It may seem like an obvious question, but rate cards – what are they for? To give clients a clear and transparent picture of how much you charge, right? On the face of it, that’s what you’d think. And technically that’s true. But perhaps a better way of asking is ‘are rate cards useful?’
To me, the answer is clear – on their own, rate cards are completely useless. Asking for them to be supplied as part of a competitive tender process is a complete waste of time. They mean nothing. Even knowing how your agency calculated the price they gave you isn’t really important. What really matters is the final deliverable and the final budget.
For example, if you’ve got two identical companies, offering exactly the same service, who you know will take exactly the same amount of time to produce a job, but Company A charges 50 euro/hour and Company B charge 100 euro/hour, you’ll obviously go with Company A. It’s a no brainer. And you’ll know you picked the right company for you. So in this example, the rate card is useful.
But how often are two companies really identical? If you’re buying a service, such as a roof repair, for example, you might get close, but design and communication are different. They’re more subjective for a start. There can be completely different levels of strategic input. There’s design and there’s design that’s fit for purpose. Different levels of experience come into play as well. And doing something faster doesn’t mean that it’s better.
Let’s say you’ve got two communication agencies you’ve asked to tender. You see from their rate cards that Agency A charges 50 euro/hour and Agency B charges 100 euro/hour. So you go with Agency A as they’re cheaper. But what if Agency A takes twice as long as Agency B? Both agencies would have been the same price. And what if, because Agency A didn’t do the necessary research, what they have delivered isn’t effective?
Appointing a new agency should be an exciting process. You get to write the brief and see what’s out there. You get to pick the agency you feel is right for you, that understands you and your needs, that you feel can deliver. Of course, you have a budget, but you shouldn’t lead with that – then you’re just making a purchase. You’re entering into a supplier relationship, not a partnership. And partnerships are so much more rewarding – for both agency and client.
I’ve been involved in so many different tenders. And the most rewarding? The ones where price is the last thing that’s talked about.
I’m not suggesting that price isn’t important – of course, it is. It just shouldn’t be the first question you ask.