Over the past decade—essentially, since the Great Recession—ad agencies and marketing firms have watched strategic relationships erode, procurement barriers arise between clients and agencies, and work shift from strategic and marketing planning to more of a vendor/project level of client-agency interaction. This increase in project assignments over agency of record (AoR) relationships has created a secondary issue: project stoppages.
Stalled Projects Means Stalled Billing
On Second Wind Forums recently, Katie Baxter of Firmidable, New Orleans, LA, posted a query asking how to address clients who are stalling projects. Such stoppages not only interrupt forward progress on the work and jeopardize deadlines, but also greatly delay billing on work already completed. As professional organizations with our own overhead to meet, we can’t afford to wait months for clients to revive stalled projects—and then expecting us to finish long-shelved projects on rush turnaround.
Jeff Klingberg of Mountain Stream Group, Inc., Hampshire, IL, replied with some useful contractual language to explain to clients when accepting the assignment.
“We have the following clauses in our terms and conditions.
“Project Suspension. Should work be suspended at the request of the Client, or delayed through any default of the Client for a period of thirty (30) days, Mountain Stream Group will deem the Project closed, and shall then be entitled to payments for work already carried out and materials specially produced. If Client requests to restart a Project that has been deemed closed, we will charge Client a Project Reactivation Fee as described in Clause 4.8, and issue a new Estimate or Proposal based on the current Project specifications. We will not commence work until we are in receipt of the items listed in Clause 2.10.
“Project Reactivation Fee. If Client lets a Project become closed as described in Clause 2.15, and Client requests to reactivate the Project, we will charge Client a reactivation fee of three (3) hours at our standard hourly rate. Reactivation fee must be paid before we will commence work on the Project.”
Klingberg also noted that if the agreed terms were to bill on installment, they continue to send those bills, even if the client has not responded to move the project forward or agree to shelve it formally. Consider this ongoing billing tactic an extra nudge to move the client off the dime. Generally, the deeper the client’s financial commitment, the less likely a client will stall or shutter a project.
Beyond Contractual Language
There are additional steps agencies can take to manage projects through slowdowns or stoppages:
- Establish a higher tier of client communication.The principal or account manager should be able to connect with client management above the marketing director, to ensure that if a stoppage occurs, they can verify whether that stoppage is dictated by the C-suite, or originates from the marketing department or procurement people.
- Regularly review projects to discuss whether stopped projects need to be addressed by account executives or senior account managers.No stalled project should be permitted to gather cobwebs, especially if you already have substantial hours invested in the job. Stay on top of project flow, and move quickly if you sense a project is “stuck.”
- Remember that for clients, marketing may not be a top priority.It is the agency’s job to ensure that projects are completed in a timely way… or to find out what the hold-up may be so the work can be billed accordingly, or the project can be closed.
- Always be on the lookout for more work.Stalled projects are as dangerous to your cash flow as client turnover. Failure to keep new business in the pipeline means you have less control over the work you accept, or refuse.
To gain clients’ respect, you first need to behave like you deserve it. Professionally manage project scope and scheduling, and don’t be any client’s doormat.