I have a lot of experience working for agencies. Over 10 years’ worth, in fact. I have a lot of thoughts about the business — the people, the clients, the work, etc. Something I’ve thought a lot about recently is what they sell to their clients.

Agencies don’t sell a product, typically, but rather hours. Sure there is often a website, a campaign, a mobile app that is produced and handed over, governed by a contract that specifies what deliverables will be created. But this is a poor substitution of what the client is ultimately looking for, and the agency is hoping to deliver.

"I was surprised at how little value we provided clients"

A while back, I grabbed drinks with an old friend and former boss who had gone client side after a long and successful career working and leading agencies. He had been in his new job for over a year. I too had gone client side recently and we were catching up and talking about the good, the bad, the same, the different of working in-house.

“When you’re in-house, what you do needs to demonstrate value. It has to be measurable.” This was what my friend said to me.

“I was surprised at how little valued we provided clients.”

His point was that for all the hard work we as consultants do — and we do work hard — the result for the client doesn’t provide for them the maximum value they need.

The problem isn’t talent. Some of the smartest people I’ve met work at agencies. And they can design and build just about anything you can imagine. The problem, I believe, is in what the agency and client company agree to do.

Rather, the issue is how agencies price and sell their services. The conversation about the value of a good design is a hard one. It asks client companies to compare two things (a well designed site and a poorly designed site) and appreciate the approximate values of each. That’s actually a hard comparison to make. How do you value good design? Can you easily quantify the improvement to a business of the “better” design weighed against the added time and money to build it? Especially when at the end of the day what you’re talking about are two sites that are (theoretically) functionally similar.

There’s a whole post to be written about properly valuing good design (and properly executing it). Suffice it to say, it’s hard to properly contextualize for a client the method and approach that allows one to craft truly tailored digital solutions.

How does this apply to agencies selling their services? We try to make the foreign concept relatable. We substitute what we’re trying to sell — a unique business solution to specific business problem — into something much easier to understand: a bucket of hours.

Client Company A comes to Agency X looking for a mobile app. Perhaps discussion is had on whether a mobile app is the right solution for Company A, but rarely that happens, and at the end of it all, Company A is still going to insist on building a mobile app. So Agency X, relying on their experience in building mobile apps in the past, puts together an estimate. This estimate assumes the specific roles needed to design and build and test the app, assumes the total number of hours everyone will need, multiplies that hour total by some arrived-at rate, and you have your project cost.

From there the estimate is debated. Internally account people argue Company A will be willing to spend that or won’t, and the number is massaged. Then Company A considers that estimate and pushes back and the number is massaged again.

To ensure that bucket of hours is being properly spent, specific deliverables are agreed to. Think of them as mileposts along the journey of the project. User journeys (number of journeys specified ahead of time) that Company A will approve. Wireframes (total max number of wireframes specified ahead of time) detailing the site that Company A will approve. Delivered code for the mobile app that will meet specific agreed-to functional capabilities.

The contract becomes the thing that both Company A and Agency X use for leverage. Company A uses it to ensure they’re getting what was agreed to ahead of time. Agency X uses it to ensure they’re not on the hook for work that wasn’t agreed to and therefore unpaid.

What’s missing in all of that is actually discovering and building what Company A really needs to solve the specific business problem/challenge. There’s no ability to course-correct/change approach if in diving into the work data/user research shows a different solution/strategy is needed.

That is not a failure of imagination or expertise, but the reality of solving problems. Company A’s initial diagnosis of their business challenge is rarely correct. The proposed solution — before any work is done — by Agency X rarely hits the necessary mark. It is only in doing the work, testing hypotheses, learning, experimenting, that the proper solution to a problem is revealed. But that exploration is not available to client and agency in a typical working arrangement.

This is how you get to the “so little value” provided to a company.

So what’s the solution? That’s a hard question to answer. More focus on how to solve a problem as opposed to a pre-determined solution is necessary. Agencies need to sell the flexibility of solving the problem. It’s in a company’s best interest for the solution to evolve as the work is undertaken so that an illusive and moving target can be hit. Most important, trust needs to be built between client company and agency so that both sides don’t fear being taken advantage of.

New agencies are starting to reject the old model detailed above and positioning themselves differently. They’re focused on selling design thinking — the method of discovering and addressing the problem, rather than selling a bucket of hours and a specific solution.

They look to partner with the client company, working side by side in doing the hard work of determining what is needed. Rather than sell big buckets of hours — projects that take months/years — they offer shorter engagements, usually a week or several at a time. This is a much more palatable entry way to a project, and allows both sides the flexibility to shift as learned insights suggest. Both sides continually learn, better understand the problem. Most valuable to the client company — they learn the ways of design thinking and are in better position to address other challenges that arise within their business.

This is a better value proposition for all parties. Ultimately everyone involved wants to build the better and right thing. Ensuring your selling — or buying — a process that allows for learning and course-correcting the solution is the best path to achieving that outcome.