Struggling to increase your agency’s revenue? Try these 3 tips

Running a creative agency often means balancing the work you have to do with the work you want to do. Not every project will be groundbreaking or glamorous, but the goal is to earn enough freedom to take on projects that truly excite you. 

Unfortunately, if your agency is in a shaky financial position, you don’t have that luxury. Instead, you’re stuck saying yes to every opportunity—whether it aligns with your vision or not.

To break this cycle and do what you love, your agency needs to generate enough revenue to be profitable. This’ll allow you to focus on innovative projects that energize your team and fulfills you creatively. 

Let’s explore three practical ways your agency can make more money without necessarily doing more work.

1. Increase your bill rates

Raising your rates is one of the fastest ways to make more money. Obvious, we know. Yet, many agency owners hesitate to do it either because they already hear “no” at their current price point and fear they’re charging too much.

Understand that hearing “no” is actually a good thing in business. You should be worried if everyone is agreeing to your rates. It means you’re underpricing your services. It’s normal for the majority of leads not to convert—you only need a fraction of them to close anyway. 

In 2023, the B2B lead generation agency Belkins calculated their highest appointment-to-close rate across all channels at 9.71% in a month. Whereas their lowest was 3%. While these numbers are different for every agency, it shows that successful agencies only convert a fraction of their leads. Because with these “modest” rates, Belkins still saw a 25% growth that same year. So, instead of worrying your pricing will scare prospects, work on how to prove the value, and the right prospects who understand that value will pay. This will allow you to do more profitable projects for the same (or even less) work. 

Also, when you dig into your numbers—specifically your profit margin rather than just your gross margin—you’ll often find that your rates are barely covering your business expenses. For instance, you might see a healthy gross margin of 50% on a project and think you’re doing well. But after factoring in overhead costs like salaries, rent, software, and taxes, your actual profit margin could be less than 10%. And in our experience, your goal should be a 20% profit margin per project or higher. To reach this margin and sustain your agency, increase your rates at intervals.

2. Hire the more expensive contractor

It seems counterintuitive to think hiring more expensive contractors will bring in more revenue. But that’s what often happens. Case in point, Atlas Creative’s (not their real name) experience. 

This agency hired two design contractors for client projects: Contractor A with a $75/hour rate and contractor B with a $100/hour rate. You might be tempted to think that the contractor with the lower rate was a better deal and could help the agency make more profit from the project. Yet that wasn’t the reality. In one month, contractor A completed her work in 40 hours earning $3k for which Atlas Creative charged $5k. And in the same month, the higher-rate contractor B needed only 19 hours to finish her task, bringing her earnings to $1900 for a $7,000 project.

Based on this example, the agency actually made more profit from contractor B even though she was more expensive. Why? She was producing work of substantially higher quality that required little to no revisions. Whereas the lower-rate contractor frequently submitted incomplete work that required extensive revisions, adding to the hours—and costs—for Atlas Creative.

The lesson here is that cheap isn’t always better. While hiring lower-cost contractors might seem like a smart financial move, it can end up costing you more in time, rework, and even client trust. On the other hand, higher-cost contractors who are good at what they do often deliver better results in fewer hours, providing better value and helping you make more from the project.

While hiring lower-cost contractors might seem like a smart financial move, it can end up costing you more in time, rework, and even client trust.

Of course, expensive doesn’t automatically mean better. But it’s sometimes a good indicator of quality. To confirm whether the pricier contractor is costing you or making you money, review your numbers and performance metrics. You’ll see how much value they’re delivering for their rate and if it’s worth it. 

If you need someone to manage your books, try Pilot.  We have software that integrates with QuickBooks and lets you see all your financial reports like P&L statements at a glance, making it easier to analyze your numbers. 

3. Start charging for something you do for free

Look at your processes. What’s one task you consistently do for clients that isn’t part of the agreed scope of work but adds significant value? It could be something adjacent to your main deliverables, like persona development, style guides, or project planning spreadsheets.

These tasks might feel “small” to you because they’re a natural part of your workflow or necessary to complete the project. However, for your clients, they can be invaluable—saving them time, helping them use your deliverables better, or addressing gaps they didn’t even know existed.

The solution? Package these extra tasks as standalone deliverables, present them as optional services, and charge accordingly to generate additional income. Take Atlas Creative, for example. They used to sell article packages to clients and routinely spent up to 10 hours researching each client to ensure the articles aligned with the client’s goals and target audience. Initially, they did this research for free. It wasn’t until someone urged them to charge for it, that they realized they were offering free strategy work. They began packaging the research into a polished strategy deck (renamed to insight report), which clients were eager to pay for and which helped them make data-driven decisions.

If you’re already providing a service like this for free to your existing customers and it’s ongoing, you might wonder how to start charging for it without creating friction. One effective approach is to “grandfather” existing clients, i.e. continue offering the service at no cost to them while charging new clients. That way, you still maintain a good relationship with current customers, and since new ones don’t have previous context, they can’t compare and are likely to agree to pay.

The simplest changes often make the biggest difference

The strategies we’ve shared may seem simple, and that’s by design. You don’t always need elaborate or complex tactics to grow your revenue. Often, small, practical changes can make a big difference. We got these tips doing the books for real agencies who implemented them and grew as a result.

Why not give them a try? Start small and test what works for your agency. We’d love to hear about your experiences and the success you achieve. Tell us at info@pilot.com.