Clarity of Purpose. Flexibility of Process

Or beware consultants with a fixed view. 

There is a world of difference between the purpose of your Agency and how you go about it. The purpose should be to solve business problems for your clients. Whether it’s to help them sell more, influence more or promote their brand more effectively that should be your purpose. 

How you do that will vary. Anyone with a fixed process will find themselves going backwards quickly; overtaken by nimbler competitors. 

What is true of how you work is also true of how you charge for your services. This is not about value pricing versus timesheets; plenty of that another time. No, this is about the need to remain flexible when it comes to pricing. 

I came across just such a case recently. A small agency, recently set up and initially profitable had hit a major problem with one client that nearly broke them. They were in recovery but they were living hand to mouth from project to project with a constant cash flow struggle. 

I wasn’t charging them for my time; I was doing it as a favour. Occasionally I feel generous. I’d looked at their numbers and was explaining what they meant and how they could use them. I was on my hobby horse about the need for an accurate forecast and a new business pipeline. About how the hot prospects on the pipeline could change the next few months if the deals were closed. 

I asked if any of the pipeline deals were price sensitive. The answer was, yes, this one definitely was and this one probably is. Do you have any capacity in the month after next when your forecast dips rather alarmingly? Again the answer was positive. 

“Could you close the jobs if you did a deal on the price?” In the current situation with debts to pay and payroll to meet it seemed to be obvious plan. 

The reply prompted this blog. They had spoken to a consultant who advised them never to discount their rate; it sent out the wrong message and undervalued their worth. A fixed approach to pricing. 

Probably sound advice if you were successful, had money in the bank and had more opportunities than you could handle. To a start-up who had little or no money though it was potentially disastrous. 

Some things are absolute; advice about how to price Agency services are absolutely not. 

In the early years you have to be flexible. In terms of tasks you take on; in terms of work that you do and certainly in terms of how you price your services. 

Be prepared to negotiate. Always think in terms of the extra revenue a job will bring in and what extra costs you will incur. Using up the available capacity you have already paid for is a far more successful tactic to survive and prosper than a refusal to negotiate on price which leaves your team twiddling their thumbs. 

One of the (many) challenges of starting and running your agency is sifting through well-meaning advice of consultants. What could be wrong with seeking help from experts in their field? Nothing really just beware if you get a fixed, absolute point of view about something as subjective as what you should charge. Context counts.