28 Jun Why Clients Undervalue Your Agency (And How to Make It Stop)
Written by Jami Oetting
In Lady Windermere’s Fan, one of Oscar Wilde’s characters describes the cynic as someone “who knows the price of everything and the value of nothing.”
It’s fair to call CEOs and CFOs cynics when it comes to their marketing budgets. Rarely do client-side decision makers report to their fellow C-suiters the value your agency provides. In the end, that usually means you aren’t communicating your value well, or strongly, enough.
Either way, it’s a problem when clients are more focused on your invoices than your services.
Nothing Is More Valuable Than Perceived Value
If you reduce a client’s cost per lead and neither your client nor her C-suite knows it — has it really happened? (It’s the same old “does a falling tree make a sound in the forest when you’re not there?” conundrum.) Your clients’ perceived value of your services exerts significant influence on their perception of you and their decision about whether to stay with your agency (or not).
In one famous study out of Stanford University, participants were given two glasses of the same exact wine, except they were told that one glass was from a $5 bottle of wine while the other was from a $45 bottle of wine. Guess which wine they thought tasted better?
It works both ways. While price can be used to boost perceived value, increasing perceived value first can be used to validate higher pricing, expand relationships, or move to (higher) retainer agreements.
Perceived value results from clearly understood and relevant quantifiable and qualitative factors. Fortunately, your agency has serious power to shape how your clients perceive your agency’s value.
Start With the Metrics
Perceived value is much broader than quantifiable ROI, but it’s certainly a necessary part. Especially when it comes to helping your client contacts chat up your value to their C-suite colleagues.
Regular reporting and communication of the tangible benefits your work provides should be standard account management practice. Focus on the metrics that provide the greatest value back to the client.
To do this well, your account managers and agency leadership need to understand each client’s vision of success. There’s a lot of good advice out there to hone in on revenue-based metrics, such as lifetime value and cost of acquisition (ignore the vanity metrics of shares and likes). In general, this is good advice for most clients.
But what about the client whose priority is to show traction through a growing user base? This client is seeking a first round of venture capital funding, so showing proof of concept is far more important than showing paying customers.
Prove your value with metrics. But first make sure they’re the right metrics. They must align with that specific client’s goals and priorities. When you show this sort of genuine and individualized attention, it impacts another factor influencing your perceived value — the overall customer experience your agency provides. View Full Article >>