Reducing Fees to Land a Client

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MARC BROWNSTEIN: Recently, I wrote about about getting close to landing a new piece of business, only to see it go elsewhere. As we all know, what's critical in a relationship business such as ours... is starting a relationship. Starting is the operative word.

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!
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