When a client/agency relationship works as intended, a strategic alliance is formed built upon shared business values such as trust and professionalism. The client provides detailed direction for their needs and the agency responds with the requisite marketing approach and creative execution. Going back in time, when the possibility of working with each other was being explored, one of the most important issues was establishing creative agency fees.
Most of us in the industry adhere to the philosophy of not wanting money get in the way of a relationship, but the reality is, money, or marketing agency fees, often times becomes a bone of contention that can erode the issue of trust. Generally speaking, there are three ways creative agency fees are structured—monthly retainer, project fees, or hourly charges. Each has its own set of pros and cons.
Many agencies prefer the monthly retainer method because it represents consistent payment, eliminates the need for cumbersome administration billing, and positions the relationship as more stable than a project or hourly fee. Clients like it because it makes it easy to budget for annualized creative agency fees and provides what some consider a “carte blanche” environment for whatever creative needs arise.
When an agency feels that they’ve been saddled with significantly more work than expected, or the client feels the agency isn’t doing enough to earn their keep, a dispute can emerge. How this happens can be the result of several scenarios. From the agency perspective, clients who give little or poor direction up front can result in many rounds of time-consuming revisions down the road. Another culprit is when the person who is providing the direction is not the final decision-maker. The direction they give, from which the agency gets their marching orders, may not reflect what the actual final decision-maker wants. And finally, during the normal process of creative work development, when the client makes wholesale changes in direction after much work has been completed, or just being on different pages creatively can put a crimp in the relationship, which can exacerbate the problems associated with creative agency fees.
Avoiding problems down the road starts with establishing a definitive agreement that spells out what is included within the marketing agency fees, keeping accurate records of agency time (and updating the client when they are approaching a threshold that could result in additional fees), and making sure that the “real” decision-maker is involved along the way.