Transitioning to a Transparent Pricing Model and Combating RFP Challenges

Are you struggling to scale your digital agency to 7-figures and beyond? Do you think 8-figure or 9-figure agency owners must have it all figured out? Today’s guest shares the journey of taking his smaller agency to an eight-figure business and discusses the strategies that helped him scale and grow. He talks about the huge impact their transparent pricing model had on their growth, why he’s still figuring out a marketing strategy that will not depend on referrals, and how he’s changed his mind about the remote model. Tune in to hear more about Graham's experiences and insights as an agency owner.

Graeme Barlow is a tech entrepreneur who has built and sold several startups in the space and is currently the owner of Iversoft, an agency that builds custom software for brands all over the world. The agency specializes in mobile but dabbles in backend web development and works with creative agencies to complement their engineering expertise.

In this episode, we’ll discuss:

• Moving from the tech space to owning an agency.
• The pricing model that led to immense 8-figure agency growth.
• Marketing strategies to attract big brand clients.

 

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Sponsors and Resources

E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design, and development agency that has provided white-label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.

 

Moving from Tech to Being in the Agency World

Many agency owners think grass is greener on the tech side of business and dream of building the new Facebook. For his part, Graeme made the journey backwards and ended up being an agency owner after years in tech. He has built products and games and seen the real struggles in tech and the opportunities as a service provider to partner with up-and-coming starters to develop cool tools. For him, it was the best of both worlds.

As an agency owner, Graeme could get access to the coolest technology around while also working with tech startups as they start to scale. However, he found it’s not easy working with unknown and unpredictable technologies.

Looking back at their impressive growth over the years, Graeme admits it took a lot of pain and suffering. When they started, it was all small fixed bid projects they could complete in a week. Nothing seemed too complicated working on mobile at a time when mobile apps still weren’t as complex as they are today. Fast forward to the present and they are now handling multiple six-figure projects at a time.

That level of growth is what most agency owners dream of but maintaining it takes solid processes, a good team, a good marketing strategy, and a lot of resilience.

A Pricing Model that Led to Immense Growth

Transitioning out of the fixed bid to a retainer model proved to be much more difficult than he thought, though a necessary step to scale.

In software, there’s much you’ll learn about user interaction when people start using it. It is extremely hard to define every possible element of software build up front, which is why the fixed bid model was just not working for them. What could they change? How could they make it happen?

Basically, they looked at their most successful accounts past the build stage; these accounts were in the maintenance stage and they were working on product enhancement and doing live support in DevOps. Those were their happiest clients. Why was that? All the priorities were aligned.

Now Graeme provides a cost breakdown: team retainer, overheads, and a 20% markup on team fees. Clients dictate resource levels based on priorities. Want aggressive? Add senior members. Conserve costs? Go junior heavy. It’s their call. This basically eliminated the need for price negotiation with clients.

It’s been much easier to sell and maintain and they almost eliminated price negotiation with clients, making the process smoother and more efficient.

RFPs: Graeme admits, however, that RFP traditions still clash with the retainer approach. If this is your case as well, offer skeptical prospects a paid half-day workshop exploring fit before any scope is defined. The investment filters the serious from the merely curious.

Leveraging Success Stories to Go Beyond Word-of-Mouth

The marketing component is something Graeme admits he and his team are still figuring out. The bulk of their growth has so far come from word-of-mouth from existing clients. Other than that, they’re still trying to crack the marketing piece.

Luckily, attracting elite talent gave Graeme an edge when pitching clients; as they can offer better talent than clients could recruit and retain on their own.

However, you’ll need more than word of mouth to maintain growth. You need to be intentional about your strategy. For instance, one mastermind member built a referral system tracking reciprocity. If they didn’t send referrals, it was time to look for another referral partner.

Another useful strategy for agency owners looking for new business outside of referrals is ads spotlighting client success stories – putting results in front of ideal prospects – and reaching out directly as a customer. Let them know you bought their product and have a few suggestions on how to improve their marketing. You’ll be sure to get their attention

Finally, Graeme has seen a lot of success pursuing partnerships stacking expertise across design, marketing and UX. Complete solutions require combining strengths and the most successful agencies are the ones constantly adapting their strategies to improve their results.

Unlocking Efficiency and Accessing Global Talent Through Remote Work

Up to a few years ago, Graeme was convinced that complex software development had to be solved by people in the same room. In the last three years, however, his agency transitioned from a traditional office setup to a fully remote organization. This transition has resulted in numerous positive outcomes for the agency, including increased efficiency, speed, delivery, and employee retention.

This is a mindset change he encourages for any agency owner thinking about going remote. By embracing remote work, agencies can attract talent from anywhere in the world. This opens up opportunities to work with highly skilled professionals you otherwise would’ve never considered.

Furthermore, remote work offers a flexible work environment that promotes trust and autonomy. As long as you find the right balance and ensure effective communication and collaboration among team members, a shift to remote can foster a sense of ownership and responsibility among employees, leading to increased engagement and accountability.

Do You Want to Transform Your Agency from a Liability to an Asset?

If you want to be around amazing agency owners who can see what you may not be able to see and help you grow your agency, go to Agency Mastery 360.  Our agency growth program helps you take a 360-degree view of your agency and gain mastery of the 3 pillar systems (attract, convert, scale) so you can create predictability, wealth, and freedom.