We recently heard of a bad situation that might have been avoided if more attention had been paid to better communication.

An associate was called in by their client’s marketing manager to help rescue a project that had gone far over budget but still required design revisions and print production to bring the piece to completion.

The design studio that was hired to produce the client’s promotional brochure had agreed to a budget of $1,500. Over the course of 4 week’s production the client’s marketing manager had reviewed design proposals and pre-press proofs.

In addition, the piece had been through client revisions that included minor modifications to the design along with copy revisions. At this point the marketing manager requested a breakdown of costs-to-date from the studio.

The studio was slow to respond. When the request was repeated, the studio answered by submitting an invoice for $7,000 – over budget by a whopping $5,500! In addition, some of the client’s requested revisions had not been incorporated into the artwork, and no breakdown of fees-for-service was provided.

This manager’s predicament could have been avoided. The interests of both the client and the studio could have been protected if the studio had followed a few professional procedures including:

• Submitting a contract to be signed outlining the terms and conditions under which the work will be completed. This should specify how cost increases will be communicated. Verbal agreements leave both parties at risk. See our sample contract here
• Providing an estimate detailing clearly what the deliverables are that includes a spreadsheet itemizing the estimated time for each task, and the rate being billed. This can be checked against interim and final invoices, and referenced against any costs that run over budget
• Providing a schedule for delivery and a clear accounting – on an ongoing basis – of project progress and budget to date, and notice if current or proposed work will exceed budget. For a studio, project estimating and project management go hand-in-hand and, when it comes to invoicing, no one likes surprises

The situation in this case remains unresolved. Regardless of the outcome, it will probably cost both parties: the marketing manager may need to deal with unexpected expenses; the design studio has likely lost a client.

Clients expect designers to create good visual design that communicates with their audiences, but they should also expect them to be good communicators at all levels.

That is one way that trust is earned and relationships are built; how one-time customers become long-term clients.

It’s not always easy to quantify the value of long-term relationships in business, but there’s no doubt there are benefits. We’ll look at these in our next blog.

There are many reasons to be upfront about the pricing of your services. It will, for instance, let potential clients compare your services with other providers based on price, as well as other factors such as qualifications, services and suitability. And your clients will appreciate an accurately quoted price so that their project will be completed within budget. Being upfront with your prices should inspire confidence in your clients.

Our business associate and friend, Brent Kobayashi, who runs Toronto digital marketing agency Kobayashi Online discusses this topic in great depth in one of his blog posts, “Hiding your prices – Don’t do it!”. Please check it out – it will be worthwhile, we promise.

In our post, we’d like to outline a few techniques that we use to provide accurate and transparent price quotes:

· Create an itemized list of services provided. Include a spreadsheet itemizing the estimated time for each task, and the rate being billed. For instance, if you’re billing a client for design work, you can break down that task into the time spent doing procedures such as personal consultation, art direction, design and layout, and client revisions. This will give your client a sense of transparency to the project, letting them know the amount and nature of the work you are providing them.

The itemized list shows the client the tasks and associated costs at a glance, as well as giving the client and supplier a document that effectively tracks costs as the project progresses. If the scope of the job changes or there are extensive changes, the client can see where those costs are incurred and approve the additional costs before the supplier proceeds.

And an itemized list will also allow your potential client to properly compare your design and marketing proposal with other vendors.

· Always come in on budget for the items specified. Coming in on budget is dependent on creating accurate initial estimates, and establishing the project’s scope. To provide an accurate estimate, we suggest gathering as much information as you can about the client’s marketing needs and expectations before the work begins. This will help your team cover all the bases both in quoting and guiding you towards the best decisions for your project.

Estimating design and marketing projects well is one of our strengths at Finesilver. The initial estimate can determine whether the project budget is realistic and allows for an effective end product, and we believe it would be unrealistic and misleading to submit a firm quote at the outset when the scope of a project has not been clearly established.

· Be transparent with what services you offer, and which you don’t. Your client may need services beyond your company’s capabilities. In these cases, you may refer them to trusted partner companies rather than try to hide the size and scope of your company. In fact, clients could very well appreciate your expert recommendation of a company that specializes in their particular need.

Transparency and ethics is absolutely at the core of business today, and providing clear and upfront pricing is central to keeping these high standards.

Let us know your experiences with pricing estimates in the comments. And please drop us a line if you have any questions. We will get back to you!