Archive for the 'ROI' Category

In my opinion, one of the most consistent hot-button issues when working w/ vendors is price. I’ve personally seen it more times than I care to think about in my life on both sides of the marketing communications table. I’ve asked the question to dozens of firms and I’ve answered the question from dozens of clients. So believe me, neither side has it easy.

As the client, you’re struggling between “good enough” and “best available”. You (and your customers) want best available, while the finance guys like good enough. Seth Godin talks about it here. You get this feeling deep in the pit of your stomach as you’re watching the agency go through their pitch. You just know that they would work hard for you. You know they would bring all of their world-class expertise to bear on your project. You’re thinking, “they know the industry, they know my business, we get along and their work is top notch”. It’s exactly what you’re looking for. But you have a feeling they’re going to be outside of your budget or at least outside of your idea of what their services should cost. You hate to bring it up because you know that budget shouldn’t be the ultimate deciding factor on what solves your problem or need. Sure there are cheaper firms out there, but these guys have it all and they’re right here in front of you.

From the agency side, you can see it in their eyes. During the discussion and demo the client’s eyes light up. They ask the right questions. They understand what you’re about. But there’s a hesistation, a slight glint of uncertainty. You know that sooner or later you’re going to get the price question. Charging by the hour isn’t really an option because clients demand to know at least of range of prices to consider before signing the dotted line. Charging by the project, or value pricing, is a strange magical mix of time, hourly rate to cover overhead, and some profit padding. Either way you sense there is going to be sticker shock.

In my experience, this scenario happens most often when agencies are presenting to budget spenders not budget deciders. Budget spenders are only worried about their bucket of money being spent efficiently. Solving greater business concerns are typically a secondary requirement otherwise known as “nice to have”. If you’re on the client side and this firm provides the solution you need, then move them up the chain if you cannot make or justify the decision yourself. Become their biggest proponent. Get them in front of the true budget decider. She/he can find the money required to solve problems. Your foresight and problem-solving abilities will be recognized and rewarded. Unless you truly do not have the money available, price is rarely a reason not to buy.

Back to the agencies; if you cannot get past the price question, one of two things is happening. You’re either not working with the right people (budget deciders versus spenders) or you’re not providing enough value to the clients and the price objection is an easy way to say no and move on to another agency with better relationships and/or better offerings and value.

technorati tags > price, client, agency, marketing, communication, budget, seth godin, vendors, value