Talk to Your Clients About Money Like You Talk to Your Kids About Sex
Marketing and advertising communicators are in a creative business, and the "business" side of what we do is often hard to talk about -- especially when it comes to money.
Maybe if agencies took a nontraditional approach in talking to our clients about money, we'd find our daily work a little easier and much more successful. Here's a thought: Try talking to your clients about money like you talk to your kids about sex.
My own two children now are adults. I'd decided from the start that I would make these discussions as natural as talking to them about what kind of toast they wanted for breakfast. I embedded age-appropriate topics about sexuality into everyday conversation and used "teachable moments" to educate them in a healthy way. Whenever I got in over my head, I'd say "toast" to myself and find the ability to refocus.
The same holds true for clients. Establish from the start that money is part of every client/agency relationship, and financial conversations will become natural and productive instead of awkward and defensive.
Here are five things to keep in mind when talking to your clients about money:
1. Talk about it from the beginning.
Just as the person who starts a negotiation has more leverage, the person who begins a conversation has the power to set the terms. Don’t wait until things grow uncomfortable to bring up the topic. Even if your client doesn't ask, be clear from the start about your financial expectations as an agency. This will help normalize the discussion of money.
What is the agency fee strategy? How transparent are you about utilization and deployment of resources? If you structure your compensation based on fixed fees for a specific scope, timing and set deliverables -- and deliver on the scope of work -- your client needn't get into the weeds on factors such as FTEs, blended rates and utilization.
2. Educate based on fact, not fiction.
There's a lot of misinformation out there about how agencies are compensated, how transparent they are (or aren't) with their clients and what other agencies charge for seemingly similar services or results. It’s up to you to correct your client's impressions of what they hear in the school yard.
Send a crystal-clear message on how your agency's approach to business compares with others in the market. Compile relevant data and be prepared to support not only your pricing structure but also your rationale for rates, overhead and margins. Research such as 4A's industry-compensation surveys can be invaluable in these situations.
3. Be honest, but don't scare them away.
Be open about your fees and what you think it will take to deliver on the relationship. Take time to educate yourself on agency compensation trends. If the price is too high, remain open to negotiate on some options that give them what they want -- at a price you both agree is fair and reasonable.
You may need to walk away if the negotiations don't work out, but not until you've provided them with some other ways they could get the work done. For example, you might be able to connect them with people you know and trust.
4. Bring in an expert for the tough questions.
More clients are engaging procurement professionals to help lead agency negotiations. Consider arming your agency with an appropriate "agency-procurement" counterpart as well. It's crucial to deploy someone with stellar negotiating skills and a keen understanding of the major factors at play: client/agency finance, agency process and the services you offer to justify the fees you propose.
If the agency-procurement lead is involved from the start, he or she can become an invaluable part of the client relationship. This individual can act as an unbiased voice of reason for you to leverage during critical financial moments. With this person on hand, creatives and others can stay out of the financial talks and focus on what they do best. Don't underestimate the power of this "secret weapon."
Related: 10 Tips to Negotiate Like a Boss
5. Develop a relationship in which hard conversations come easily.
For the most part, we are an industry of pleasers. And while we all hate to talk about uncomfortable things, client finance should not be on this list. Start every financial conversation with a plan. It will help you foster an understanding that this is a normal part of doing business, not just a taboo subject that comes up only when there's a problem.