Getting Paid What You’re Worth

In an age of disappearing commissions and pressures to lower costs, agencies are working hard to preserve or improve their margins. Agencies are dissatisfied with labor-based compensation systems because it puts the agency cost structure under a microscope. Clients are unhappy with the system because they often pay for hours without getting results. The truth is, a cost-based approach is wrong for both sides. By focusing on time and cost instead of value and effectiveness, neither party achieves what it wants from the relationship.

No other professional service business gives away it’s most valuable product the way agencies do. Agencies are in the ideas business, yet base their compensation structures as though they are in the production business. This presentation looks at how to separate ideation from execution in the agency business model, and how and why to charge differently for services that provide different levels of value.

In this thought-provoking presentation, Ignition’s Tim Williams shows how agencies can begin to make the shift from activity-based costing to value-based pricing. Using examples from around the country, the presentation explores:

• Making value-based pricing a core competency of the agency.
• Key factors that must be considered when setting a value-based price.
• Structuring a compensation agreement based on the value of outputs rather than the cost of inputs.
• How to identify and prioritize key metrics of success.
• Leading-edge models that agencies can use to align the economic interests of the client with the interests of the agency.

The central premise is simple: the more agencies can tie compensation to benefits and results rather than costs and activities, the more they’ll be able to reverse the trend of being evaluated by procurement agents who use the same criteria for selecting an agency as buying office supplies.

This presentation looks at some of the forward-thinking agencies that are leading the charge in this area and see how they apply as much creativity to pricing as they do to client business.

Click here to download the article: A New Vision for Value-Based Compensation by Tim Williams and Ron Baker.

This seminar is designed exclusively for senior level leaders and managers of advertising agencies and other marketing communications firms.

Tim Williams is founder of Ignition, a leading consultancy devoted to helping marketing communications firms create and capture more value.

In his role as author, teacher, and consultant, Tim works with marketing organizations throughout the U.S. and abroad. He is a speaker and workshop leader for organizations such as the American Association of Advertising Agencies, American Advertising Federation, Association of National Advertisers, American Marketing Association, CBS Television, National Public Radio, The One Club, numerous agency networks, and individual agencies ranging from large multinationals to small independents.

Tim is the former president of R&R Partners (creators of the “What happens here stays here” campaign for Las Vegas), and has was founder of his own firm, now known as Richter 7. During his experience at agencies like Ogilvy & Mather in New York and elsewhere, Tim was responsible for such brands as COMPAQ, CBS Television, Jeep, IBM, and American Express.

As a recognized thought leader in the advertising and marketing business, Tim contributes to leading trade and business magazines including Advertising Age, Adweek, Communication Arts, Admap, Marketing News, and The Advertiser.

He is author of the book “Take a Stand for Your Brand: Building a Great Agency Brand from the Inside Out”, recognized as the standard for agency brand development.