Tips for Understanding Your Competition

Tips for Understanding Your Competition Madison Resources
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As a staffing agency owner, you know that the industry is highly competitive. For this reason, knowing all you can about your competition is vital to your success. Studying your competitors provides insight into their positioning and messaging, the pricing you can achieve, and whether your customers are using other staffing agencies. You can use this information to create improvements for your own agency and stay on top in your industry.

Implement these three tips to better understand and stay ahead of your staffing agency’s competition.

Be Aware of Your Competitors’ Positioning and Messaging

Stay current on your competitors’ operations and advertising. For instance, see what their sourcing process is, where they post job openings, and how they select candidates. Use your findings to implement similar strategies in your own hiring process. Also, visit the customer section of your competitors’ websites to see which companies they do business with. Use the information to create a plan to approach similar customers. Talk with our professionals’  for further advice.

Know the Pricing You Can Achieve

Be aware that you can charge different bill rates for each customer. When setting your pricing, take into account the elements of your direct costs (statutory expenses, and pay rate, workers comp) so you can estimate what your  gross margin will be,. Keep in mind that most staffing agencies have a gross margin between 14-50%, with an average aggregate gross margin of 25%. Also, you may want to get creative to reward a customer  who gives you a lot of business. Additionally, factor in variables such as the number of temps needed, the duration of the assignment, the amount of recruitment time needed, and the compensation level of the resource. Plus, because a customer’s anticipated volume, rate management approaches, location, turnover rate, ease of filling the skill set, and knowledge vary, your bill rate should reflect these issues. Further, consider how much competition you have. The fewer competitors you have, the greater your ability to achieve higher markups. While markup is ideally a very accurate internal measurement tool, try to resist engaging in a contract that bases your pricing on markup.  For customized information on setting your pricing, set up a time to talk with us.

Find Out Whether Your Customers Use Other Staffing Agencies  

Determine whether your customers turn to other agencies to fill their staffing needs. If they do, talk with them about creating an exclusivity agreement with your agency. For instance, point out how your customer will receive better quality candidates by working with only one agency. The reality is that working with multiple agencies creates motivation to produce candidates as quickly as possible. This can result in the customer receiving lower-quality candidates and needing to lengthen the search process. Also, with multiple points of contact involved, communication breakdowns are typical. Even a small miscommunication can have adverse consequences. With the increased number of phone calls, emails, and administrative work on the company’s part, the customer will not be saving as much money using multiple agencies as they would using one.

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