Agencies and Consultants: Why Rate Integrity Matters Now More Than Ever

Oh, rate integrity. This is a topic that I've spent so much time talking about lately. In addition to my role running The Collective, I'm also doing one-on-one coaching for owners and leaders at agencies and rate integrity is a very hot topic. So let's dive in.

Let's start here: what someone can afford and the value of your time, talents or services are not related. In no other industry, do you get more for less. I can't go to a Tesla dealership and ask for a Tesla, but offer to pay the price of a Ford Focus. I can't go to a restaurant and ask for the steak, but offer to pay the chicken finger price. But somehow in the agency and consultant space, the value of your time, talent and services seems to be up for negotiation. I highly recommend against this. Here's why:

1) When you discount your price, you discount your worth. Price yourself so that 75% of people think you're just a little too expensive and you're probably pricing yourself accurately.

2) It's very hard to increase your rates to your true pricing after you discount. Hard stop.

3) You're probably an overachiever and you don't let people down, so you likely still offer full service even though you're not getting paid full rate. So if you do try to increase the pricing later, the client doesn't feel like they're getting more, they just feel like they're paying more.

4) If you start at a low rate, you either end up sticking with that low rate which isn't a good business and energetic decision or you end up parting ways because of rate. Either way, you look or feel bad.

I know it's hard to turn away business right now, but right now is a moment and I'm pretty sure you're building or have built a long term brand. Making decisions out of scarcity or lack rarely pays off. It's better to turn away a low paying client to maintain your energetic confidence around rate integrity. Your team will probably respect you more for this decision, because oftentimes they're the ones doing the work and trying to squeeze it into a lower retainer. And, most importantly, you preserve that time and energy to put towards finding clients who can pay what you're worth. A short term pull back for a long term jump ahead.

On the list of options, your BEST option is a well-paying client that's a fit for your brand. Your second best option is kindly turning away the offer because it doesn't fit your rate integrity and the third (last resort) option is taking the client at the lower rate. No money is better than bad money and, in the grand picture, low paying money is bad money. It takes more than it gives every time.

So you signed up a low paying client, now what? A few options to consider based on your own unique circumstances:

1) Have a very honest conversation with your client that they are getting special pricing and that the pricing will increase on XX date. Talk about it far enough ahead that it's not a surprise at contract renewal time.

2) Have your invoices reflect the actual price they should be paying and then show the discounted rate. Every month your client should see the actual value of your work, time and talents.

3) Put limits on your work and have a clear conversation with your client about this so they know that the lower rate comes with lower deliverables. Then take personal responsibility for holding to those limits.

There's a common fear that clients will be mad if you don't lower your prices or if you try to increase them over time. Look, COVID is awful. Most people I know have taken a huge financial hit during COVID, me included. We've all had to adjust in our own ways. You're not cold hearted by maintaining rate integrity. When you choose to maintain rate integrity, every client you work with gets the very best of you and you're at your very best when you're being paid what you're worth.