Platform: Internet | Author: Felix Velarde, managing partner at web design and eCRM agency Underwired | Source: NMA magazine | Published: 18.01.07
... of a client we thought we were inches from winning. I was terrified. Everyone had said to me I'd be in for a tough time. And believe me, I was.
There was me thinking my rates were fair - they were slightly above average compared to the 'industry standard rates', but then we're a premium agency. Not a bit of it. The client wanted me to calculate a person's hourly rate based on their cost, overhead, profit and expected hours on the job. I was shocked to be sent a spreadsheet with a formula in it that told me how to calculate how I should charge, and which assumed each member of staff spends over 95% of their time on billable work.
"What about the time they spend growing the agency, keeping up to date, training, professional development, travel time?" I asked, and got short shrift. Conform or be damned, it seemed I was being told.
Then I had a revelation: I realised that we're all in this together.
The client just wants to get on with making money in an efficient way with as little interruption as possible. So it doesn't want the agency to go bust, take the piss, get complacent or just use the win as a stepping stone to the next client. It wants to know you'll be there next month and next year, and that the team it gets to know will continue to run its business.
So procurement is there to make sure the marketing team has the right agency partner, simple as that. It's there to make sure the agency makes a profit, so it will remain motivated and the senior team committed, and will help make money for the client in turn.
The agency too wants to make a profit and keep its (expensively won) clients happy. The last thing it needs is a senior team wearied by a long battle with a procurement department that's only there to set the ground rules. Everyone wants a team of enthusiastic people bristling with ideas, not resentment.
There needs to be some accommodation, compromise even, on both sides. Agencies need to be prepared to reduce their creative process and output to numbers (although to be honest, they should already be doing this, otherwise it's difficult to plan anything), and need to be prepared to audit their time. This was one of the biggest challenges for my own agency.
Marketing clients need to bring procurement in as early as possible to make sure that all parties understand the constraints, processes and, most importantly, the goals ahead of time. Procurement must understand that agencies can't say in advance how long creativity will take or who will necessarily be involved. Together we have to agree how to evaluate our costs as we go along, and be prepared to change things to suit the practical reality of working together.
It's not a battle, there is no conflict. It's a conversation. It should be laid back and smiley. We need each other, and if we do it right (even if it does mean the odd spreadsheet) we end up happier together for longer.
Felix Velarde is managing partner at web design and eCRM agency Underwired