Will agencies need fewer project managers in the future?
How the demise of the billable hour will affect agency roles…
Agencies typically price projects based on number of hours to be spent.Tim Williams is a well known pricing specialist who has been telling agencies why this doesn’t make commercial sense for years.Tim believes agencies need to urgently adopt a new revenue model if they want to survive.Here are a handful of soundbites - but I’d urge you to listen to the full episode here:
- Cost is a calculation, price is a judgement - pricing should be ‘top down’ not ‘bottom up’
- Pricing starts with the question ‘what’s the potential value to our client of what we’re about to do?
- Have a diversified pricing portfolio with varying levels of risk and reward
- We need to define the ‘scope of value’ before we execute on what the client thinks they need – this requires a much better in-depth discussion about what does success look like, what are the success metrics related to this project?
- Always provide options, never a single price, never a yes or no but a choice of ‘yeses’ – 3 is the magic number, sometimes 4
- Adopt the ‘challenger sale’ mindset i.e. push back politely and show your clients a better way….
…. And lots more!Tim shared his predictions for the agency business model of the future.My question was:“If agencies stop charging hours and charge for outputs and outcomes instead, which roles will be most affected?”Tim’s response:"Scope doesn't equal hours, it equals work completed/milestones met/deliverables done. If you're selling products and programmes the project manager's job is greatly simplified and you'll need fewer project managers and the job will be more fulfilling"
