Though there are many chances of establishing a web agency nowadays, everyone would have managed to do it if it were easy.
Growing to a very fast developing industry after the commercialization of the web, this segment is yet in its way to establishing methods and strategies of achieving success.
If you have established a web agency and are on your unique way of achieving your objectives, you should have already got acquainted with one of the biggest questions in this field:
How to be able to increase your revenue, cutting the costs of your agency at the same time?
Although there is no certain answer to this question, the experts of this field state the following: you’ll need to generate recurring revenue and reduce management costs.
Let’s discuss how to generate recurring revenue, then we’ll speak about reducing management costs.
How Web & Software Development Companies Can Generate Recurring Revenue?
1. Quality vs Quantity
With time, your company grows bigger and your marketing team manages to sign more successful contracts.
This is really a good point.
However, if your team is not big enough for giving a good quality within the established time frames, you’ll disappoint both your employees and customers.
This means that it’s time for defining the target audience that will be able to pay for a qualified service, and not to try please everybody.
2. Charge More
Your stuff works really hard, you have put enough efforts.
However, you are not able to earn money for your business to grow: it’s time to charge more for your services.
When companies make their first steps in the field, they often need to offer lower prices than exist in the market.
However, if you have made a good reputation, you have found your customers and have already helped them in having success in their businesses, you can afford yourself to charge more.
3. Premium Services
So far, you haven’t charged for some services like CUSTOMER SUPPORT, WEBINARS, TUTORIALS, and others, have you?
Of course, these are the “invitation tickets” of your customers to your website and it will be a great mistake to turn them into “entrance tickets”.
However, nothing prohibits you from developing some premium services as well.
For example, you have some free webinars on your website. But besides that, you can leave a place on this page asking the customer regarding which topic he/she would like to learn more.
You can ask for his/her email address, mentioning in the same page the price of the service. Inserting this information, the customer leaves his card data and as soon as the webinar appears on his/her email address, you charge the money.
4. Subscription Fees
Today, there are many web companies offering a subscription fee, this way adding one more layer to their product. The customers having a subscription fee can have access to more services than those who don’t have this.
For example, you can have an “X” amount of FREE webinars, tutorials, and services in your website that touch different topics and an additional “Y” amount of them that can only be obtained by those having subscription.
5. Enterprise Services
Supposedly, your company has developed some products and services that meet the needs of a specific audience.
However, there would be large enterprises seeking this or that service that’s not available in the market or they would love to use a service offered by you with slight changes.
You can establish an enterprise plan in the scopes of which your developers would program special services corresponding to the needs of your big customers, charging a good amount of money.
6. Software Products
Developing unique software products is a very big plus. If you have already managed to successfully cope with the above-mentioned criteria, it’s time for innovating and changing the world.
Do your staff members have interesting ideas? Are you ready for new challenges? Is your recurring revenue enough for putting your efforts on bigger projects?
Congratulations!
You have overcome the basic challenges of the field, now it’s time for making your own product, presenting it to the world, dictating the way of the market’s development.
7. Discount System
Having a flexible system of continuous discounts is very helpful for increasing your recurring revenue.
There are a number of strategies for using discounts without hurting sales: holiday discounts, special offers with limited time, discounts for loyal customers, pre-release sales for new products, etc.
8. Invest in Marketing
You could be doing great in developing your services however these are not sold as efficiently as you want to. One of the reasons why many agencies experience this problem is in lack of recognition.
Develop a good marketing strategy and successfully implement it. Make sure, there are many individuals and enterprises who have learned about your brand and rely on you to help them.
Also, make sure, your services have the demanding quality and meet the expectations of your customers which is reflected in reviews, comments, customer stories. Make more and more people know about you, get interested in you, eager to buy your services.
Creating a recurring revenue for your company is only one side of the coin. In order to succeed in your business, you also need to cut costs.
Usually, cost optimization takes place in the scopes of management and administration. Let us highlight some points that are useful for solving this problem.
Related Article: 5 Secret Weapons to Beat Your Competitors
How to Optimize Management & Administrative Costs?
1. Subscriptions & Training
While your business is growing, there are more and more challenges you need to overcome. This requires a constant investment in acquiring knowledge in relevant fields.
In this regard, you’ll need to employ more people in order to be able to keep up with the challenges of the time.
In order to avoid too many subscriptions and memberships, you can employ real professionals of the field.
Subscriptions can give you an overall understanding of the field you have decided to enter, but they don’t guarantee success, whereas a professional employee will take on responsibility and reduce the probability of failing.
Meanwhile, it’s important to keep in mind that each mistake can cost you money, authority, demotivate your staff and slow down your progress.
2. Cloud Computing Application
If you are a small business or a startup, switching to cloud computing will be a great help in reducing your company’s costs.
Nowadays cloud computing remains irreplaceable for cutting up-front IT infrastructure costs, competing with desktop applications.
Cloud computing can help you get packages of different services for reasonable prices, save money on acquiring servers.
They also don’t give additional payments for upgrades and their installations as well as running backups, save on buying software and many more.
3. Culture & Value
Do you waste a lot of paper? Leaving the light on when leaving the office? Organizing your team buildings and working meetings at luxury restaurants? Do you travel on an expensive vehicle? Are you travelling a lot to meet customers?
It should be always kept in mind that the actions taken by the owner find the way to the company’s culture and values. You can stop using paper at all, filling all the data in electronic files.
Also, you can organize team buildings in nature instead of luxury restaurants, establish a fiscal discipline, having calls instead of traveling.
Your employees, too, will start turning the light off when going out, stop using paper, stop asking for a higher salary to be able to buy a luxury car like you.
4. Say NO to “Burnout”
Have you and your employees consumed all the energy?
This will surely affect your productivity and put you back to a large extent.
Usually, burnout is a big reason for many valuable employees to leave the company. This will make you lose a vаst amount of money as you won’t be able to generate the income corresponding to your company’s potential.
In order to avoid such situations, you’ll need to organize your stuff the way that each department will be able to handle its tasks, not to work overtime and give the desired result.
In other words, you’ll need to establish certain working strategies and follow them strictly. On your way, try to manage the time and the working process the most efficient way possible.
5. Clients – Ambassadors
If you already have a marketing team, as well as customer care specialists, you definitely follow certain content strategies. “Educate” your customers creating tighter links between them and your company.
This kind of customers will not only start buying more but also “advertise” your company by tweets, Facebook and LinkedIn posts, etc. This way you’ll be able to save on advertising not hurting your brand recognition.
Remember – each company is unique not only with the products it makes but also with its culture, values, employees and the strategies it adopts.
Moreover, every company is a small system with all the components composing it.
Please, keep in mind that many points are general for web agencies including various web development and software development companies.
Each of these companies has its particularities and seeks its way of solving problems, each of them has an extraordinary story of success.
James is the Founder & CEO of GurusWay.com. Majoring in Business and other life-changing sectors, James covers helpful content and shares his experience with the targeted audience.