Thursday, February 9, 2012

Contract? Project? Gee, I don't know . . .

Recently, we ran into the "We have a contract with another agency, but I'm not thrilled with them and maybe we'll be able to make other plans when the contract runs out next year" thing in response to a new-business approach.


This comes up a bit, and I'm not suggesting that it's anything other than exactly what it sounds like - someone committed to a relationship. But the number of people who tell you are locked into a long-term contract with an agency they'd like to replace is kind of surprising.

So let's talk a bit about contracts versus projects, shall we? There are positives and negatives for both client and agency to each.

Contracts - The Agency
Certainly from an agency point of view, a long-term contract can be a good thing. Having someone drop by every afternoon with a sack full of twenties would be a good thing too, but that's neither here nor there. Thing is, predictable income is nice.

A termination clause usually guarantees you some income for some period of time while you look for a replacement client if you get fired, too. And if you're working with a retainer, unsolicited thinking and ideas you may generate for the client don't feel like spec work.

Then again, if you're working with a retainer, the volume of work in a given month can exceed your compensation. Not only that it's been my experience that clients get antsy when a month shows up the other way around.

And if you're under contract with a client, you have to be mindful of this relationship as you hunt for new business. Which means you might miss out on an opportunity to trade up.

Contracts - The Client

A contract can be a good thing for a client too. For one thing, there's cost efficiency. Anything you buy in bulk is less expensive than something you buy a-la-cart.

And there is a certain assurance that your agency isn't actively courting or working for your competition if they're under contract to you. (And, of course, having an agency under contract is a ready-made way to turn away agency overtures. Sort of like "we gave at the office".)

On the downside, there's the chance that you'll fall out of love with your agency but you're stuck with them. Maybe a key player that drew you to them has moved on and you find yourself working with Somebody Else.

Of course, there is almost always a termination clause, so if you really hate your agency you can get out of it,. But you'll pay them for a while to either Do Nothing or to Do Something With an Attitude because they just got fired.

Projects - The Agency
And agency can make more money on a project-by-project basis. That cost-efficiency thing works both ways.

And an agency working project-by-project can talk to anybody they want for new business. Free agents.

But a project basis can be a pain in the neck for an agency too. For all intents and purposes, you have to sell yourself over and over to the same client, and you can find yourself without a client any day. So you're continually proving yourself.

Projects - The Client
Working on a project-by-project basis can be good for a client. For one thing, you're not obligated to anything beyond the current project. No termination clauses or anything like that.

And there's that whole thing about your agency having to constantly prove itself. Now, let me say here that most of the people and agencies I know are going to do their best work whether they're on a retainer or not. But maybe you're not working with anybody I know.

On the downside, a project-by-project arrangement can be more expensive. As I said earlier, cost efficiency works both ways.

Clearly I have not provided a single answer here. Or give anybody clear direction as to Which Way To Jump. What works for some clients and agencies might not work as well for those same agencies with other clients.

But I have to say that I think project-by-project is a pretty good way to go. I personally don't see anything wrong with expecting yourself to be sure and bring your "A" game every day.

It can keep you on the edge, but The Edge is often a good thing.

1 comment:

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