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Do we really want to be on the dollar menu as agencies?

June 30, 2010

I know the economy has made it tough, I know people lost jobs, and companies are being more than conservative when it comes to spending.

What I don’t like is the cheapening of services many agencies have resorted to in an effort to make a buck. I want to draw a line here though. Even when times are good many agencies will lessen an estimate, do pro bono, or even “discount” a rate because of the cause, the appeal of that brand, or simply out of kindness of our agency hearts (right…).

What I am talking about is this new quick reaction to win business by reducing rates to an unprofitable margin and undercutting to maintain business (again if you don’t need to). I was on the client side once and that sets an ugly precedent. One, we all talk. Why should I, Client A, pay full rates when you just gave Client B a break? Two, once you discount I am going to expect it, not all the time, and not on the same things. Discounting a $15,000 brochure now hurts, what if I want the $200,000 TV spot production reduced, in half, later?

I also believe in value and you get what you pay for. I personally, don’t want the cheapest solution, especially when dealing with communications that can help drive dollars to the bottom line.

From the agency side I want to feel good about helping clients. I want them to enjoy the process we go through and the outcome. I also want a job. A job that is paid for because we gave a great solution that made sense. If we discount, either we will have to cut corners and that could equate to a lower quality of work, or we need to let people go or hire less experienced staff. I don’t see a win in those scenarios.

Clients if you do have a small budget, let the agency work with you to prioritize. Be purposeful, reasonable, and realistic with your budget and be prepared to get a solution worth its weight in gold.

What have you all seen and what, if anything, are you giving away for a buck?

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