Is your agency good value for money?

By Jonathan Kirk, Founder, Up to the Light

When evaluating agencies, it seems that the overriding client mantra has become ‘value for money’. Increased pressure on client budgets, coupled with procurement department scrutiny, means that this focus is unlikely to diminish any time soon.

Deciding whether a design agency is good value for money can be tricky. While the What Clients Think report* found that 62% of clients believe their agencies are, there are still 32% who consider their agencies to be good value for money only ‘in part’. The reason for this is that although the commercial success of the end creative result is an important factor in their judgement, the assessment is more complex with other factors coming into play. These are concerned with the quality of the client/agency relationship, not just the financial aspects. The hundreds of client interviews that we conduct on behalf of design agencies repeatedly show that perceptions of whether an agency is good value for money go wider and deeper. So here are some of the most common factors that impact upon that judgement.

Let’s start with factors not directly associated with costs:

Too much onus on the client

Do you have a client that is beginning to feel weighed down by the demands of a project and believes that things are being driven more by them than the agency? If so, this impinges on the client’s time, takes them away from other tasks and causes general anxiety about the project delivery. Clients want their agency to manage and drive the project, be on top of every detail and deadline, and fulfil their position as experts. Agencies that need to be ‘micro managed’ or ‘spoon fed’ do not represent value for money, however good the end result.

Lack of added value

When was the last time you phoned a client and said, ‘I’ve got a great idea’? This acid test of proactivity was recently mentioned by a client as evidence of a deterioration in her agency’s value for money. If only it were enough to simply answer the brief and produce good work. However, value for money is often defined as the extent to which the agency goes beyond these basic requirements. Remember that only 18% of clients believe their design agency ‘regularly exceeds’ their expectations. This is because their expectations are quite broad ranging and encompass different aspects of the relationship, not just the quality of work delivered.

The tight squeeze

It is true that clients have long memories for mistakes. 29% of clients refer to an agency ‘mistake’ that happened over a year ago. But it is also true that clients are always grateful to an agency for helping them out of a tight squeeze. This can be turning something around in super quick time, somehow preventing a client from having egg on their face or being a truly supportive ally through a challenging time. These are the occasions that help raise the relationship to new levels of trust. In practical terms, they are credits in the value for money equation.

Feeling stretched

Clients are generally pleased when their agency is growing and successful. The other side of the coin, though, is a nervousness about what this could mean for them – ‘Is client service going to drop off?’, ‘Are we going to be a less important client?’, ‘Is the agency becoming more inward looking, more concerned about itself than its clients?’ In these circumstances, clients can become super sensitive about any indicators of a decline in value for money.

And some factors directly associated with costs:

One size fits all

Most clients appreciate that front end thinking and conceptual design is charged at a premium. Where it can turn slightly sour is when work that the client considers ‘implementation’ appears to be charged at the same level. In clients’ eyes, this becomes evidence of agency inflexibility and demonstrates a lack of understanding about client needs. This ‘one size fits all’ approach is one of the most common client gripes about agency costs and contributes to the statistic that 22% of clients sometimes struggle to understand design agency costs.

Failing to flag up budget issues early enough

For clients this is another form of proactivity – good tracking of project finances, no budget creep, no nasty surprises and no ‘hiding’ of problems. Problems that are flagged up early can usually be overcome but problems mentioned too late in the day almost always leave a bad taste.

Smaller fees matter

It can be easy to overlook smaller amounts of money and see them as relatively unimportant versus larger fees for main project stages. However, some of these smaller amounts can come back to haunt you. These include mark ups that clients see as excessive or ‘extra’ items that clients believe should be included in an on going relationship. In this sense, small costs can easily assume a much larger significance and raise questions about wider value for money.

The key to all this is for agencies to think about value for money in all its aspects and not limit it to a simple project fee versus final deliverable mindset.

* All statistics are taken from the ‘What Clients Think’ report by Up to the Light in association with the DBA. The report is based on 500 client interviews conducted on behalf of design agencies.

About: Jonathan Kirk

Up to the Light is the leading provider of Client Surveys to the UK design industry and publishes the annual ‘What Clients Think’ report, supported by the DBA. The consultancy also partners with agencies to provide brand positioning and brand strategy for end clients. Founder, Jonathan Kirk is continually involved at the sharp end presenting, pitching and delivering high profile strategic work for major brands. This is of huge benefit to all his clients.

Jonathan’s senior roles have included New Business Director of Fitch, the global brand design group, and Business Development Director of Havas EHS, one of Europe’s largest direct response agencies. He is a member of the DBA’s Experts Register and is a frequent conference speaker and trade press contributor.

Image credits:

Daniele Levis Pelusi | Unsplash

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