Coronavirus March 25, 2020

PPC Agency Economics in the Age of COVID-19

Gary Spagnoli @garysbasement

I don't usually do this, but I'm at lunch and want to open up about how COVID-19 has impacted our business, and what better channel to be transparent in than IndieHackers :)

Background:
I run an SEO + PPC agency ( https://www.ZenAnchor.com ) that specializes in the health and wellness field. We work with dentists, doctors, gyms, D2C health insurance, etc...

Our team is 4 people at Zen Anchor today (including myself). We also have approx 12 contractors brought on when necessary. We're fully remote.

How Covid 19 Has Impacted Us:
At the start of March, we were working with 15 clients. We were adding 2 clients per month since January.

Today we work with 9 clients, as 6 have been placed on pause.

Dental client paused last Monday. Gym client had literally no choice but to go on pause. Even one event we were marketing for (a $60k annual contract) has come into limbo because they don't think travel will normalize by Q4. So even the accounts beyond health and wellness are pulling back.

Out of the 6 paused, we expect 3 to re-activate when this blows over, but no guarantees.

Economics:
The average revenue per client is approx $2k per month.
So we were earning approx $30k in monthly revenue (MRR).

The 9 clients left actually has lowered our AOV, and brought us down to just shy of $16k in MRR.

Beyond the team, we pay for services and software which amounts to approx $1300 per month in expenses (MRE).

So all expenses in, we currently spend about $20k in MRE.
Today, we have $50k in the bank.
We still have MRR... so we'll be bleeding approx $4k per month until we fill the hole.

Solutions:
We'll make it through this, we should be fine. I don't know how this impacts the overall economy, but there's some insights to our one small business.

We've been pro-active on every client since the campaign pauses began two weeks back. We scheduled 30 min - 1 hour strategy calls with every customer since then.

One account is expanding scope (insurance) since we've been pro-active. We're also providing telemedicine consulting support, that's HIPAA compliant, for these practices. We've also been doing free audits to local practices and reaching out to provide our SEO and PPC services WITH teledoc integration. This has lead to 4 sales calls already since we've begun this outreach (it just started Monday).

Crazy times.

If you have any questions about how we're proactively handling this or need help on the SEO or PPC front, just ask away!

Good luck to all of you out there :)