Wanna know the truth about retainers for agencies? z
Well, monthly recurring revenue is often claimed as “the holy grail” for agencies. The problem?
Most agencies don’t do them correctly and worse…the people teaching and selling how to have a successful agency via introducing MRR….haven’t figured out how to deal with the client churn.
Believe me, I’ve fallen victim to this in my agency.
It’s great to start when you want to get a quick $10k or even $25k/month but when it comes time to grow… the wheels fall off.
If you do retainers wrong you’ll have little to no profit, tons of stress, and headache.
Watch today’s video as I break down The truth about retainers for agencies.
Transcript / MP3
Alright. I gotta be honest with you. The whole sell agency retainers and focus on monthly recurring revenue in your agency is a trap. And I’ve learned this firsthand in building my own agency and after speaking to hundreds upon hundreds if not low thousands of agency owners over the last three to four years, they all feel the same. … Alright. I gotta be honest with you. The whole sell agency retainers and focus on monthly recurring revenue in your agency is a trap. And I’ve learned this firsthand in building my own agency and after speaking to hundreds upon hundreds if not low thousands of agency owners over the last three to four years, they all feel the same. So if you’re in your agency and you feel like you’ve been focused only on monthly retainers and you’re still not where you want to be, then this video is for you. And Hey, if you’re new to this channel and you haven’t yet subscribed, go ahead and click that subscribe button and click that notification bell so you don’t miss any of the new episodes because we released one every single week. Let me talk to you about why I think this whole concept of agency retainers and monthly recurring revenue is a trap and that focusing on it isn’t actually the Holy grail in growing my agency.What we found and what I’ve found after interviewing and having conversations with hundreds upon hundreds of agency owners is the fact that we play the game of thinking that the client is going to stick with us longterm. And then by them paying us monthly, we’re going to have the stability of, you know, knowing how much revenue revenue we’re going to have the following month and so on and so forth. And in theory that sounds really good, but in execution, most people actually get this wrong and they have so much work that is front-loaded. The setup time from hours to, you know, whatever you’re building or implementing or designing for your client, that oftentimes those retainers, especially if you’re selling something, you know, 1500 or $2,500 sometimes even $3,000 a month, you don’t actually recoup your setup time and your investment until month four. And what I’ve found in, you know, again, talking to hundreds if not low thousands of agents centers at this point is they’re not actually even breaking even by month three or four.And while they’re trying to get the retainers and thinking that they’re going to have these clients longterm. Most of these contracts, most of these clients are leaving around month six, seven and eight. Now, if you’re the exception and having clients to stay on for years and years and years, because maybe you’re selling like a web hosting package, I’m not talking to you, I’m talking about delivering premium, you know, high touch services each and every month. Selling a retainer is not the best way to go, but here’s why I think everybody focuses on this. Obviously the idea of knowing how much revenue you have coming in the next month, it makes you feel safe. It makes you feel secure, it makes you feel stable. But if you’re not recouping that initial investment from your own execution and your own labor until month four and clients are leaving shortly thereafter, you’re going to have a churn problem.And a lot of agencies that sell retainers have term problems because after you sell and execute, kind of that first scope of work as a part of your retainer, you go into this weird phase where you start saying yes to additional things because your client doesn’t really know how to get value from you and you don’t want to lose them because you don’t know where your next lead or a client is coming from. So you say yes and slowly and slowly your scope expands beyond things that you’re actually good at. And now you’re hiring the expensive contractors and freelancers for fulfillment and you’re not actually really good at that thing in the first place. So you’re basically taking the monthly recurring revenue that you’re getting from your monthly retainer that’s supposed to keep you safe and a majority of it’s going to somebody else just so that you can keep the contract for another month.So why are we focused on this? In theory, it sounds great, but very quickly, once we start having this scope expand, you get into this position where in order to fulfill on the work you’re bringing in new people and sometimes experts in order to deliver that result that that client wants. And you very quickly get into that game of needing to hire more people and your margin starts to decrease. And the reality was your margin wasn’t that great in the first place because you were charging 1500 or $2,500 a month for a retainer. So if you’re sitting there saying, well Greg, what the heck am I supposed to do? I want to share a couple of things that you should be focused on that I think are going to change the game for you that will help you continue to generate revenue each and every month that allows you to still get paid top dollar, have healthy margins, and this goes beyond just obviously selling front end packages because the real problem lies in the fact that most people selling retainers don’t know where the next lead and or client is coming from.So I’m going to share four principles that you need to focus on inside of your agency or your freelancing business to make sure that each and every month is steady and even growing from a revenue perspective, but you’re not getting caught in all of the downside of having these, you know, retainers that continue to expand in scope creep and kill your margins. Principle number one is work on getting steady lead flow. Most agencies that I talk to, it’s like the classic case of the cobbler’s kids have no shoes. They’re out there helping their clients grow their business, but they have no email list. They have no any sort of lead generation and plan inside of their business, which means when they get a client and they need, they spend all of their time on delivering the result for that client. But sales and marketing stopped.And when sales and marketing stop, obviously there’s no opportunities in your pipeline and you’ll do anything to keep the client that you currently have, even if it means you know, eliminating your margins and having to go get help because you don’t know where the next client’s coming from. So the first thing that you could do is actually start focusing on your own lead generation activities. Design a lead magnet, create a webinars, something that can allow you to go out into the marketplace and attract people, collect leads, and move them through a nurturing process into your sales process. Which brings me to principle number two, steady opportunity volume. We need a way to take those leads and turn them into prospects. And as we move leads into prospects there and in our pipeline and we have an active pipeline of opportunities that are either in negotiation or maybe we’re following up with them and you have people that you’ve been either sharing proposals with and if you don’t do proposals, because again, that’s another video.We don’t believe in proposals that you’re having sales conversations, you’ve made offers and there’s people that are interested in what you do and you’re actively making offers to those people. We want to have a pipeline of those people. It’s not just the leads we capture that are interested, but these are people we’ve had a conversation with or have reached out to us because they want help with what we do. We need to be focused on building that list of people as well because when our project in fulfillment completes, we don’t need to go manually start hunting and prospecting because our, our marketing machine has brought in leads, so we have steady lead flow and our nurturing system actually helps turn those leads into prospects, which starts to give us oppor opportunity volume. If you finished a project and you could go email your list and say, Hey, we have three spots open and those three spots disappear because three people now paid you to get started on on the project, like that’s going to be really helpful for you to grow your business.It’s just constantly bringing in people that are ready to get started. So number one, we need to have steady lead flow. Number two, we need to have steady opportunity. Volume. Number three, we need to follow up strong. There’s tons of studies out there that show that you know, money is in the followup. You’ve all heard it. Money’s in the list, but the money’s in the followup. Well, a good percentage of the people that come into your world aren’t going to buy in the first 30 60 and possibly even 90 days. But if you stay engaged with them and you talk to prospects and they realize that they need your help, but for whatever reason they can’t get started, but maybe they can get started in 60 or 90 days and you have a system to constantly follow up with those people and check in and check the pulse on, on where they’re at in their business and their needs.You’re going to be kind of resurrecting, so to speak, opportunities that you harvested and collected months at some point maybe even years ago that are just ready to buy now. So there’s tons of opportunity in your followup if you actually have a system and an engine to stay in contact with the people that are coming into your world that are a good fit but maybe not necessarily necessarily ready to buy right now. Now principle number four is to expand your revenue streams. Now, depending upon what you sell, if you follow what we preach, um, and uh, I’ll link a video up in the uh, notes up here where we talk about how to kind of package up your services like a product after you sell that, whether you deliver it as coaching or consulting or you know, a done for you service after you complete that, you can offer your clients something else.And this is where retention, resell and upsell comes in. They always say that it’s far easier to, you know, get an existing client to pay you more money than it is to go find a new client from a cost perspective. So what are you going to sell that person once you’ve completed that project? Now, many of you that are agency owners, freelancers, service providers will probably sit here and say to yourself, well, I don’t have another service to sell them, but many of you do have knowledge and expertise that they could find beneficial and you could sell them into a, an advisory or a mentorship or a coaching opportunity. You can sell them into a membership. You can sell workshops and training that maybe enable their internal team to manage and optimize the thing that you did in, in the front end service. So just because they didn’t want to buy another service from you doesn’t mean that you can’t retain them, upsell them and or get them to buy something from you.Again, if you start to expand your revenue streams beyond just service, so you need to start thinking about how can you package your expertise into a two day workshop or a training that helps, uh, you know, their team or maybe their management, or maybe you have a coaching program that can advise them on how to continue to grow in different ways that isn’t necessarily tied to labor. And over time, if you can actually start transitioning most of your revenue to getting paid for your thinking versus your labor, you’re actually going to be starting to position yourself as an expert as well. And guess what? When you get paid top dollar and you don’t have to do the fulfillment and you have a waiting list of of leads and opportunities coming through and assist them to follow up, you’re going to be constantly be generating revenue in ways where you’re not always having to work more hours or hands to keyboard just to keep working with that client.So a quick recap. Number one, we need to expand our create steady lead flow. Number two is we need to create steady opportunity. Volume number three is we need to follow up strong with these prospects that aren’t necessarily ready to buy but might be ready to buy later. And four, we need to expand our revenue streams. So we’re not only getting paid for our labor, but keeping clients in our world and extending the lifetime value of a client relationship by selling, training, workshops, coaching, and other revenue streams that aren’t tied to your labor. So if you found this video helpful, leave a comment below. What’s your biggest takeaway from this video? And again, if you’re not subscribed to this channel, we have rib was really appreciate you subscribing and clicking that notification bell so you don’t miss another video. See in the next one.
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