Question

Topic: Advertising/PR

How To Restructure My Fees?

Posted by Anonymous on 12/1/2005 at 5:38 PM ET 250 Points
My marketing agency has been very specialized and pleasingly successful over the past three years. I have operated on a fee for service / firm, upfront quote basis. I have a new client hinting that they want me to take over their media buying strategy and oversight. While I know I will be able to give them a great service and improve their ROI, I am unsure about the best fee schedule. I know from experience that they will be slow to approve ad copy and generally require more work-per-decision than the average client. Any suggestions on a fee schedule that will be safe for me and fair to them?
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RESPONSES

  • Posted by mgoodman on 12/1/2005 at 7:15 PM Accepted
    While I am a big believer in the "fee for service" project pricing approach, this sounds like a client who may take advantage of the situation. Of course, you can always hike the fee by 20% and live with their slow decision-making process, but you'll never feel that it's really fair to you.

    My suggestion would be that you talk with the client about the situation and the impact their style has on your business. Tell them you'd like to offer them the best rate for your service because they are such a valuable client, etc., but that you can't justify it if they are going to require more resources and time than the fee would otherwise include. See what they say.

    If they say, "We'll change and be faster," or words to that effect, you might even agree to the standard fee but require some up-front payment and/or a monthly minimum.

    Hope this is helpful.
  • Posted by telemoxie on 12/3/2005 at 10:17 AM Member
    In addition to working to best structure your fees, I would encourage you to focus on LOOKING FOR NEW BUSINESS. You and I both value and treasure our long term client relationships, however, occasionally terms do get renegotiated. You should multiply the efforts you are putting into finding new business ASAP. The way to win negotiations is to have "walk away power".

    If you suddenly are busier than ever (yet still highly responsive to your bread and butter clients) then the client will get a warm and fuzzy feeling that they are working with marketing experts and getting good value for their money, and this will probably be resolved in a good way for everyone.
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