The goal of business is to make a profit. The long way to achieve it leads through the effective setting of processes, healthy cash-flow to the evaluation of the profitability of individual projects or clients.
Without profitable clients, it is impossible to achieve a positive economic result. Non-profit clients do not bring money to the agency, but they can help to build a good name and the influx of new clients and talents from the marketing market. Is it worthwhile for the agency to work for a pro bono client?
The one who gives vs. one who takes
Profit and non-profit. This is how we divide the clients thanks to which the agency achieves or does not make a profit. It is likely that not all clients are equally profitable. The costs of an agency that provides a service to an unprofitable client are higher than the income from this client. The client can be looked at from the point of view of profitability from several angles.
- A loyal client who brings low income to the agency, but pays his invoices on time and is a long-term partner. After the first work disagreements, he will not leave for a new agency.
- A creditworthy client who ensures a high income for the agency. The provision of services for him is abrupt, inconsistent, and difficult to plan. He is not a long-term client of the agency.
- Pro bono client, i.e. a non-profit charitable organization that does not pay the agency for its work, or minimum applies. The agency has higher costs than income with the work for this client.
Categorization is not fixed and organizations can modify and change it. It is important that agency owners know the value and profitability of each project or client.
Find out if the customer is profitable
Helpful in evaluating profitability are software that not only monitor the company’s project management, but also the flow of finances. Among other things, they evaluate the entered data and process a thorough profitability analysis. She will check how the client affects the company’s costs and expenses.
Agency owners should have an overview of the profitability of each client. It should also be clear to them the reasons for keeping a pro bono client and also when it is time to end cooperation with him. Because neglecting profitable clients at the expense of non-profitable ones is a sure way to a negative economic result.
What does a pro bono client bring besides increased costs?
When evaluating the utility of the client for the agency, it is necessary to monitor non-financial indicators as well. The pro bono client does not cover the company account with large amounts, but it positively affects other factors, namely:
- positive references to third parties
- positive PR among competitors
- an opportunity for more creative, bolder ideas
- marketing awards
- new talents to the agency
The non-profit organization likes to show off the campaign or visuals that the agency has prepared for them. Its credibility increases in the eyes of the public and competitors. The agency helps the third sector, opens its heart, shows a human face. Working for pro bono clients allows you to try bold creative ideas or unusual processing of assignments. There is room to grasp topics that standard paying customers avoid. The result can be an award for the marketing campaign (not only) at international competitions. There is a limited number of creative people in the marketing market. The most valuable marketers follow the market, know award-winning projects and are interested in successful agencies. Among them are those who work for non-profit projects. Pro bono clients are a magnet for marketing talent.
Decide in your favor
After the profitability analysis comes the decision. What about an unprofitable customer? Terminate cooperation or turn a client into a profitable one? Alternatively, sacrifice income that the agency is willing to replace with non-financial factors such as a good reputation or positive PR towards future partners and employees? Owners or managers cannot answer these questions without high-quality reports from tools that connect finances with project management. Allfred will help you find your way around, accurately evaluate and plan. Will you try it?