At Brownstein Group, on occasion, we will reduce the fees on an initial client project, so that we can begin working together. Sometimes we'll simply over-deliver and lose money on the first project, in order to make an over-the-top first impression. We don't take this approach with every prospect. Just select companies that we very much want to do business with over the long run. For example, a company may offer us experience in a category we have little experience in, but want to develop. Or, the project offers us a cool, creative opportunity. Or, we want to get close to the CEO, so we price the job a little lower, in order to get a green light.
This obviously has implications.
If we come out of the gate as the low-cost agency, we will likely mis-manage expectations on the client side that we are a low-cost shop. And when we estimate the next project, the client can get sticker shock. And then we risk alienating the client, and not achieving our original objectives of beginning a healthy relationship.
And when we do price normally, will the client still respect us in the morning? Or leave us and hire the next-lowest agency?
For clarity, we only consider this approach when we are presented with a project opportunity. An when we cannot differentiate ourselves with strategic and creative thinking. And we do not step into the murky waters of low-ball pricing on AOR or retained relationships. We leave that for the client's procurement department!