“Deer in the headlights” is how David C. Baker1 describes what happens when a project scope gets out of hand for ad agencies. It’s hard to know what to do except stare straight ahead in disbelief.
He asks the question:
When underestimating the scope… is there an easier way to lose money (besides buying Twitter)?
The well-known author, keynote, and business advisor is a leading authority on positioning for ad agencies and he describes five popular ways to “stay out of the headlights”.
How to Scope, How to Cope:
- Overprice It
Some clients want a fixed price. Which, of course, is a pipe dream we could never accurately quote. Marketing is about strategy, creativity, discovery, and ongoing solutions. With metrics and evolution. The only way to nail that is to overprice it. Competitors love it when that happens.
- Change Orders
Instead of aiming high, aim low, and then throw on extra charges and change orders. In the 1980s those small quarter-ton pick-up trucks got really popular, and dealers sold them without “bumpers”… tacking them on at an extra cost. But according to the National Highway Transportation Safety Administration, that was not really an “option.” Bumpers are mandatory. Tricks like that work once, though.
- 60-page Proposal
Leave no stone unturned by creating a lengthy piece of uncompensated work that explains and accounts for every possibility in The World’s Foremost Document on Scope. The agency will be happy with it. And the client will be happy with it. If the client ever bites on the job in the first place. We lose way more RFPs than we win, scope or not. Proceed with caution on the freebies.
- Switch to “Time & Materials”
This works if there is a LOT of trust already built up in the relationship. But there are two additional hooks involved… 1) this approach coincides with “doing whatever it takes” so it can easily get a project off track, or get a budget off track. And 2) agencies lose out on the opportunity to value price.
- Sell a Paid Road-mapping Exercise
This nails the scope. It’s a unique, niche-agency offering that helps the client. The agency is reasonably compensated for it. And the project starts and stops on the right foot. Formalize it, brand it, and sell it. It’ll add even more to the industry intelligence that drew the client to the agency in the first place.
Consider the case of the next SaaS or web development project on the agency’s plate. It’ll be hard to scope. For one, development is done in code. It’s not visual like running a stack of brochures off a printing press. And second, it’s an art, not a science… good creative work takes time and there are unknowns (More buttons! More pages! More data!) that get solved at every turn. Doing it right is a good thing.
Bottom line, it’s hard for an agency to scope every single web-dev project accurately. If every agency had full-tilt DevOps in-house, it would be easier. But that service offering is commonly not on-site. The expertise is not second nature.
But no matter where the operation is focused, a dependable outsource can help create a road-map approach that can help.
Outsources provide subject matter expertise across the board. And they can also accommodate just about any of the approaches mentioned above… road map, change orders, hourly, etc.
For example, an end client may want to just tweak an existing website to build up some base revenue in the short term. Then once some additional revenue has made a difference, come back to the agency later for a richer website that’s based on a richer scope.
So, maybe the hourly approach is OK to start for the smaller project, followed by a road-map approach to take it to the next level in stage two. But however it’s done, the agency can value-price any project knowing in advance that the development cost is a fixed number.
Or if not a fixed number, the agency can charge time and materials but give the client a pretty solid estimate. Or do change orders.
Or do some combo of whatever it takes. With confidence. No blank stare into oncoming traffic.
In the case of the road map, the outsource may not even charge for the scoping process. But the agency can do so with the client.
Look for these planning aids from an outsource partner:
- Scope Refinement
The right outsource partner is thorough, providing subject matter experts, finding the hidden skeletons, refining the scope… creating sales contracts, specs, workflow… it’s all put in writing.
- Clarified Expectations
Calendars and schedules are created by the outsource. Costs are nailed down. The mile markers are clear on what happens when and it is mandatory that the agency and end client are on board.
- Value Opportunities
A strategic partner enables the margin in every project… delivering a rich development plan at a wholesale cost the agency can resell at a premium… one resource, almost no overhead.
Our thanks to Mr. Baker’s ongoing contributions to thought leadership and idea sharing in the agency world. Learn more at DavidcBaker.com.
- D.C. Baker, “Your Five Options When Faced With Unclear Project Scope”, DCB Insights, https://www.davidcbaker.com/your-five-options-when-you-are-faced-with-unclear-project-scope-for-a-client, data pulled Feb 24, 2023.