Burying the Billable Hour: Getting Paid What You’re Worth
A workshop for marketing communications professionals that shows how agencies can be compensated for the value they create rather than the hours they work.
About this workshop
At time when marketers are scrambling to lower costs, agencies are working hard to preserve or improve their margins. Many agencies are dissatisfied with hourly-based compensation systems because it puts their cost structure under a microscope. Clients are unhappy with the system because they often pay for hours without getting results. The truth is a time-based approach is wrong for both sides. By focusing on hours and costs instead of value and effectiveness, neither party achieves what it wants from the relationship.
In this thought-provoking workshop, Ignition’s Tim Williams shows how agencies can make the shift from activity-based costing to value-based pricing. Using examples from around the world, Tim explores models that align the economic interests of the client with the interests of the agency, including:
1. How agencies create value and why they should get paid for it
- What agencies really sell, and what clients really buy
- The financial impact of agency contributions
- Selling your value instead of your costs
2. Moving from cost to value
- The chronic disadvantages of cost-based pricing
- Trading a focus on internal measures and costs for a focus on external measures and value
- Why the current client-driven system is not in the client’s best interests
3. The economics of value in agency-client relationships
- The subjective nature of value (not a calculation, but a perception)
- How to ascertain value in a client relationship
- Aligning the economic incentives of agency and client
4. The principles and practices of value pricing
- Selecting the profit-optimizing price for each engagement or service
- Why different prices for different clients at different times
- Dealing with client price psychology and how to overcome pricing objections
5. Why and how to put “Scope of Value” ahead of “Scope of Work”
- Tools for clarifying Scope of Value
- Identifying the drivers of brand success
- Evaluating the value of outputs vs. the cost of inputs
6. Creativity in compensation
- Applying agency creativity to pricing
- Separating the value of ideation and execution (“Magic” and “Logic)
- How agencies around the world are experimenting with pricing and compensation strategies
7. How to set a price based on value (vs. an estimate based on cost)
- The key factors to consider when setting a value-based price
- The difference between short- and long-term value
- The three basic forms of value pricing: fixed, usage, and results
8. The role of intellectual property in agency compensation
- Why good and bad ideas shouldn’t have the same value
- Charging differently for the creation of the idea and the value of the idea
- Why and how IP ownership affects pricing in value-based agreements
9. Developing outcome-based compensation agreements
- Selecting the right kind of client for an outcome-based agreement
- Developing a value scorecard
- Transparency of data and information vs. transparency of costs and profits
10. Agency self-confidence as a precursor to success
- You will never be paid more than you think you’re worth
- Why agencies are ultimately a client’s most important business partnership
- The future for creative services is to apply creativity to compensation
The central premise of value-based compensation is simple: the more marketing firms can tie compensation to benefits and outcomes rather than costs and time, the more they’ll be able to capture more of the considerable value they create for their clients. This workshop looks at some of the forward-thinking firms that are leading the way in this area and shows how they apply as much creativity to pricing as they do to client business.
View a few slides from the workshop here:
Who this workshop is for
This workshop is designed for experienced executives of marketing communications firms, especially leaders, managers, and department heads.
About the instructor
The presenter is Tim Williams, founder of Ignition Consulting Group, America’s leading consultancy devoted to helping marketing communications firms create and capture more value. Tim is a frequent speaker and presenter for major industry associations, agency networks, universities, and business conferences in North America and abroad. As a recognized thought leader in the advertising and marketing business, Tim has been interviewed and quoted by The New York Times, Wall Street Journal, The Economist, The Guardian, Toronto Globe & Mail, Bloomberg News, Japan’s Nikkei News, and other business and marketing from Europe to Asia. He is a frequent contributor to leading trade and business publications including Advertising Age, Adweek, Communication Arts, Campaign, 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 ranked by Amazon as one of the top ten books on brand building. His newest book is Positioning for Professionals: How Professional Knowledge Firms Can Differentiate Their Way to Success.
What others are saying
“Tim is a fantastic speaker who knows the industry inside-out. This Ignition seminar provided us with really interesting alternatives for approaching the often complex issue of compensation in an environment of diminishing profit margins.” Marcos da Gama, Double You, Barcelona, Spain
“To say that Ignition’s seminar re-energized me is an understatement. I have been raving about the change in approach you preached with our staff here and they have been eager to look into how we can incorporate this approach in our work with clients.” Antonio Garza, Anderson Marketing Group
“Phenomenal! I was impressed with Tim Williams’ presentation, experience and obvious grasp of the subject. About an hour into it, I knew that I'd made the right decision to attend.” G. Robert Bishop, writing in The Marketing Recruiter
“Loved this seminar, as did everyone I know who attended. Fantastic work, thank you!” Via Twitter
“This seminar was the best time I’ve spent for work in a while. Tremendously helpful, encouraging, reassuring, and inspiring.” Via Twitter
How to arrange for this workshop
Burying the Billable Hour: Getting Paid What You’re Worth is available in three versions: 90-minute presentation, half-day workshop, and full-day seminar.
For details and pricing, please contact us at info@ignitiongroup.com.
Questions or feedback? Contact us.
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