An Agency CFO's Advice For Launching Strong Agency-Client Relationships

When a company procurement department and an agency CFO understand each other's "must haves," each can accommodate the other and a partnership full of added value results for both organizations.

This saves account services from having to step outside its strengths and get involved in the negotiation process. It can stay focused on serving the client's needs. Forging candor and disclosure during the first conversations also saves back-and-forth time on the phone and email, reducing or eliminating the need to redline or mark up the other’s non-negotiables.

After serving on both the client and agency sides for the last 20 years, I have five essential, early-relationship best practices to help CFOs and procurement departments build stronger partnerships for their respective organizations:

The agency should have a solid and reasonable master service agreement (MSA) to save time and clarify what's important. Middle-market companies, and particularly startups, might not even have a legal department. If your MSA is solid, your client will often just sign it with hardly any red lines. Large and more established companies will have their own MSAs; so, of course you need to scan those for possible red flags / terms that don't work for your agency.



For example, a larger company might want you to have professional liability insurance of $25 million. A mid-sized agency won't necessarily carry that much coverage. When you’re concepting creative at a high level, you might show your client stock photography that they fall in love with, but you need to make clear that they would have to pay for the images if they wanted to use them. Other issues include acceptance criteria – you don’t want to get through three rounds of revisions and have an unexpected influencer decide at the last minute he/she doesn’t like the color palette.

The agency should proactively reach out to and negotiate with procurement early in the process. Begin an open, honest, positive dialogue by asking your partner early on what goal they are trying to hit. If budget is a central issue, show you understand. Don't be afraid to say, "I know you need to show a 15% discount or have our agency be at a certain hourly rate. Let's see how we can get there together."

I try not to bend on fee structure, which is based on value billing and fixed fees rather than an hourly rate. Although, you can say, “This how we prefer to work, but we are open to structuring this another way.” We try to come in with a range that specifies: 1. a “most affordable” option, 2. a mid-range option that details what you can add, and 3. the “Cadillac” scenario that comes in at, or slightly above, your client's budget.

Establish transparency and trust early. This helps to set the tone for a productive and rewarding relationship among all team members, on both sides. The fastest way to dissolve a relationship is to be opaque with each other. There sometimes needs to be an education process in which you show the client how you got to your margin – and that anything less will cause you to operate at a loss. Often times you end up meeting in the middle, sometimes with a blended rate. When you show flexibility in areas that you don’t consider non-negotiable, that helps to establish trust.

Ensure both sides have C-suite-level contacts. The "higher ups" can help to quickly resolve any issues. The CFO can come in and be the bad cop if necessary, or conversely come in and offer that discount that gets things moving. Account services people are good at putting together the written agreement but don’t necessarily want to be the ones who pick up the phone, or meet the client for a face-to-face negotiation.

Once a project or relationship starts, and especially one of the first times the client comes to our office, I try to schedule at least 15 minutes with them to ask how things are going, how the agreement terms are working for them, and whether there’s anything we could be doing to provide better services.

Show appreciation. When I send my first invoice to the company accounts payable person, I start with a note asking if they need it in a certain format, or if they accept ACH information for automatic payments. Then once that invoice is paid, I buy them flowers or a special treat from a local, much-loved establishment (fresh-baked cookies, craft chocolates, etc.). These folks are often the underdogs and unsung heroes of the finance department, and they deserve a tip of the proverbial cap. It’s amazing how often that one little gesture can make that person's day and help keep your invoices from ever getting lost. Or if you call and say, “My invoice seems to be at 45 days,” they say, “Honey, I don’t know how that happened."

Bottom line, all good relationships are forged from candor, honesty and trust. Building these values into how you negotiate, arrive at work agreements, and communicate on the financial level with clients is essential to help you get off on the right foot and maintain a solid partnership.

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