Successful agency-client relationships balance value. The agency must give sufficient value that the client feels satisfied, while the agency must receive sufficient value to feel adequately rewarded.
It’s not always an easy balance to strike.
I’ll explore this idea more a bit later in this week’s newsletter, but first let’s take a look at the latest from SAGA and what Jen has rounded up for us this week.
— Chip Griffin, SAGA Founder
Latest from SAGA
STAY IN THE TRENCHES FOR THE FORESEEABLE FUTURE — You trust your team and you do your best not to micromanage, so the advice to learn a little AI and then delegate it to them makes sense, right? Nope, not this time. In the latest Agency Leadership Podcast, Chip and Gini break down the reasons why you shouldn’t just hand over AI to your team the way you do other work. Watch/listen to Agency owners need to get their hands dirty with AI.
Jen’s Weekly Roundup
Here’s what caught my eye this week:
AI DOESN’T MAKE THE CALL, IT JUST HIDES THAT NO ONE DID — On The Innovative Agency, guest Russel Dubree argues AI isn’t the threat agencies fear, it’s a magnifier that exposes weak positioning instead of creating new problems. For Immediate Release discusses an example of this with a company that let AI reject applicants who graduated before 2010 for lacking “youthful energy.” Oops. Blair Enns at Win Without Pitching offers his new AI Contribution Scale, a voluntary disclosure for how much AI touched a piece of writing, which watermarking can’t address.
THE PART AI CAN’T DO — Gini at Spin Sucks closes an eight week arc on how to build trust in the age of AI: it’s a supply chain with stations you can’t skip. The shortcuts of automating, fabricating, and disclosing it keep failing publicly. David C. Baker makes a similar point about AI’s writing, saying it is an arrangement of letters stripped of humanity. Brad Farris looks at it from the practical side. AI is good at the routine donkey work firms have billed by the hour for years, but you still have valuable expertise. You just need to figure out how to charge for it.
LOOKING SUCCESSFUL AND BEING HEALTHY ARE VERY DIFFERENT — On Agency Bytes, Lynn Juang tells Steve Guberman a business can look great from outside while it’s held together with tape on the inside, which often shows up first as an owner who’s lost touch with being an employee. Eric Brown talks about the financial side on the Agency Profit Podcast, saying most agencies are built around a craft skill, not a growth discipline, so revenue goes up while their margin goes down.
A SOLO PRACTITIONER CAN OUTWORK AN AGENCY — Karen and Michelle at That Solo Life discuss the case study of the summer. Two independent PR pros, no junior staff, no agency overhead, delivered 170,000 attendees, international press, features, and daily coverage of the World Cup. In case you were in doubt about whether solos and small agencies can compete with larger firms, here’s your proof.
KNOW WHAT MAKES YOU SELLABLE BEFORE YOU NEED TO BE — David C. Baker and Blair Enns spend an episode of 2Bobs on what a buyer actually asks. It turns out that too much profitability can be a problem, and profitability isn’t always a requirement.
— Jen Griffin, SAGA Community Manager
The Value Challenge
How do you know if your agency is giving and receiving the right level of value when serving a client?
Unfortunately, there’s no easy answer. So let’s look at some of the things that you should consider.
Like so many things in business or in life, strong communication helps you achieve better results.
You need to really understand what the client wants from the relationship. That’s the thinking behind the first question I always encourage agencies to ask in their first conversation with a prospect: “what brought us here today?” (and then probe until you uncover the real reason they decided to voluntarily endure what amounts to a sales pitch).
But now you need to figure out how to deliver on that need — without needlessly over-delivering.
Often, a lack of confidence drives us to give the client things they don’t truly value. It’s a bit like those holiday food baskets we receive, which contain a couple of nice treats mixed with all sorts of filler items.
Other times, we might not listen well enough and miss delivering something the client would truly value.
We need to keep in mind that what the client values may change over time, so what we deliver should evolve as well. That’s one of the real virtues behind the quarterly planning process my Agency Leadership Podcast co-host Gini Dietrich utilizes with her clients.
Taking the time to add what works and subtract what doesn’t makes for a more sustainable relationship for both sides.
And that both sides idea is critically important.
You need to reap the rewards of the relationship yourself.
That starts with ensuring that you are being fairly compensated for your work. It’s why I encourage owners to really understand their costs (primarily in time inputs from their team members) to judge the profitability of each client and project.
But there are other rewards that you should be receiving in return. You need to judge the fit of the client, how well they treat you and your team, what you can learn from the engagement, and what doors it may open for you in the future.
None of those things matter, though, if you don’t get the profitability piece right.
If you see the balance shift in an uncomfortable direction, figure out how to fix it — or have an open and honest conversation with the client to get you back to a good spot.
It’s a real challenge to balance value delivery and value receipt as an agency when working with client, but doing that well will drive meaningful success.
