The White Label Economy No Agency Wants You To Know!
As I wrote in my earlier post, it’s extremely hard to scale a digital agency. Smart entrepreneurs usually pivot their agency to SaaS or digital products. This is the main reason why we chose to empower startup digital agencies. We have seen agencies grew tremendously with our white label programs.
You may read the whole story here:
Have you ever wondered how some startup agencies are able to grow so quickly and break 1M+ in revenue, yet still keeps very low expenses and did not even hire expensive talents?
Let’s do a simple math here. Say you scale from 5 clients to 10 clients in a month, doubling your sales...
That may mean a 100% increase in sales, but in order to deliver results, you need to hire new talents. Basically, you need to hire:
1 x Graphic designer
2 x Facebook Ads Specialists
1 x Account manager
You have to add four headcounts in-house.
Depending on the city where you’re business operates, an average salary of Facebook Ads specialist is about USD 1,500 and can easily shoot up to USD 2,500 if they are very experienced. With graphic designer and account manager, that is already about USD7,000 additional expense.
What about purchase of new laptops and furniture/office rentals?
After adding up everything, that’s close to whopping $10K additional expenses.
And then you still need to provide training on actual campaign optimization to improve their learning curve. Most specialists would need at least 3 months to be able to deliver world-class performance if they are really good.
But as an agency business owner, you are probably aware that the client churn rate is really high. To some extent, it’s 60% churn rate and average clients stays with you for about 6 months to 1 year. Some will just drop the campaign despite getting a good return of ad spent. Why is this happening? Well, that’s because clients are crazy. It's happening because the digital agency is the worst business model to scale.
This is also the main reason smart entrepreneurs don’t start an agency business unless they already figured a way around it. And this is why White label services are extremely important to scale your agency - the moment the client dropped the campaigns, you literally stop the contract with white labels.
So instead of the bearing cash flow burdens when clients dropped, white label agencies give you the flexibility to start or pause the campaigns without really stressing the heck out of your cash flow.
Talk to us today to learn more about how White label can be the catalyst to your agency growth!