I’ve got good news and bad news…
The economy is getting battered right now with the Coronavirus. Countless agencies are scrambling just to survive.
That’s not the bad news though…
The bad news is that this is going to happen again. I guarantee you there will be more recessions, more dips, and more economic crashes during your life as an agency owner.
But the good news is that you can plan for it. This is a part of life as a business owner, and you can start doing things today to protect yourself.
Here are seven ways you can survive- and thrive- during any economic crisis.
Tie your service to an essential outcome (like revenue)
You’ve heard about “features vs. benefits” before. The classic copywriting example is “Nobody wants a drill, they want a hole.”
Well the same thing is true for your service. No one wants your product or service, they want the benefits your service provides. They want the end result.
Therefore as a business owner, it’s your job to articulate a clear and valuable end result.
Here’s an example: one of the products my business sells is a WordPress plugin that generates on average 40-75 new leads per month. Not only do my clients use the plugin to generate leads for their own businesses, but many of them also charge up to $10,000 to generate leads for their clients.
Now, if the result I was selling was, “A WordPress plugin,” how easy do you think it would be for people to say “No” during a recession? Pretty easy, right?
But what if I articulate the end result as, “The ability to make up to $10,000 from a single client”?
By changing the positioning, suddenly it becomes much harder to say no to my offer, because clients think, “I’m not saying no to a WordPress plugin, I’m saying no to revenue!”
And if you can demonstrate that your service brings in more revenue than it costs, it becomes a no-brainer to buy your product or service. It pays for itself.
Create recurring services that are hard to replace and painful to stop
Here’s a mistake I see a ton of beginning agency owners make:
When they’re starting out, they haven’t refined their service into a crystal clear offer. They require too much oversight and input from their clients. They say things like:
- “Here are a bunch of different options, let me know what you like the most.”
- “I’m flexible, I can make the end product look however you want, just let me know.”
- “What do you think we should do about X?”
They think they’re being agreeable, but they end up putting a ton of work on the client’s plate. And they act more like an employee than an agency owner. Now the client has to run their own business and manage you as you run yours.
That’s why I like to create “Green Light Services.” This means a client gives us the green light, and work gets done. WE are the experts. We don’t require management and guidance from our clients because they’re paying us for our expertise.
Clients love this because it makes less work for them and they have the reassurance that we know what we’re doing. But there’s another huge benefit as well…
When they only give us a green light, it makes it really hard for them to replace our service.
Here’s what I mean: one of the most profitable services I offer in my business, and that we teach our customers to offer, is “Social Posting.” For a low monthly price we schedule high-quality social media posts to get published every day on our clients’ feeds.
There are a ton of steps involved in this: coming up with content ideas, writing the copy, doing the graphic design, picking the right scheduling tool, scheduling all of the posts, writing the post copy, analyzing the data and doubling down on content that performs best…
So if our clients think about canceling our service, they look at this list of tasks and think, “Wow, it’s going to take a ton of work to do this ourselves.”
If they cancel the service, they either have to say goodbye to the results you’ve been delivering, or they have to figure out how to do all of the work themselves. Both are painful options, so it’s easier to just continue with your service.
Use Hook Services to land cautious clients
During recessions, businesses need to be much smarter about how they spend their money. It’s still important for them to advertise, but they can’t afford to take risks that don’t pay off. So it can be difficult to convince prospects to buy your service if they’re unsure of the ROI.
This is where “Hook Services” come in.
A Hook Service is a low-cost offering that is designed to get your foot in the door and demonstrate your value. An example I’ve done many times is a social media branding package. For one low price we’ll create a new logo as well as header images for all of the major social media platforms. (Read this article to learn more about how Hook Services work.)
Am I going to make my fortunes as a graphic designer? Do I want to spend all my time creating social media images?
But this allows me to do a bunch of really valuable things:
- Demonstrate the quality of the work I deliver.
- Get clients used to hearing from me and build a relationship with them.
- Release endorphins in my clients by cooperating on a project and creating a great final product together.
- Open the lines of communication so I can pitch more ideas and services.
So during a recession when people are pinching pennies, it’s going to be hard to approach a new prospect and convince them to spend thousands of dollars with me. But it’ll be much easier to get them to spend $50, especially if I deliver massive value for that price point.
Then once my foot is in the door, I can pitch higher-ticket items and they’ll be more receptive.
Get clients used to hearing from you
A hook service is a great way to open the conversation with prospects and to build relationships with new clients. But you can apply the same principles to your current clients.
Let’s say you provide a great service, but it’s mostly automated. My newsletter service is a perfect example. Clients pay us each month and their newsletters automatically get sent out. Everything is on autopilot and there’s not much reason for us to talk.
But it’s important for me to create reasons to talk to them. I’ll reach out and share strategies that are working for my other clients. I’ll send them articles about their industry I think they’ll like. As long as it’s a way of providing value and making it worth their time, I’ll come up with reasons to send an email.
This trains my clients that whenever they see my name in their inbox, it doesn’t seem out of place. They instantly think, “Oh, I should open this because they’ve always got something good for me.”
Imagine a couple clients cancel and you want to replace that income quickly. You think of a new service you can sell to your current clients. Now you can email them and tell them about it and they’ll open your email because they’re used to hearing from you.
Create systems and processes to be efficient with your time
You’ve heard me say this before: as an agency owner it’s your job to make sure that work gets done, NOT to do the work yourself.
This is a trap a ton of beginners fall into. They sell graphic design services, but they do all the graphic design themselves. So really they’re not an agency owner, they’re a freelance designer and they use their agency to create jobs for themselves.
What you need to do instead is focus on what you do best and outsource the rest:
- Hire a freelancer on Upwork.
- Find some Fiverr gigs you can use on an ongoing basis.
- Buy software that automates part of your work.
This will skyrocket your hourly rate. Here’s what I mean…
Let’s say you offer Social Posting like I mentioned above, and you do all the work yourself. You land a gig for $300/month, and it takes you 20 hours to do all of the tasks I outlined. That means you’re working for $15/hour.
Compare that to this scenario: you land the gig, but you have two freelancers in the Philippines who work for $8/hour. One is a graphic designer and one is a VA who can manage the project and schedule the posts. Since they specialize in their role, they work twice as fast as you.
So $8 x 10 hours = $80 total. Subtract that from $300/month and you’re left with $220.
Let’s say it takes you two hours to get the lead, close the sale, and manage your team. That means you went from making $15/hour to $110/hour. Not a bad raise! (Not to mention with Social Posting you can reuse the same posts for subsequent clients, so you don’t need to hire the freelancers and your margins are 100%.)
I can tell you from working with countless agency owners that these numbers are completely realistic. I see this exact scenario play out all the time.
The point is, by outsourcing the “grunt work” and by creating systems and procedures to work efficiently with your time, you can skyrocket your personal hourly rate.
And here’s why that’s so incredibly important during the Coronavirus scare, or during recessions in general…
If you do all of the work yourself, what happens if your clients ask for a temporary discount to make it through the crisis? Now the value of your time drops below $15/hour.
Or what happens when clients cancel and you have to spend more time generating leads and drumming up business? You quickly run out of hours in the day as you’re spending more time on outreach while still doing all the work yourself.
But what if you’ve created the systems and procedures we’re talking about? Now you can afford to spend time on outbound marketing. You can afford to spend time doing Facebook lives. You can afford to build goodwill with your prospects who are freaking out.
You can afford to do all of those things because you’ve built margins into your business, and you’ve separated your time from the delivery of your service.
Don’t use your agency to create more work for yourself as a freelancer. Treat it like a real business, build these procedures, and that will give you the time and resources to be able to weather any storm.
Always be planting seeds
You’ve probably noticed something over the last week: you’ve been getting tons of emails from companies you haven’t heard from in months or years.
I did a free trial for a software product a couple years ago, and the other day I got an email from them about the Coronavirus. I thought, “Why do I care about what some SaaS company has to say about a virus?!” And I’m sure the same has been happening to you too.
It’s blatantly obvious what’s happening. Their businesses are getting hammered, and now they’re desperately reaching out to everyone on their list.
Have any of these “desperation emails” convinced you to do business with them? Have you bought a single product or answered a single email?
Yeah, me neither.
Here’s what I’m doing instead. For years now I’ve been in the habit of sending “goodwill emails”:
- If I hear an awesome podcast episode, I email the guest and tell them thank you.
- If I think of two people I know that could help each other, I ask if I can introduce them.
- If I implement a strategy I learned from someone and it generates results, I email them and give them a little testimonial.
- If I hear someone get shouted out in a YouTube video or an article, I send them a link.
These things take 30 seconds to do, but they make a huge impact on people. It shows that you’re thinking about them and you’re looking out for them.
Then in times like these, I can reply to an old email thread and say, “Hey I was thinking about you today and I think I might be able to help…”
Now it doesn’t come across as sounding like a desperation email because I’ve already put in the work to develop the relationship. So start cultivating this habit today. Don’t only email people when you want something from them, start reaching out and giving value on a regular basis.
Never stop the lead flow
“Planting seeds” is a subtle habit. I do this to open conversations and to create goodwill. These are NOT blatant sales pitches.
But the same idea applies to outbound marketing as well.
So often I see people make a fatal mistake: they get a couple clients, they start doing the work themselves (instead of outsourcing it), and they’re so busy that they stop doing outreach and generating more leads.
So they finish the project and the client decides not to continue. Or the Coronavirus hits and clients have to cancel the service. Suddenly there’s no new work on the horizon and the payment that came in two weeks ago is almost all spent already.
That’s why this is one of the most critical lessons an agency owner can learn: NEVER STOP THE LEAD FLOW.
Even if business is going great…
Even if you’re low on time…
Even if you have more clients than you need…
Always carve out time every week to do your outreach. That way when there’s an unexpected dip, you already have leads coming into the business to convert into sales.
I know this is a scary time, but I want you to know that we’re going to make it through this just fine. YOU are going to make it through this just fine.
I hope you learned an idea or two that gives you hope and reassurance. Now it’s time to IMPLEMENT.
Start taking action and meet these challenges head on.
And if you’re facing particular obstacles that aren’t addressed in this article, leave a comment below. Let us know what you’re struggling with and let’s help each other come up with solutions.