Spec Can Be Beaten

The debate between client and design firm over speculative creative rages on. Clients ask for it knowing that despite the opposition to it they are likely to get it. Designers and agencies curse at the request, acquiesce, then curse again at the debasement and the outcome.

One of the challenges with offering creative or guidance on the client’s problem without guarantee of appropriate compensation is what happens after you win. You’ve just given away your highest value offering for free, now how do you look the client in the eye and convince him that your services are worth what you are asking? Even when you win in a spec situation you set the tone for the relationship moving forward in which the client dictates and you respond. You have ceded most of your bargaining power on price negotiation, and you have demonstrated questionable business acumen.

Why Clients Ask
Okay, enough salt in the wound. There is a way out and it begins with an examination of the reason behind the request. What’s driving it is uncertainty and the need for reassurance. The client is afraid of making a mistake in his selection of a firm so he asks the design firm or firms to part with thinking uncompensated as a test of ability to do the job. The firm responds in an attempt to offer this reassurance. The good news is there are other forms of reassurance that can be offered in place of spec creative – better ones. The bad news is that if you’ve followed in the footsteps of most of your peers and have not significantly differentiated your firm from the competition then your alternatives won’t suffice as often as they might.

Everything Begins with Positioning
You can win without pitching, I often say, but you cannot win without pitching without positioning. Your first objective is to have the client see your firm as uniquely qualified to help. He must acknowledge and value your positioning; seeing a very good fit between your expertise and his needs. Clients asking for spec makes sense in a world of commoditized design. If the client cannot tell one design firm from the next; if none of the firms under consideration have been able to separate themselves from the others, then the client will have little alternative to asking for uncompensated thinking as proof of the best fit.

When the client views one firm as uniquely qualified or at least far better suited, then often he will move forward with that firm based on assurances other than spec creative.

Alternatives to Spec
Let’s examine some of these other forms of reassurance.

Phased Engagements & Opt-Out Clauses
Put yourself in the client’s shoes and imagine having a $500,000 design budget that you are charged with awarding to a firm you have never met prior to your review and know little about. You’d be scared too! Even the client’s formal review process is an all-or-nothing gamble. If he makes a mistake he has blown half a million dollars and his budget for the year. Smarter firms will recognize this fear and offer something other than a total-budget engagement as a means to test the fit: a $25,000 first step in the form of a diagnostic (audit) or creative platform development, as an example. Included in these phased engagements are opt-out clauses, where the client can choose to part ways with the agency at the end of the phase. Firms employing this approach replace the fear of a $500,000 mistake with the fear of a $25,000 mistake. Which fear would you rather have?

Money-Back Guarantees
Phased engagements with well-positioned design firms are reassuring. Add in opt-out clauses and they become even more compelling. Now (take a deep breath) consider adding money-back guarantees to the mix. (exhale) Imagine your competitors are pitching spec creative for the $500,000 account and you counter with a $25,000 first step and a guarantee that at the end of the first step, if the client is unhappy with the results or the fit, he can choose to walk away, get his money refunded, and go on with his pitch. Many principals are terrified of offering such a guarantee, but most of them would have spent $25,000 of internal resources on the pitch anyway, and would have developed the work without any client collaboration whatsoever. You risk next to nothing with this approach and gain a significant competitive advantage through the reassurance offered.

Process-Framed Case Studies
“Okay,” says the client in response to your offer of a phased engagement with an opt-out clause and a money-back guarantee, “all this sounds highly reassuring, but if we go down this road with you and it doesn’t work out, then I’m four to six weeks behind. Why else should I believe that yours is the right firm for the job?”

“Because we’ve done this type of work before” is a good answer, but often it’s not good enough. Most of your competitors can show similar type work in their portfolio. But while showing finished work is often inspiring and therefore effective early in the buying cycle, here late in the game when the client is looking for reassurance he is looking a your wonderful portfolio and wondering where the bad work is. Further, he’s wondering how often you produce bad or mediocre work relative to your best work. Unless you show how you routinely and systematically produce great work, your final outcomes (portfolio pieces) will not offer any significant reassurance, and reassurance is what the client needs right now in spades.

You cannot offer this reassurance by talking about how you work (all your competitors are talking about process, at least briefly) you can only do it by showing. (very few do) So take your defined process (that four or five step model on your website with the interlocking circles and the steps that all start with the same letter – usually ‘D’) and frame your case studies around it. When you show three different case studies that all use the same approach to problem solving the client will infer that little variability in process equals little variability in outcomes. Further, you are likely to hear, “This is the first time any design firm has ever showed us how they work.”

I can try to convince you how powerful this tool is, but you need to use it to fully appreciate it. Process-framed case studies are million dollar closing tools.

References
Finally, client references are powerful tools of reassurance that are often employed at the wrong time. The client will be no more inclined to hire you than the minute he hangs up the phone from talking to your best reference. Your reference displaces the doubt in the client’s mind with compelling reasons to hire you. From the moment he hangs up the phone however, doubt seeps back in. Time your references so they are delivered as late as possible, give the client as short a window as possible to check them, and ensure you have a scheduled follow-up call for as soon after he makes those calls as possible. In that call do not forget to ask him to commit!

In summary, if you can tie process-framed case studies to a phased engagement with an opt-out clause and a money-back guarantee you will offer reassurance far beyond what even spec creative can offer, all while preserving your integrity, commanding a price premium, and positioning yourself as the expert in the relationship instead of the order-taker.