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As a creative agency in a competitive landscape, finding ways to diversify your revenue stream is crucial. Innovative thinking about where your revenue is coming from will help your value proposition stand out from competition, and protect your agency from having to depend on a single type of service or weather unexpected downturns.
If you’re concerned about a one-dimensional service offering, or you’re simply looking to develop a long-term growth plan, this guide is for you. In this blog, we will look at why creating new income streams is important, and go over some of the best ways to diversify your revenue streams as a creative agency.
Why Create a New Revenue Stream for Your Agency?
Diversifying your creative agency’s revenue stream will help make your entire business model more resilient and adaptable, giving you the flexibility to grow while mitigating the risk of stagnation.
Some key reasons to consider diversifying revenue streams include the following listed below.
Reducing Risk
When you successfully create a new revenue stream, you’ll reduce your dependence on a single source of revenue and better equip your agency to deal with unexpected volatility and downturns. If one of your income sources is underperforming, having an additional revenue stream will compensate and help keep your bottom line stable.
Adaptability and Resilience
In addition to reducing the risk of sudden downturns, additional sources of agency revenue will empower new offerings as you adapt to new niches. For example, if you’ve noticed an uptick in audience engagement with content about digital products on social media, you can enhance your offerings to support this demand.
Room for Growth
Exploring new income streams can be an effective way to align your agency with new audience segments and exploit new avenues for lead generation and growth that may not be accessible through your current value proposition.
Key Considerations When Creating a New Revenue Stream
There are various products and services you can leverage to diversify revenue streams as a creative agency. Before you commit to one course of action for unlocking new income streams, you’ll need to consider these important variables to decide whether or not it’s accessible and profitable for your agency.
Here are some key questions to ask yourself when you’re reviewing a new revenue stream and assessing its suitability for your creative agency:
- What kind of needs do our current clients have that are under-served by our current value proposition?
- What marketing trends are relevant to our agency’s unique expertise, and present an opportunity for us to meet these needs with a new service offering?
- Will we need to define a new audience segment to sell our new product or service effectively?
- Do we have the internal resources and expertise to provide a new service that’s up to competitive standards?
- What is the cost of developing, launching, and marketing our new offering?
By considering these variables and using your findings to inform next steps, you’ll be able to plan and implement a new revenue stream that plays to your strengths and aligns neatly with the demands of the market.
3 Ways to Create a New Revenue Stream for Your Creative Agency
As an agency, there are endless ways to develop a value proposition that makes effective use of your resources and expertise, while aligning with the demands of your market.
That said, certain popular revenue streams provide a more natural fit for the agency's business model. Here are three potential ways to create a new revenue stream for your creative agency:
Offer Training Courses
For many creative agency clients, outsourcing their marketing campaigns to an agency is a stepping stone toward the ultimate goal of handling marketing in-house. Being a trusted source of expertise for your clients can put you in a strong position to upsell a training course.
Furthermore, valuable training courses can also bring stronger lead generation, allowing you to turn businesses looking for training into consistent agency clients.
Platforms like Teachable provide an intuitive interface for organizing training materials into a complete course, and then selling this course to your clients. Alternatively, you might want to develop a bespoke training program for your clients, based on their business’s unique needs and aims.
In either model, creating courses allows you to take a client-centric approach, customizing your modules based on the needs of businesses that tend to work with your agency. This yields a higher-quality product compared to more generic courses available elsewhere.
Whatever your approach looks like, offering training courses can be a great way to generate extra revenue while reinforcing your status as an industry leader and encouraging word-of-mouth marketing.
Form Tech Provider Partnerships
Partnering with tech companies to sell their products and services can create new revenue streams through complementary value offerings for your agency.
For example, if you offer web design services, you may want to partner with a hosting provider like 20i.com that provides white label reseller hosting. With full control over pricing and profit margins, you can tailor hosting packages to your client's needs while adding a scalable revenue source to your agency.
Many tech provider partnerships offer the unique benefit of generating revenue through pertinent technological products, while your partner focuses on providing and maintaining these products using their resources. This means you’ll be able to strategize and launch a profitable new revenue stream without having to plan for long-term maintenance or worry about eating into your internal resources.
Create and Sell Digital Products
Creating unique digital products that appeal to your target audience is another effective way to generate alternate revenue streams for your creative agency. Selling quality digital products combines the benefits of offering training courses and partnering with tech providers.
First, it allows you to customize a value proposition that’s tailored to your unique audience base, positioning your account managers for a strong upsell. Second, creating a quality digital product opens up a stream of passive income, meaning you won’t have to find the capacity for ongoing maintenance.
There are various digital products that are often a good fit for creative agencies. Some ideas you might want to consider include:
- Ebooks, ultimate guides, and white papers that offer exclusive, valuable insights or showcase your own original market research.
- Subscription or membership-based areas of your website that offer exclusive content and insights.
- Software and tools that help clients automate their social media scheduling, email campaigns, and other common marketing tasks.
- Creative assets, such as bundles of stock photos, typography packs, and illustrations.
A desirable digital product requires time and resources to establish, but once you’ve built and promoted your product, it can provide a fantastic source of passive income that often requires very little long-term maintenance.
Building a Better Future for Your Business
We hope this guide has helped you create a clearer roadmap toward diversifying your revenue sources. Though developing new income streams can be challenging, the potential for increased revenue, flexibility, and risk mitigation offer huge benefits for agencies looking to grow and future-proof their business.