Streamlining your processes is always a good thing. And as you look at where your efficiencies are — and more importantly, where they aren’t — you might just discover that time tracking is taking up more effort than it’s worth, especially when it comes to building retainer business.
The more clients that you can retain month after month, the more reliable income you’ll have coming in. Herein lies the issue with the time-tracking model, which often does more harm than good in terms of keeping your clients satisfied and sticking around.
There are various issues with timesheets, including inaccuracies and a lack of focus on real results. If you’re billing your clients hourly, you’re missing out on an opportunity to better prove your agency’s worth through what really matters: performance. That’s a pretty big misstep if you want your clients to be aware of just how much value you’re providing.
Here’s why time-tracking is on its way out — and the better billing models that you should be putting in its place.
Why Agencies Use Time-Tracking
Why did time-tracking become the go-to model in the first place?
While retaining clients has always been a primary goal of agencies, they haven’t always had such a big range of tools with which to illustrate value and performance. This has meant a greater reliance on alternate billing practices that serve to connect the dots in some way between work performed and work delivered, with timesheets being a better-than-nothing way to do so.
Lots of industries bill hourly. But unlike, say, the legal field, marketing clients have good reason to believe that what they’re paying for is a guarantee of positive results. And if they don’t get them with one agency, it makes sense that they’d look for another.
There was a time when the hourly time-tracking model was an agency’s best method of billing. That time has passed, though, and the new model is value-driven and focused on goal measurements instead of minutes. So if you’re still using time-tracking, you’re showing your clients that you’re ready to work on their behalf — but you’re failing to show why that work is truly valuable to them.
Shifting to Better Options
What does an hour of work look like? How do you prove that it was well spent?
Time-tracking fails to convey what your clients received in return for the time logged on the sheet. It’s also often riddled with inaccuracies, particularly if you’re not using software to log every hour, minute, and second that your team members are spending on each task (and if you’ve ever been subject to this type of software yourself, you know just how intrusive and distracting it can be).
Fortunately, there’s a better model: value and performance-based pricing.
Charging your clients based on results instead of time spent offers a number of big benefits, all of which can help you retain their business and boost revenue that will keep your agency running smoothly.
It’s Both Qualitative and Quantitative
Unlike hourly billing, value and performance-based pricing show clients the quality they’re getting out of your services — instead of just the sheer amount of your time they’re paying for.
It’s Better for Your Books
Project to project and quarter to quarter, you likely don’t know exactly how many hours you’re going to spend on a client’s behalf. What you do know, however, is what deliverables you’re offering and how those deadlines are going to be spread out.
It’s Better for Your Client Relationships
Great agency-client relationships are built on trust and transparency, both of which can get lost in the time-tracking model. Billing on completed projects and results gives much more insight into what your clients are getting in return for their investment, which helps turn a contract into a partnership.
How Marketing Automation Can Help
Today’s agencies have more tools available than ever to help them make the switch to value and performance-based pricing, and that includes marketing automation.
Marketing automation serves to take the guesswork out of proving value, which leads to more retainer business. Some of what it can help you do include:
- Tracking the number of new leads or contacts being captured
- Building and monitoring campaigns for those tracked contacts
- Creating an ongoing funnel for customers
- Measuring workflows, deadlines, and other pipeline deliverables
- Tracking customer recommendations and referrals
- Collecting and reporting data on campaign performance
Because marketing automation is an ongoing strategy, it also allows your clients to see how your work has evolved for them over time, both in terms of projects and in terms of results.
The goal of a marketing agency isn’t just to tick off-hours on a timesheet — it’s to help clients reach more customers and reach those customers more effectively. Use marketing automation to prove to your clients that that’s exactly what you’re doing, and they won’t just be happier, they’ll also be more likely to retain your services.