To white label or not to white label? That is the question… Yes, we’re starting a blog post by paraphrasing that tired cliche, but it’s definitely a question that your agency should be weighing.
Simply put, white-labeling is the process of purchasing a private label from a third-party, rebranding it as your brand’s own, and then reselling to your own clients. More to the point, however, white-labeling makes it possible for your agency to offer a wide range of resources to your clients without having to invest too many resources in developing and deploying a platform that your clients can benefit from.
But is white-labeling right for your business? Should you be considering white-labeling a solution just because you can and not because your business needs to? These are both fair questions, and the answer to them depends on where your business is at and what it actually does. To help you answer them, however, we’ve drawn on our experience working with agencies who use our own white label offering, and have laid out 5 instances in which white-labeling makes perfect sense.
1. To focus on your core business
Developing, launching, and supporting a new service or platform requires precious resources, like time, energy, and man-hours. More importantly, there’s the opportunity cost in that every day, week, and month you spend developing a new service or platform is a day, week, or month you don’t spend growing other parts of your business. By white-labeling an already established software or service, however, you can deploy a new offering to your clients without diverting resources from your core business -- such as sales, account management, etc.
2. To expand your agency’s service offering
More important than allowing you to focus on your core business is that white-labeling a proven software or service allows you to expand your agency’s current service offering. This allows you to meet an existing client demand, grow existing accounts, improve client retention, and appeal to potential clients that you couldn’t before. So the bottom line is that your bottom line has more room to grow as you (1) offer current clients additional value-added services, and (2) attract new clients with those new value-added services.
3. To bolster your agency’s cash flow
Most cloud-based services charge a monthly access fee instead of a yearly license, and as your agency starts offering a white labeled solution to its clients, you’ll be able to tap into that extra incremental SaaS revenue stream. And this distribution of monthly recurring revenue will help keep your agency’s cash flow steady. There’s also the added incentive that charging monthly for your value-added white label will also make it more affordable and appealing to your clients, helping to increase the demand for that white labeled service.
4. To benefit from your white label partner’s resources
White labeling a solution allows you to focus on your core business in more ways than one. Specifically, when you white label, you also get access to the experience and expertise of the team behind that white label. Your white label provider has unparalleled experience developing, testing, and updating their platform. This means that any bugs, issues, or updates can be entrusted to your provider, allowing you to free up internal resources, and focus on delivering what your agency does best, like strategy and account management.
5. To enhance your agency’s brand
Expanding your service offering while focusing on your core business is one thing, but doing so in a way that protects or enhances your brand’s image is quite another. It’s easy for any agency to start offering value-added services using third-party tools, but if the tools aren’t white labeled, it can harm perceptions of your brand’s legitimacy, and potentially cost you the client down the road. For instance, you could expand your service offering tomorrow to include well known third-party tools like Moz, Salesforce, or Google Analytics. But your client’s perception will be that the value-add is in the tool and not in your agency’s brand and expertise. By offering your clients a solution that you’ve white labeled, however, your brand will not only retain its perceived value, but enhance it as it has expanded its offering to help your clients overcome yet another challenge.
6. To protect your accounts
Furthermore, when you’re working with a technology partner that is not white labeled, you run a higher risk of losing clients (or the mandate) altogether. Either the client decides to manage the tool in-house because your brand isn’t directly tied to the value-added service, or your technology partners reach out to your clients directly. By white-labeling, however, you maintain a degree of insulation between your technology provider and your clients, and make your agency a more indispensable part of the value-added equation.
7. To maintain your agency’s independence
Just like relying on third-party tools can damage perceptions of your agency’s legitimacy or value-added offering, it can also erode your agency’s independence. Specifically, if the third-party tool you’re using stops meeting your needs and you have to source a new one, it causes friction with clients because you have to justify the migration. When you white label a solution, however, any migration to a new platform will go unchallenged by clients. Of course, the interface will change, but that can be largely chalked up to a platform update, and rather than friction, what the client sees is a committed agency that is continually updating their platform to better service its clients.
White labels: a blank canvas for business
At the end of the day, whether or not you white label a third-party solution will depend a lot on your business. Is there an immediate need for the white labeled solution? And if not, does it at least represent an opportunity to grow your business and revenues? You know your business and clients better than anyone, so these are questions only you can answer. However, if expanding your service offering through value-added technology is something you’re considering, know that white-labeling is a quick and cost-effective solution that will help you keep focused on your core business and keeping your clients satisfied.