Selling at the lower end too?

[Dillon Lawrence Ltd]

We’re a digital and ecommerce agency. Over time and in line with being specialist we’ve increased prices and project sizes, meaning we’re starting to work with more larger businesses. Full bespoke Shopify builds, web apps or branding for example. We also offer cloud management amongst other services.

It has however resulted in smaller clients being priced out. Not affording us is fine and we can focus on winning the bigger profitable projects but part of me thinks it would be good to build some sort of service that works with smaller businesses at lower price points and corner that market too. If anything it’ll get us out there for when the business does grow.

Less technically intensive projects and being more hands off would allows us to stay profitable and the selling points would mean clients make use of the tech and experience of a larger agency team.

An example would be ecommerce. We can provide a hosted WooCommerce SaaS platform with management, enhancements and features included (better multi step checkout and reporting for example that’s been built in by our experienced ecommerce developers). The client has the option to build their own site similar to Shopify or we’ll price basic sites lower as they’ll be template based.

Why not choose Shopify or a similar WooCommerce host? Because for many features we have smaller businesses request on Shopify they require apps. Fine for our larger customers mentioned above but many aren’t interested once they hear the cost of monthly fee. We can bundle these are they can be developed in house and hosted by us as they aren’t included in Woo out of the box. They’ll also have the backing of our marketing and ecommerce developers to help them.

We’d brand this under a completely different name with some cross over with our main agency to back up the experience and to provide an upgrade path when the business grows.

Overall it should give smaller businesses with lesser needs the ability to access expertise at a lower price point with a route to upgrading when needed.

I’m thinking it should also be an easier sell at £39 per month compared to selling a cash strapped smaller business on a website in the thousands. The full service agency can then focus on pulling in bigger clients with needs which require more than what our basic offering does.

Part of me thinks it would be an excellent way to build a platform that’s based around support and expertise and help an agency corner the small business market. The other part thinks focus on the bigger projects.

Thoughts please

 

[cjd]

This low cost, self-service idea for selling fairly complicated technical products to small business is our business model.

There are lots of benefits from it if you can get it right. The main ones being less competition, a bigger market and no dependency on a few big clients. But there are difficulties to overcome. To be profitable it really does have to be DIY self-assembly with very low human contact from your side. That isn't necessarily easy to accomplish.

But it also needs to be properly supported, don't make the mistake of thinking it can be done without good human, expert customer support; you just have to make it so easy to buy, set-up, add to and maintain that the calls that you do get are few and easy to handle. All that takes effort and cost.

It's also a different sell, small/micro businesses are hard and expensive to market to - in fact we don't do it. Our customers find us by recommendation and good SEO.

Think carefully about brand. My feeling would be to promote the services under the same brand, it gives the new service instant credibility with new customers and you get the google effect on SEO of being established. Split the site into DIY or Full Service with price/benefit comparisons and customers can choose for themselves. Smaller customers can also easily see an upgrade route.

One tip, if you can, don't try to tie tiny customers into contracts - they don't like that because a lot of them will be start-ups and unsure of themselves. If you make it low-price, low commitment but in return charge monthly upfront, you have no bad debts to manage. You'll find that customers stick with you because it does what you say it does, it's reliable and you're there if they have a problem.

Don't think it's easy though!

 

[WaveJumper]

This low cost, self-service idea for selling fairly complicated technical products to small business is our business model.

There are lots of benefits from it if you can get it right. The main ones being less competition, a bigger market and no dependency on a few big clients. But there are difficulties to overcome. To be profitable it really does have to be DIY self-assembly with very low human contact from your side. That isn't necessarily easy to accomplish.

But it also needs to be properly supported, don't make the mistake of thinking it can be done without good human, expert customer support; you just have to make it so easy to buy, set-up, add to and maintain that the calls that you do get are few and easy to handle. All that takes effort and cost.

It's also a different sell, small/micro businesses are hard and expensive to market to - in fact we don't do it. Our customers find us by recommendation and good SEO.

Think carefully about brand. My feeling would be to promote the services under the same brand, it gives the new service instant credibility with new customers and you get the google effect on SEO of being established. Split the site into DIY or Full Service with price/benefit comparisons and customers can choose for themselves. Smaller customers can also easily see an upgrade route.

One tip, if you can, don't try to tie tiny customers into contracts - they don't like that because a lot of them will be start-ups and unsure of themselves. If you make it low-price, low commitment but in return charge monthly upfront, you have no bad debts to manage. You'll find that customers stick with you because it does what you say it does, it's reliable and you're there if they have a problem.

Don't think it's easy though!

Great advice and perhaps a "pay as you go" type approach

 

[fisicx]

Is this a follow on from this thread:

As a digital agency in a crowded market would this be a competitive advantage?

We’re in this somewhat awkward stage where we are moving more upmarket in terms of our client base, meaning naturally that our prices are rising. By upmarket I mean we’re attracting larger businesses whereas when we started we mainly worked with smaller businesses and one man bands. We’re...

www.ukbusinessforums.co.uk

As suggested in that thread, keep the two completely separate. Two different markets that are unlikely to ever meet. If you want to promote under the same brand you could cheapen the offering to the bespoke customers (why am I paying £1500 when you can do the same for £39/month?). You can see the differences but the client won't differentiate.

How many clients paying £39/month will you need to break even? Something like this is going to eat up resources unless you outsource to overseas sausage factories.

 

[Chris Ashdown]

How much will the new marketing costs be

How much management time taken up with the low cost project and at what cost to the main breadwinner section

Hard to be a jack of all trades and the marketing time to new or newish companies can be quite high