quickly – salaries, benefits, office space – it never ends! With BrandWell, you get the power of a full-service marketing team at a fraction of the cost.
By opting for a single BrandWell subscription instead of paying for redundant tools, you could potentially save hundreds of dollars every month!
9. Assess Your Current Vendors and Negotiate
When trimming the fat from your budget, one of the first places to look is your vendors. This is where things can get interesting. We all have them: SEO tools, social media management platforms, project management software – the list goes on. But are you getting the best bang for your buck? Probably not.
First, take stock of every single vendor you use. Are you using all the features? Are there cheaper alternatives? Could you bundle services for a discount? You might be surprised by what you find.
Next, don’t be afraid to negotiate. Loyalty is great, but so are savings. Reach out to your vendor contacts and see what’s possible. A lower monthly rate or a discount for an annual subscription can make a real difference.
How to Cut Costs Without Sacrificing Growth
Figuring out ways how to cut costs at an agency doesn’t have to mean sacrificing your team or quality. By embracing flexibility, leveraging technology, and optimizing processes, you can run a leaner operation that still delivers great results. It’s all about being resourceful and creative with our existing resources.
BrandWell helps you streamline your operations, improve service delivery, and scale your agency more efficiently. That’s smart cost-cutting that fuels growth.
I’ve seen firsthand how these strategies not only save money but also boost morale and productivity. So, let’s get to work and find more smart solutions together.
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