Frankly, I'm jealous of the high billable rates. I can't imagine a client of a small or midsize agency paying anywhere near $1,000. In fact, to my knowledge, we cannot earn half of that, even for top partners at agencies. So, it leads me to believe that we are doing something wrong as an industry. After all, people complain about their lawyers, but still pay them top rates. Perhaps that's because they are driving value. Marketing agencies -- especially the good ones -- certainly drive value, too. In fact, we can be more responsible for a companies' success than a law firm, accounting firm or consulting firm. Just ask Phil Knight.
So where's the disconnect? Why are small marketing shops still forced to justify $350 for an hourly rate for a strategic planner? Especially if that planner comes up with an insight that changes the clients' business? A small price to pay for potentially millions of dollars in incremental sales.
Much of this issue comes down to respect. We have lost some respect over the years by giving away our ideas in spec pitches. By not doing the right thing for the client all of the time. By not hiring the best and the brightest. But it's not all of our fault. Some companies simply view marketing as a necessary evil. An expense versus an investment. The craft of advertising is not consistently held in high esteem by many clients and the public in general, except on Super Bowl Sunday. So, why should they pay us $1,000 an hour?
I propose some solutions to get us to see the day when we can earn those kind of rates:
- Stop giving away our strategic thinking. It's the stuff that ought to get a premium, yet we don't value it to the degree that we should. And then some agencies charge too much for the tactical stuff, which usually doesn't command the same high rates.
- Recruit smarter talent. Let them loose on behalf of your clients. Deliver game-changing ideas.
- Don't worry about billable rates, and charge for the VALUE of the idea more consistently. It's our job to make our clients rich. So do that, and I'm sure your clients will compensate you fairly.
- If you are concerned that you won't be fairly compensated for successful work, write incentive clauses into your agency-client agreement in advance.
- Become more important to your client. When the CEO of your client sees you, does she/he see a "crazy ad type" or a respected consultant? Get deep into their business, care a ton about helping your client grow, deliver brilliant thinking, and you will become invaluable.
- If all of the above fail, then go to law school and get your degree. Only problem is, lawyers don't have as much fun as we do.