What You're Really Charging for

Don't Undervalue Your Agency (or Anyone Else's)

Posted by Lorenzo Romero on 12.10.07 @ 01:11 PM

Lorenzo Romero

I once heard a story about Picasso that has lingered in my mind, and I recall it often when I'm dealing with clients regarding the pricing of our services. The story goes like this:

Picasso was painting in the park one afternoon. A woman recognized the master, and wished to capitalize on her good fortune. She politely asked Picasso if he would please sketch her portrait, as she had so long admired his work. He agreed, and within five minutes, handed the woman a lovely portrait. "Thank you! Thank you!" the woman replied. "What do I owe you?" To which, Picasso replied, "That will be $5,000." The woman, taken aback, said, "Five thousand dollors? But, it only took you five minutes!" "No, madam," replied Picasso, "it has taken me all my life."

When small- to medium-sized companies approach us who don't have a lot of experience with the cost of marketing and advertising, I feel that they are often like the woman in the park: "What? That much for an identity package?" They, too, are taken aback at the price of quality workmanship.

There is a lot of confusion surrounding the pricing of creative, I admit, even among industry professionals. We have hourly rates, but do we charge everything by the hour? Of course not. There is inherent value in our work. Like Picasso, it has taken us a lifetime to amass the experience, talent and expertise that allows us to effectively reach our target with the correct message. True creative professional firms are paid to tap into all of their collective lifetimes of knowledge and produce something of true value for their clients -- something that really works for them.

Additionally, hungry young firms have a tendency to virtually give their work away. I have seen several young agencies in our area who are trying so hard to land jobs that they give the farm away. One client can get prices from several different agencies that span the entire spectrum. There seems to be no industry standard and with such price discrepancies for what appears to be "the same job," it becomes necessary to continually educate clients as to what they are paying for and receiving.

I have to admit, pricing was one of the hardest hurdles we had to overcome when starting our agency years ago. We now enjoy consistent pricing because we've done just about every type of creative. But in the beginning, we too, were all over the board. To find consistent pricing for creative from agency to agency? I don't think it happens.

Let me just say, I truly believe in the value of the creative. I believe that without great execution, a great plan can be emaciated. And as such, let's price accordingly. When one agency gives it away, it belittles all of us as an industry. As true professionals, may we always:

• truly aspire to create masterpieces of effective branding for our clients
• guard the belief that great work is of great value to out clients
• reflect the values and character of great craftsmen
• remember the experiences, education, knowledge and talent throughout our lifetimes that have made us what we are today.