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Strategic Agency or Vendor: Which Sort Are You?

Strategic Agency or Vendor

Now and then, I see an agency question on the Second Wind Forums that gives me pause. For instance, one agency asked for help assembling “average creative prices” for her “price list.”

I’m already envisioning a menu of services (and a blue-plate special on Tuesdays – “Add soup to your entree and get dessert free!”). Seriously? This is not how agencies should present their services or value to clients, if they hope to be something more than a fulfillment vendor.

As another member responded, “As far as standard pricing, there ain’t no such thing.” Every project is unique. To offer a menu-style price list for logo design, brochures, print ads, banner ads, a search campaign, etc., is to put your firm in the same category as those print-on-demand services you see all over the Internet. Pick the size, number of colors, folds, tabs, bleeds, etc. It’s commodity pricing… and no agency can survive for long as a commodity.

Agencies should be providing more than fulfillment. They should offer customer knowledge and insights; competitive and category knowledge; media expertise; strategic planning; product and service innovation concepts; brand development and management skills; channel marketing knowledge; and a host of other value-added skills. Because all of this know-how and insight factors into each and every project or campaign you undertake, there is really no such thing as an “average” price for anything you do.

The Right Way to Price

Don’t get me wrong: we can certainly offer estimates based on a true understanding of what the client wants and needs, based on clear input and some discussion of business goals and objectives. Many agencies assemble a database of projects they can refer to so they can provide clients a “ballpark” estimate, but even that pricing approach is built on doing a “firm” estimate once more accurate project specs are determined, usually when the creative concept is approved.

Another factor in job cost is the client. A member responding to the Forums post said, “… because each client’s personality, ego, experience and ability to communicate what they want and like differs, each is unique.” A client who is decisive and communicates clearly, one who is open to higher-risk creative concepts, may be easier to work with, reducing the cost of even more expensive projects. Meanwhile, costs for a small-budget project could add up quickly if the client dithers about concepts, or cavils against agency recommendations, or cherry-picks ideas from three concepts to create a fourth (less effective) approach. Inevitably, this client will be the one to request numerous last-minute changes… and probably will question the final invoice, too. Too many clients like this make a mockery of menu-style pricing, since they always exceed the scope of work.

Present Your Agency as Strategic

If a client asks to see your “price list,” you have two acceptable options:

  • Provide a “ballpark” estimate based on specs assembled in the input session, then reconfirm the cost when creative is approved;
  • Ask smart, strategic “depth” questions in the input session and then assemble a formal proposal with an estimate.

 

What do we mean by “asking strategic questions”? The kinds and numbers of questions will vary depending in what the client wants or needs. Here are some examples:

1.   What will this project be used for? What primary goals or objectives do you hope to achieve?

2.   How does it align with your overall marketing plan?

3.   Who are your target audiences?

4.   What cross-channel strategies will you use to support this project?

5.   How will you measure success or effectiveness?

6.   Do you have a budget in mind, or may we make a proposal based on what you want to achieve?

You can see that there is a different mindset to being a strategic agency versus simply accepting a project request. You should never set your agency up to just produce a brochure. Always examine projects to see what can be done to increase effectiveness and expand reach for the client. It’s not just a brochure; it’s a brochure supported by an email campaign with integrated social media/PR, search engine optimization and banner ads on selected websites. It’s not just a logo, but a channel marketing campaign introducing the new product packaging and providing selling incentives. It’s not just a trade show display, but event marketing including social network interactive, Twitter, email, video pre-promotion and a live-blog at the event, all aimed at capturing and converting leads.

Always Highlight Your Value Proposition

Working with an agency should provide something more to the client than working with a mere vendor. Otherwise, why would they? It’s the job of the agency principal or account service person to explain what they gain from the agency’s strategic approach. So, they’re not just spending $20,000 on a direct response campaign; they’re investing $20,000 to generate an increase in sales of $100,000 over the next year. Always make a value proposition part of your upselling strategy. Just be sure you can deliver on that implied promise.

If you’re promising sales increases, ask to manage lead capture and fulfillment, and include training to ensure leads are converted. Better yet, stay away from sales as a promised result; there are too many influences that can negate agency efforts, many of which are out of your control. Promise to generate an agreed-upon increase in traffic over a set period at specific store locations; or to increase web traffic to a lead-capture landing page within a set time window.

We always recommend agencies approach clients at any level with strategic thinking, not a vendor mindset. If you do this regularly, and deliver the goods through smart planning and great creative, you’ll stop hearing clients ask “What’s this gonna cost me?” The bonus is, as you approach the client more strategically, they learn to think strategically, too. Instead of demanding your “menu,” they’ll be saying, “We want to increase sales of our new product line in this geo-zone. How do you recommend we do it?”

Which is when you can throw that old price-list menu into the round file forever.

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