The fact is, you’re always negotiating (even when you think you’re not)

Real agency problems and solutions

Ever found yourself wanting to charge more for a job but feeling you can’t because you’re dealing with a new client or opportunity?

A client – let’s call him Adam – called me to chew over an issue. He had a new prospect, who worked for a brand within a target organisation, ready to buy. Adam was planning on ‘over-servicing’ the first project. He wanted to wow the client and show how good they are in the hope of securing more work.

He knew something wasn’t quite right, but couldn’t unpick it.

  • The prospect called with a brief to create 5 pieces of content but had no budget approved
  • Adam’s team responded with well received ideas
  • The prospect had his budget approved – Let’s say £15k. The budget was fixed; no flex, no wiggle.
  • Adam’s agency typically charge £5k for content of this type, ergo there wasn’t enough budget for 5
  • Adam wanted to lock down the client and was prepared to supply £25k of work for £15k

That’s when he called. We concluded:

  • The prospect negotiated well. He dangled a job without a budget, Adam bit
  • He came back without enough budget knowing he was in a position of strength
  • What Adam hadn’t twigged was that he was negotiating at all; simply responding with enthusiasm and creativity, but doing so before the budget was established set a level of expectation
  • Adam was about to compound the issue by teaching the prospect he could have £25k worth of effort for £15k. When the next project comes along, there’s no way the client will pay almost half as much again for the same outputs.
  • It’s not too late to continue the negotiation. And negotiating doesn’t just include the fees.

So what did Adam do?

  • He spoke to the prospect and explained the £15k budget was enough to buy three content pieces but not five.

Now we are back and negotiating.

  • The client likes the work Adam’s team create (it’s damn good) and made it clear that he wanted them to do the job.
  • Adam had made it clear that whilst they want to have a relationship with the prospect’s organisation, they couldn’t under-sell themselves.

It would have been easy for Adam to offer a discount at this stage – a gesture of good will. You could argue that at least the ‘real’ price point had been established, even though the price for this job would be below rate card. But Adam didn’t do that because the ‘real’ price point is set by what you charge, not your price list. Adam held his nerve and asked the client what he thought the next step should be. This was a great move because now they were co-authoring a solution. Not only did it make a good outcome more likely, it would be one where the prospect would feel invested and comfortable.

‘the ‘real’ price point is set by what you charge, not your price list.’

The prospect proposed that he could commit to awarding Adam’s agency with the next project at rate card. He couldn’t guarantee when it would happen, or the size of the project, but he could assure Adam that it would be his. That’s a great concession – securing a second project goes a long way to establishing a solid working relationship.

Adam acknowledged and accepted the offer but pressed for more. Given the slightly vague promise of more work, Adam asked the client to commit to paying the additional £10k for the first project if a second project didn’t transpire within an agreed period. He also explained that their ambition is to create great work that clients can be proud of. Assuming the prospect was proud of the work, would he be prepared to spend some time helping Adam understand how his organisation procure content services. The prospect was happy to agree and a deal was done. The project is now under way and the prospect, now client, is heavily invested in Adam’s success.

You may have taken a different approach, so might I. But I think Adam did well.

He secured the new client, established the value of his work, found a way for the client to help him come to a mutually beneficial solution and has established an open and collaborative approach to working with his client even before they started the project. And whilst he is a very charming chaps, Adam also has made it clear that he expects to develop his relationships across the other brands in the group, basing that on the success of the work he is doing for the new client.

It goes without saying I discussed sharing this example (Albeit with changed figures and names) with my client. Do you find sharing common agency problems useful? How do you avoid underselling yourself when entering a new relationship with new prospects?

As ever, I’d love to hear your thoughts.



Search the whole etc Playbook...

We have 100's of articles to help you with leadership, growth, talent and running a better business.

Agency Founders Surgery - free 1 to 1.

If you have something on your mind, a challenge you’re wrestling with or just want an alternative point of view, I’d be very happy to lend an ear and maybe help you start to unpick the issues.