The Definitive Guide to Outsourcing Work to Increase Profitability at Agencies
Looking to scale your agency without having to hire a bunch of new employees?
Perhaps you go back and forth between landing new business and not having enough talent to deliver, and at other times, business slows down, and you don’t have enough work for your full-time employees.
These scenarios are so common for agencies that more are outsourcing some of their work than ever before.
With a lower overhead cost and an influx of expertise in certain areas that enhance your agency, keep reading to learn everything you need to know to make an informed decision on outsourcing some of the work at your agency.
4 Signs Your Agency Needs to Outsource Work
When deciding to outsource work, ask yourself these four key questions.
1. Are there gaps in your current team's capabilities?
As your business expands, it often becomes clear where your team might be lacking. For instance, you might be satisfied with the progress of your website development but find yourself in need of a skilled copywriter to enhance the content. Alternatively, if you're struggling to generate leads, hiring a sales consultant might be a viable solution. You could also be facing an overload of tasks due to a growing workflow and insufficient staff to manage it all. If you’re evaluating your priorities and identifying areas where your team could benefit from additional support, it may be time to consider outsourcing.
2. Is your budget stretched too thin?
After covering all your expenses, are your profits minimal? Many agencies showcase impressive revenue figures without disclosing their actual profits, highlighting the challenge of maintaining healthy profit margins while delivering quality services. Analyzing your financial data thoroughly is essential for business growth and profitability. If you're unable to dedicate time to this crucial task, it might hinder your progress. As an agency owner, focusing on profitability and having accurate data for decision-making is crucial. If your budget barely meets your needs, exploring outsourcing options could be beneficial.
3. Are routine tasks consuming too much of your time?
Do you find yourself starting each week with ambitious goals for improving workflows, increasing business, and driving growth, only to realize by the end of the week that none of these goals have been achieved? This often happens during periods of growth when unexpected issues arise, putting additional strain on your business structure and resources. If your time is primarily spent managing routine tasks and resolving urgent issues, rather than focusing on strategic improvements, outsourcing might be a solution to help alleviate some of this burden.
4. Is your team overwhelmed with their workload?
Even if you have a dedicated team, growth can be challenging when everyone is stretched thin. Your team members might be maxed out, making it difficult to handle additional work or implement new processes. While improving efficiency and streamlining workflows can help, finding the time to develop these processes can be tough when your staff is busy meeting client needs. If your team is struggling to manage their current workload and you need to scale, it’s worth reconsidering your approach to team growth and exploring how outsourcing can provide the necessary support.
Benefits of Outsourcing
When deciding if outsourcing work at your agency will enhance workflow and increase profitability, keep these benefits in mind.
Maintain Your Focus on Client Work
When you outsource some of your client work or hire someone to focus on growth at your agency, you can maintain focus on delivering awesome client work. It’s so common for agencies to spend a lot of time pleasing their clients that growing and optimizing their own agencies gets pushed aside.
Reduced Risk
One of the biggest knocks on the traditional agency business model is its reliance on headcount. Each account manager or team specialist can only handle so many clients. At some point, you need to hire more people. But as soon as you hire new people, you all of a sudden have too much capacity for your client list. It’s impossible to have the perfect staff-to-client ratio for any amount of time. By outsourcing tasks to third parties you reduce the risk because you can assign them more or less work depending on the needs of your clients - they’re not on the full-time payroll.
Cost Efficiency
One consequence of the agency model that relies heavily on a large workforce is the need for additional office space, higher wages, and various other costs linked to managing a big team. In contrast, specialized external partners typically manage their own office space and business expenses. Although their hourly rates might be higher compared to hiring a junior staff member, you only pay for the specific hours required to achieve client results. Additionally, the actual expense of bringing a new employee on board is estimated to exceed $4,000, which covers just the initial setup and training.
Access to Expertise
Typically, agencies bring in new hires at the junior level, opting for individuals with limited experience who can be trained and developed to meet client needs at a lower cost. Collaborating with expert third-party providers can save on the costs and time associated with training inexperienced employees while providing access to seasoned professionals. Although onboarding new contractors to align with your processes and expectations is necessary, this approach is generally more efficient than training new hires to deliver client outcomes. Essentially, leveraging experienced external partners can lead to better results with less training effort and increase the likelihood of finding the right team members.
Ability to Scale
The outsourcing model provides flexibility to adjust resources based on your current needs. For instance, if a client is lost, you can reduce the hours billed by the contractor handling that account. Conversely, acquiring a new client allows you to allocate additional hours to accommodate the new workload. This method is significantly more efficient than the lengthy process of recruiting talent, interviewing candidates, hiring, and training them, which can take several months—time that might be unavailable when a new client opportunity arises. It’s no wonder that many marketing agencies cite training new employees as a major challenge.
Dedication to Your Agency
It might seem unusual to think that an external partner could be more committed to client success than an internal employee. However, it’s important to recognize that freelancers, contractors, and white-label service providers operate their own businesses. Their mindset often differs from that of employees seeking a stable paycheck. The relationship can be advantageous for both parties: if your agency thrives, it benefits their business as well.
Common Areas Agencies Outsource Work
Agencies have a lot of areas to strategically outsource work. Whether it’s to add new services to your clients or achieve agency growth, there are some key areas that agencies are outsourcing.
The majority of agencies outsource talent to compliment the expertise they already have.
Copywriting
With marketing being so content-driven, a lot of agencies are outsourcing content creators. This can be writers for assets like blog posts, guides, eBooks, etc. But outsourcing copywriting can also get your agency and/or clients featured in high-profile publications if your copywriter has the right connections. The right copywriter should be well versed in the agency world so they can write copy for your business as well as the industries you have expertise in so that they can write copy for your clients.
Agency Growth
Agency growth is the most popular area that agencies are outsourcing talent. With spending so much time on client work, agency owners often hire growth partners.
An effective marketing strategy should address every phase of the buyer's journey, from lead generation to email workflows. Key components of this foundational work involve creating detailed buyer personas, aligning campaigns with specific needs, and staying updated with emerging market trends. By hiring a growth partner, you gain access to their expertise in the latest industry developments and innovative marketing techniques. They can also help uncover target audience segments that you might not have previously considered. However, if full outsourcing isn't within your budget, another approach is to develop a 'strategy framework' that your internal team can enhance. For example, a specialist might create the initial buyer personas, while your team can build upon this framework to complete the strategic plan.
Data and Reporting
The effectiveness of your marketing strategies largely depends on how adeptly you utilize data analytics. Not to mention, your clients expect detailed reporting on your efforts to grow their businesses. Many companies struggle to extract valuable insights from their data due to a lack of in-house expertise. Building and training a team of data scientists and engineers can be both costly and time-consuming. Instead, specialized agencies offer the necessary skills to analyze your data and provide actionable insights based on your current analytics. These agencies also present various solutions that can be tailored to fit your budget and needs. By leveraging the expertise of a marketing intelligence agency, you can avoid overextending your resources and focus on creating excellent products and services, while benefiting from the strategic insights they provide.
Email Marketing
Email marketing has an ROI of $36 for every $1 spent. That is, if you do it right. Concerned about overwhelming potential customers with too many emails or having your messages overlooked? An effective email marketing approach can leverage automation and personalization to your advantage. For example, automated workflows can send targeted emails in response to specific user actions, like engaging with a social media ad or watching a video. By delegating the design and implementation of these workflows to experts, you can reduce the manual effort involved and rely on professionals to manage this aspect of your marketing.
Social Media Marketing
If you're with a smaller company and working within a tight budget, hiring a full-time social media manager might be impractical. However, social media's potential impact on your brand's reach and visibility makes it crucial to consider outsourcing. Partnering with an agency that has a strong track record in the industry could elevate your brand's presence significantly. Instead of transferring your entire social media strategy, you might choose to outsource specific tasks. For example, if you find Instagram to be a key platform for engaging with leads, but your current social media manager is spread thin across Twitter, LinkedIn, and Facebook, you could hire an agency to specialize in Instagram. This agency could handle everything from Instagram advertising and posting to Stories, to managing influencer partnerships for your brand.
Ability to Offer Better Customer Service
A well-trained customer support team, led by experienced management, can deliver exceptional service that encourages customer loyalty. Building such a top-tier support staff internally is often impractical due to the significant financial investment and expertise needed. Most businesses find it challenging to assemble and maintain such a team on their own. Outsourcing to a professional service provider ensures that your customers receive attentive and valued support, enhancing their overall experience with your company.
Faster Turn Around Time on Projects
A bottleneck in the creative process can severely impact a campaign's success. Delays in creating creative assets can stall everything from client approvals to campaign launches and performance evaluations. Even the most committed teams with a well-defined brand strategy may struggle to meet KPIs if creative work isn't completed and implemented on schedule.
By outsourcing overflow creative tasks while maintaining control over key creative processes internally, you can keep projects on schedule and meet crucial deadlines. This approach allows for more frequent and consistent content publication and provides ample time to review and refine your strategic approach.
Finding Qualified Talent to Outsource
To help you find the right freelance talent, here are some top websites that can streamline the process:
Upwork
Upwork is a well-known platform for sourcing freelancers from around the world. It excels in simplifying payment procedures and managing projects efficiently. Many agencies frequently use Upwork due to its growing pool of high-quality creative professionals, making it an excellent choice for finding talent for short-term projects quickly.
Freelancer
Freelancer is another major site that offers a broad range of freelance talent. Its verification system helps minimize scams, and its 24/7 customer support ensures that both freelancers and employers have assistance whenever needed. It’s a solid option for posting jobs and hiring freelancers.
Guru
Guru provides a range of features to connect agencies with suitable freelancers. Its skill-matching system helps find the right fit, while the “workroom” feature facilitates smooth communication. Payments are managed securely through SafePay, adding an extra layer of reliability.
PeoplePerHour
PeoplePerHour is a versatile platform that includes features like “Hourlies,” which allow freelancers to offer fixed-price services. This site is particularly useful for one-off projects and finding competitive rates for freelance work.
Fiverr
Fiverr is known for its on-demand services across over 300 categories, such as video production and programming. It’s ideal for one-off or short-term projects, with freelancers offering their services at fixed prices and often delivering quickly.
99Designs
99Designs specializes in graphic design, connecting you with freelancers who focus on logo design, branding, and related areas. It offers competitive pricing and a money-back guarantee if the final product doesn’t meet your expectations.
The Campfire Circle
As an agency that grows and optimizes agencies, The Campfire Circle is equipped to grow your agency to increase profitability and help with the day-to-day tasks that become overwhelming for agencies. With agency owners being so busy with client work, The Campfire Circle is a great option if your agency needs a dedicated growth partner.
Do you outsource work for your agency? If so, in what areas? I would love to read your insights in the comments below!
