Then the dot-com thing blew up, agencies got greedy, VC’s got angry at agencies. And widespread distrust of agencies’ accountability suddenly became the norm.
So, now my agency, like other small agencies, has to deal with a client mix that is part retainer and part project-based. Some would argue that the mix is not such a bad thing, as projects can be more profitable for agencies.
The downside, of course, is that project-based work can be tough for three reasons:
It’s hard to staff them, because you never know when projects will come in or how large they will be. Sure, you can rely on freelancers, but I’d rather not.
It’s a budgeting and forecasting nightmare. Have you ever tried to do your quarterly forecasting, only to have a huge project knock on your door a week later and blow your numbers out of the water? A good problem to have, but disruptive nonetheless. Conversely, projects can be pulled, and then you really have budgeting issues.
For some strange reason, project clients expect that their work will be a priority at the agency. And try as we may to manage the expectation the other way, they know that we know there are too many agencies willing to take on their work.
So, what to do? For starters, at Brownstein Group, we have a careful vetting process that encourages a dedicated (read: retained) AOR relationship. Short of that, we will place a pricing premium on the project. And only take it on if it will somehow benefit the agency. For example, if the project gets us experience in a category we don’t have much experience in. Or if it is a particularly juicy creative opportunity. We also use it to start a relationship that we hope to grow, and cross-sell with our other agency disciplines.
Other than that, give me a retained client any day. Those are the clients that I still take out for a round of golf, a Flyers hockey game. Or even one of those two-hour lunches I’ve heard so much about.