Industry Info

Debate & Discuss: Design Agency Selection and Compensation

Posted: June 6, 2015 by
Linda Casey

In the May 2015 issue, Package Design explores different methods for evaluating design firms and compensating them for their work, from pay for performance to the controversial subject of spec work.

 

The Expert: Richard Williams

Founder and chairman of Williams Murray Hamm

 

How do you define spec work?

I define speculative work as being work for which one is not being paid. So, it’s free pitching, it’s creating projects to illustrate that a client may have problems they don’t know about, or it’s doing free work to win a piece of business that one would not normally win.

In my experience, you never get back your investment—even if you win the business.

 

How can agencies bid for jobs where a brand is asking for a test project?

I’m not an advocate of test projects. I think better due diligence on the part of the brand owners and agencies should lead them to the right partnership. The sort of questions clients should be asking are:

▪ Whom else have they worked with, and what do they have to say about this agency?

▪ Could we do business with them? Do we like or at the very least, respect them?

▪ Does the work the agency does fit what we think we need?

Agencies should be asking:

▪ What’s the brand’s record working with design agencies?

▪ Who do they work with, and why are they considering working with us?

If they’re pitching us against other agencies, who are those agencies and who has the inside track and why are we doing this? I also recommend reading Blair Enn’s book, The Win Without Pitching Manifesto. It will change the way brands perceive pitches and agencies pursue business.

What’s the problem we’re being asked to solve, and has the client the vision to buy our solutions?

Many years ago, before the Internet really took off, we were invited to meet a large UK foods business. After a two-hour drive, we took a look at the display in the lobby and turned straight back. We knew this would not be a relationship to cherish. Funnily enough, 10 years later, we worked very successfully with this company’s U.S. headquarters to help change its design culture.

Can a performance-based payment plan help an agency deliver more revenue for both the design firm and the brand?

I’d be on a beach in the Bahamas now on the money I’d have made from a performance based relationship—if we could make them work. The trouble is, it is extremely hard to isolate the design element of a brand’s success. It’s tough to discount the effect of advertising and of social media.

You simply can’t make those kinds of arrangements with a global business; the barriers are massive. However, startups that are willing to trade equity for design are prime candidates. We’ve done it only once in WMH’s lifetime and it worked, but it does involve quite a lot of legal wrangling.

 

What needs to happen to make a pay-for-performance scenario work well?

Two willing parties, cheap legal advice and a client that isn’t supporting the brand with advertising. If the design firm can handle the design and social media then there’s a chance an agreement can be achieved.

We probably should do it more often. Thanks for reminding me!

 

Can spec work enable agencies to break into new markets?

It’ll take you to the insolvency market. You’re putting your best brains onto something you’re not being paid for and taking your eye off your existing clients, who are paying you full whack.

One approach that works for us is to identify the problems and opportunities, and then illustrate how you’ve solved them on another project. You’re not showing speculative work, but you are opening up a conversation that shows how you think, even if you’ve not worked in that specific category. I think there’s a lot to be said in bringing in agencies that have not worked in a category before: They don’t have preconceived ideas about it.

 

What is a good alternative to spec work for agencies wanting to prove themselves in a new market?

Find a potential client that is willing to take a leap of faith. We won the redesign of Barclays Bank’s identity through a marketing director who loved the work we’d done on a loaf of bread. In fact that loaf (Hovis) also won us the world’s most successful agri-chemicals business that became a client for eight years.

 

Is there anything you would like to add?

When we started WMH nearly 20 years ago, we drew up a list of categories we wanted to work in. In the first three years of the business, we worked in all of them and we never did a single piece of speculative work. We wrote articles and gave talks that caught the eye of potential clients and we never deviated from our position of being a business that was for the “kickers and denters” in clients—the people who wanted to make change.

We also did a lot of work for small, entrepreneur led businesses that made noise in the market. We won design effectiveness awards for brand work like what we did for Clipper Teas. This award-winning work was envied by marketers in global client firms and led them to us.