Pay peanuts, get monkeys?

It is as a result of discussions with other professionals recently, and from past experience, I ask this question. How do businesses value marketing services? Those who expect to get professional marketing advice and guidance for tuppence a month, really are not valuing their own business, in my opinion. You would expect a professional fee from solicitors and accountants, so why do people not view professional marketing consultancies in the same light? Just like solicitors and accountants, we have studied hard to attain our qualifications and we have put in many years of experience to be able to give truly valuable marketing advice.

This also goes for graphic design; we had a client who agreed a price (albeit a small price) for an advertisement to be designed. This we did.. then he said, how much? I could have done this myself! Oh no he couldn't - did he know how to check the dpi of the images and ensure they were CMYK and not RGB (I wonder if he'd have known the difference), and did he know how to create the file to be print-ready? You are not paying just for what you see on the paper, but the professional time involved in searching through lots of possible images, and coming up with the one that best demonstrates the client's work, making sure the overall effect is pleasing to the eye and conveying the right message. A lot goes on 'behind the scenes'.

If companies are just looking at design and marketing on a 'cheapest' option, then surely they should expect to get monkeys looking after their work if they are only prepared to pay peanuts.

I welcome the view of other 4Ners.

Caroline

Agree in every way possible!

A client of mine recently asked me to reduce my fees considerably, even though we are EXTREMELY competitive with them already. When I refused after justifying my reasons, he spat the dummy and said he was off to another agency. Quite amusingly I said, 'Well when you realise why they are so cheap, give me a call and we will continue the current deal......'

3 Days later, he eat a huge amount of humble pie!! Since then, they have signed into a Sole Supplier Agreement for the fees that were originally in place

Know your value, not your competitors

Totally agree, Caroline.

"Value" is a much better word, as it takes account of what is generated as well as what it costs.

Take my own logo as an example. It cost me about £1300 by the time we had finished. The process took a month and included considerable time and effort, including 3 meetings and 3 draft portfolio revisions. I was VERY particular & fussy! As it turns out, the end product is no more than a font that can be bought for $20, but that is irrelevant. It still had to be identified as the best solution for me. The fact is that I had some very specific requirements of my logo and the final product has been hugely successful in achieving those.

I could have got a logo for £25, but.....

Caroline,

Some very good points above.

I think some companies have difficulty understanding (as with case above) that you didn't just sit down and design the advert for him there was a creative process and thought gone into delivering the right message in a concise and clear way using appropriate imagery.

All this takes time and time=money.

In the creative industries it is experience and knowledge you are commissioning, like a solicitor or plumber only CREATIVE.

The greater the experience and knowledge, especailly in specific fields such as packaging or large format work, the greater the cost per hour.

The other issue is that clients are outlaying money to generate money and so are trying to cut the budget tight thinking they are doing themselves (and you !) a favour. The fact is the more you spend the more you will benefit from well thought out, well targeted, well designed material.

Alex

There is always a cheaper option but I just ask clients to think about value and how there business is being represented in this situation.

Caroline

How true your statements are! I cringe when new clients say they've got artwork ready for print - and then tell me it's in Word or something simliar. When I try to explain what's needed I usually get the classic 'Well it looks OK on my screen' response.

Always a struggle, this one.

My husband heads up our design department and he was a designer working in print for many years before he came in-house with me. What he doesn't know about print, isn't worth knowing. I think this is one of our USPs on the design side of our business - our printers love us and know they can rely on us 100%. But this is what the client doesn't see or appreciate.

Caroline

Looking from the other side of the fence in terms of paying for services, the most important thing for me is that I find someone who I believe understands me and or the way I think. It's corny, but this is where the KNOW LIKE & TRUST come into play, but that doesn't mean some negotiation can't be had.

I asked a question along time ago of a 4Networker, "what happens if I don't like what you do?" Their response was "I'll do it again until you like it"

That's worth paying for.

HA HA, nearly spilled my tea Michael, as I was posting while this was being written. You must be talking about me! lol

Hi Paul

I used to get this alot when I was in recruitment, but if you know your value why should you reduce esp if you are already competitive.

Satisfaction personified with end result I bet, conviction is a wonderful thing

Regards

Chris

I'm with you on this Caroline. Valuing creative work is always difficult, but as a qualified and experienced professional you have to value your expertise properly or you'll not do yourself or your clients any favours. After all, where's the point in charging tuppence ha'penny for everything and ending up without a business? Where's the point in hacking away for hours and hours for no reward, unless you're doing it as a hobby?

I believe that quality, professionism and experience are worth something, and design takes time to get right. It's not just about throwing some stuff down on a page, it's about getting the whole process right, both creatively and technically.

I know I've lost jobs on price, but c'est la vie, you're not going to win everything. I want clients who value what I do for them, and I aim that this should be the case in every case, and sincerely hope it is. I agree with Steve, offering value for money is the key really.

You never entered my mind, Deano! You're a pussycat comapred to some of the nightmares I've encountered.

How's the hot sauce doing in this weather?

Many people are unclear about what they are buying when it comes to fixed costs / overheads. Virtually every choice they make about business expenditure is an investment. They spend money to get goods or services that are used to generate income which, if they've done their sums right, should generate a profit.

So the first thing is to work out what benefit they got from their 'investment' be it electricity (essential to the running of the office but you can still control how much you use) or be it marketing (not essential if you have more customers than you can cope with, otherwise rather a good idea).

So, if a marketing campaign if going to cost £5,000 but generate £20,000 worth of sales and you have a gross margin of 50% then you are going to make £10,000 (gross profit) - £5,000 (for marketing costs) = £5,000 net profit. That's £5,000 more than you started with.

Or to use another industry, if £5,000 worth of advice & coaching is going to help you sell more & work better .... You get the idea.

Now, where are the guarantee's you may ask. Well, if you want a guarantee, buy it from Argos. Business is about making money on the premise that you may lose occasionally. The closest you are going to get to a guarantee is by picking someone with experience and talent. Even my guarantee isn't unconditional!

This is our philosophy too. If, after presenting various concepts at the first stage, they don't think they can work with us or don't think we've grasped their business, they can walk away without charge (we have yet to see this happen). But if they do want to work with us, we keep on developing it until its right... for the price originally quoted.

Caroline

That is great Caroline, and the best approach. It installs confidence from the start. I had to walk away from another person, when I realised that they just weren't on the same hymn sheet as me. That is hard, but sometimes necessary.