Marketing can be a highly lucrative field. Whether you’re working on your own for a marketing company, working in a large marketing firm, or starting one up yourself, you’ll be looking to help your business generate the highest possible profits.
In this guide, then, we’ll look at what you can do, especially as a firm leader, to generate higher profits, cut costs, and end up with more to reinvest or pay your staff in the future. Here are some tips to help your firm reach the next level in 2023.
Cutting Simple Costs
Marketing firms often forget that there are simple costs that they can save, many of which are experienced by many businesses across the world of industry and professional services.
For instance, firms should always be shopping for the best rates on office rentals and utility bills. They should negotiate continually to keep the rates for internet access and their hardware provisions down. They should look at savings schemes online to reduce costs.
If you’re operating one or more vehicles, you must be searching for cost-effective insurance deals for your fleet. Make sure the fuel you’re filling your vehicles up with is as cheap as possible, using a BP fuel card for discounts at the pumps.
Overall, you’re looking to make all of these incidental costs as low as possible, reducing overheads and, therefore, translating that wasted cash into profits for your business.
You generate profits through the rates that you charge. The higher the rates, in general, the more you’ll be taking home as gross profits at the end of your project.
The only downside to raising your rates, and one you should certainly be aware of, is that you might become so expensive as to drive clients to your competitors.
What you can get away with, though, you should always consider adding to your bills. You’re a business offering a unique service, so you can certainly charge higher if you’re offering a brilliant service.
Make sure you’re consulting the market first, and check if your competitors are offering discount prices that are far more competitive than your own before you do decide to up your prices. It’s also worth quoting your clients on a case-by-case basis, depending on their budgets.
One way to make your firm stand out a little more, gaining yourself a reputation for excellence that will justify your higher rates, is to hire experts who can make a difference for your clients.
Ideally, you’ll continue to develop your team into one of the most talented marketing firms in the world, which will generate a huge amount of business for your people and a great amount of cash in fees.
All this is a self-reinforcing process, seeing as the better your quality of work, the more you’ll be able to charge and pay your staff, which will further attract the best marketers and clients to your firm, continuing a spiral of more profitable activity that will set you apart from the pack and give you a professional, boutique reputation for reliability and excellence.
This is an option that all firms should look to pursue by hiring the very best in the industry.
If you’re performing the full spectrum of marketing tasks in your firm, you might have worked out internally which are the most profitable tasks that your people work on.
You can do this by adding up all of the costs of running certain campaigns, such as the cost of advertising and the hours your workers are spending on each task, and comparing which tasks are the most profitable.
A task that generates $100 from $50 work is less preferable to pursue than one that generates $250 from the same amount of work.
Over time, you’ll be able to hone the kinds of tasks that your team do to make them even more time efficient. This isn’t to say that you should abandon all the tasks that are considered less profitable in your firm.
Some of them are important tasks for marketing a product or company holistically. Still, you should focus your energies on the most profitable activities, so that you’re billing high figures for your excellent work.
Where possible, all businesses should be looking into the power of automation in the present day. This rapidly advancing field is incredibly exciting, seeing as it promises to make mundane, administrative tasks a thing of the past, saving businesses the cash they spend on workers performing these tasks in the process.
Marketing firms can benefit from automation in two key ways.
The first is by harnessing the technology that’s out there to automate general tasks, such as administration, filing, and financial accounting. The other is to use automation technology that already exists in the marketing space.
Some of these services you will already be using, such as email marketing automation. Others might be less known to you and will be well worth your technology team investigating to bring more cash into your business.
Your firm will rely on your clients to generate profits. You’ll never want to go through a period in which you’re not generating enough work to justify the staff that you have working on projects, and that means that you should always be looking for ways in which you can generate more sales leads.
This should be the focus of your sales teams, who should be relentlessly putting together demonstrations and presentations to firms looking for a marketing partner.
It’s not just the volume of clients you need to keep up, but the quality too. You should be looking for larger clients with deeper pockets, and those that you feel will require your services on an ongoing basis.
It’s these clients that you’ll be able to work with for years to come, charging healthy rates and supporting your growth and expansion, which will in turn generate more profits and investment for your company.
Another aspect of marketing firms that is often overlooked is just how many financial levers you can pull to retain as much of your profits as possible.
Smaller firms should hire an excellent accountant to reduce their tax bill and ensure that the majority of the cash that they’re spending on operations is accounted for when they do generate their annual tax bill.
This is something that larger firms can do in-house, with their financial team crunching the numbers to save on tax.
There are several other financial levers that you can pull to save cash. For instance, many businesses can use bursaries, investment rounds, and other forms of funding to boost their revenue and increase their liquidity.
These funds are set up to support successful businesses, as they invest further in their expansion, leading to more profits for your firm.
We’ve already mentioned cutting your overheads and ensuring that you are automating projects where possible. These two considerations are part of a broader effort for your firm to save cash by streamlining your operations.
This is an ongoing process of spotting where there are snags and delays in your service delivery and ensuring that you iron out these issues over time. For ambitious firms, regular audits of their process can often reveal areas in which they can further streamline their offerings.
Marketing firms should focus on how their workers are operating. There are moments in a worker’s day when they are technically not generating any profit based on the fees that you’re billing your clients.
If you can reduce these sums of money, ensuring that you’re charging for the majority of your workers’ time and attention, you’ll be ensuring that your staff are generating profit as much as possible when they’re at work.
Embracing Remote Work
There are several benefits to remote work. For instance, those firms that decide to make remote work their policy moving forwards will be able to downscale their office space, or get rid of it altogether.
As this is one of your largest and most expensive overheads, the savings that you can generate from this alone can be huge. The same goes for the hardware that you have to supply an office with on an ongoing basis.
Without an office, you can ask your staff to work on personal devices, saving you cash on the provision of these, too.
Over time, remote work can mean that your staff can work more flexibly, which might save you on burnout and sick days, reducing the amount of cash you’re spending on workers who are not generating any profit for your firm.
Meanwhile, flexible working is becoming something that workers search for when they’re looking for jobs. You can attract and retain the very best talent in the industry by showing that you’re a forward-thinking firm that is happy to embrace working conditions that suit each worker.
This exhaustive guide should help you concentrate on profit generation at your firm in 2023. Use all of the tips above to squeeze more out of your workers, reduce overheads, and ensure you’re billing for all the valuable work your people are putting into your projects.