Welcome back! In part 1 of this 2-part series on managing clients, we talked about one of the most common problems agency owners face - managing clients expectations when they keep asking for more. We went over how having a rock-solid service level agreement in place is a huge boon, as it gives you an easy way to handle delivering extras and unforeseen changes.
In this week’s article, we’re going to dive deeper into the things that influence your client’s expectations, and what you can do manage them. Even before you first create that service level agreement, you have the chance to influence how they perceive you. And once you’re working together, you need to ensure that everyone on your team is on board with your methods.
Let’s turn first to how you win their business.
Sell Based on Value, Not Time
If you’ve read some of my other articles, you might already know that I’m a big proponent of value selling & pricing. Rather than figuring out how much time something is going to take you and then quoting prospects based on this time, you should instead figure out how much value (outcomes and impact) your work can create for them and price accordingly.
Getting crystal clear on the value your work brings to the table will allow you to charge higher prices, win better business, and build better relationships. Think about it - when your customers understand you’re solving problems for them that are saving them (or making them) far more money than it costs to keep you on retainer, they’ll be delighted with your arrangement.
Learning to pitch & sell based on value (and not just time) is a game-changing shift for your agency. If you’d like to learn about it in more detail, you can download my free Value Selling eBook here.
We won’t examine the topic in exhaustive detail here - just the bits that are most pertinent to our discussion about how to manage demanding clients.
First things first…
Selling Commodities is a Difficult Business
It’s normal to price based on time. Particularly for internal control purposes, it’s good to have an idea of how long a particular project is going to take, or how many man hours will be required to get something over the line. However, when it comes to pitching, basing your price on time (and not value) is a critical mistake.
Commodities do not command large prices. When the fuel gauge in your car is teetering towards empty, you probably don’t seek out the station that charges twice the price of all its competitors. You probably don’t like paying a premium for your phone plan or business cards.
All of these are commodities. We judge commodities based on price, nothing more. And if your clients should view the work you do as a commodity, then you’ll be judged relative to other agencies in your industry. If competitor X can get the job done in half the time, they’ll seem more attractive. Even if your work is better, more tailored to their needs, or you’re far more reliable… when you pitch solely based on time, you’ll be trapped in a race to the bottom.
When you give a time breakdown to clients upfront as part of your pitch, you leave yourself open to the extremely common question of “why will x take so long?” - and when faced with this criticism, you’ll often react by discounting your price, which starts you off on the wrong foot and sets the tone for the relationship.
The real issue with pitching based on price is symptomatic of the underlying issue... focusing on outputs instead of outcomes.
Focus on Outcomes, Not Outputs
An agency that wins in the long-term is one that delivers great work to clients. Reputation is invaluable for client-facing businesses, and a reputation for doing great work is one of the most powerful assets you can build as an agency owner.
But to deliver outstanding results to your clients, you have to frame your relationship in terms of outcomes, not outputs.
The outcome is what your client is really buying. The output is what they use to get there.
Think of it like this:
- A content marketing firm’s outputs might be blog articles, social media posts and general strategy consulting sessions. The outcomes that their clients are chasing are more engaged customers, more leads, more profitable relationships with clients etc.
- A PR firm’s outputs include press releases, features and media coverage articles. The outcome their clients want is to have a better public image and increase market awareness.
- A branding consultancy might deliver a new logo and brand identity documentation to their client - but what that client really wants is a refreshed brand, one that lets them capture more market share than before.
“Outputs” are commoditisable. Plenty of other agencies can deliver the same outputs you can. But outcomes are harder to copy. If you build your business on helping clients achieve their outcomes, you’ll have stronger and longer-term relationships.
If they want to expand the scope of your project beyond what you’ve already agreed on, you can politely remind them that you’ve already decided on a direction for the project. If something is to be added, something else must be removed - or else an additional fee will have to be agreed for the extra work.
If you want to read more about value pricing & selling then download my FREE guide here:
Three Quick Tips To Help You Deal With Demanding Clients
I’d like to finish off this article by giving you three quick tips that I’ve seen work wonders in agencies of all shapes and sizes. These practices are distilled from my years of experience coaching 250+ agencies in various sectors, so don’t be fooled by their simplicity.
- Agree to a contingency fee with clients upfront. Have them set aside an additional 10% of your retainer fee for extra work that might arise during the period. If you don’t do anything extra, you don’t charge them for it - but if you do, you’ll easily be able to get the payment for the additional work and won’t feel awkward asking for it.
- Make sure your staff are well-trained in handling client requests. Junior members in particular need to be watched, as they’ll often conflate customer satisfaction with just saying yes to everything that’s asked of them. This can cause problems for your agency as you scale, so don’t forget to ensure that everyone is on board with your way of doing things.
- Furthermore, make sure junior staff members don’t respond to clients too quickly! Ensure they’re getting the level of service they’re paying for. Don’t respond to their emails within an hour unless your service level agreement entitles them to this privilege (TURN OFF YOUR EMAIL DIALOGUE BOX!). Doing this is counter-intuitive for some, but will help to prevent unreasonable client expectations in the long run.
And finally… if you’ve done all the above and clients are still asking too much of you, it might be time to consider whether you’re a good fit to work together. Working with your ideal clients is crucial to running a stress-free business in the long run.
The filtering process starts back when you’re first considering them as a client, so if you gut tells you they are not a good fit - listen to it and move on to the next prospect.
In the eyes of your ideal clients, you’ll be seen as a partner, not just a supplier. In the eyes of the non-ideal ones, you’re a supplier - a provider of a commodity, there to be used as necessary. Seek out those clients who see you as a partner.
For more information on how you can determine who your ideal client is, you can get a free copy of my Customer Persona Guide here.
In this two-part series, I’ve addressed one of the most common questions I’m asked in my coaching practice: what do you do with clients who keep asking for more?
These kinds of clients are often unclear about what to expect from your service because you haven’t adequately explained your terms upfront. To counter this, you can create a rock-solid service agreement at the start of your relationship. Include specifics as to the deliverables they’ll get each month, charges applicable for extras, outcomes you’re working towards, etc.
Another reason why clients seem unreasonably demanding is that you sell based on outputs, not outcomes. When you frame your work in terms of how much it costs or how long it will take, you make it easy to compare your proposal to that of many other agencies.
If you pitch based on the value you bring to the table instead, you’ll have less issues with clients demanding more from you (for no extra pay). When you’re both clear on the outcomes your work will deliver on, clients are less likely to request incongruent changes or take up your time with other requests.
Finally, it’s simply good business sense to do certain things (e.g. agree a contingency fee upfront, train your staff to handle clients correctly, and enforce response times to manage expectations). These tips can have a significant impact on your business if implemented, so don’t hesitate to give them a go.
If you want to learn more about improving your client & account management, then sign up for my FREE masterclass: