Monday, April 12, 2010

Meetings, spec work, and a failure to close the deal.

The first quarter of 2010 is almost over and work has been quite steady. A lot of ongoing projects, some new ones for a few upscale clients, freelance agency work (working as an art director), and I’ve had several meetings with potential clients and agencies for (hopefully) more work to come.

Many freelancers despise face-to-face meetings, consider it a waste of time, and I fully understand why. I have traveled across the city and spent hours with a potential client only to have them give me unrealistic budget expectations or end the meeting with the words “we are shopping around”. This can leave a bad taste in your mouth. Especially when you know your rates are far from the cheapest out there.

I however, have always welcomed meetings for they allow me the opportunity to sell my services face-to-face, educate the client, and hopefully close the deal right there on the spot. If you are good at your presentation skills, and can effectively show a potential client why they should use your services, you will hopefully win many more contracts than you lose.

Meetings also allow you the opportunity to see the client’s place of business first-hand, and you can quickly size them up to determine if yours will be a positive working relationship. It’s really no different than a first date. Many of my best clients were those where we clicked immediately upon our first handshake.

I would love to tell you that all of the meetings you will have as a freelancer will end with positive results. But unfortunately, this is far from reality.

This rest of this story is about one that I had last week, which I was really hoping would have turned out far differently than it did.

I met with one medium-sized company that would have been a great client. The type of ongoing work every freelancer typically dreams about. They found me online and invited me to pitch for their business.

I was excited. This company was exactly my target, one that wants agency-style creative but needs the art director and copywriter removed from the building to save all the overhead costs and middle-man fees. This has always been my niche and makes up my typical client base.

I quoted them on the first project – several magazine ads that were going to run nationally in a few prominent magazines.

They wanted concepts (“out of the box” thinking as they put it), mechanicals, copywriting, and they wanted different versions, An ad campaign for their various products under one (company/brand) umbrella.

I know from working with agencies what these ads should cost them.

I consulted several of my pricing guides and many of my past invoices, and presented them with fees lower than my usual rates hoping to get my foot in the door. I figured a client with a lot of ongoing work is worth some sacrifice.

After receiving my quote, they told me my price was higher than all of the other “agencies” I was competing against (none of which I had ever heard of) but they still wanted me to come in and make a live presentation. I took this as a good sign. The sign of a client willing to educate themselves and pay a little more when they are led to understand that quality (and this type of conceptual thinking) comes with a price. Either that, or they were lying about the other competitor’s quotes hoping to get me to slash my fees. Either way, with a ton of boardroom presentation experience under my belt, I was looking forward to the meeting and the chance to close the deal.

A week later, as predicted, I was in a boardroom full of executives explaining my rationale as to why they should hire me. I pointed out my vast experience of working on global brands, I pointed out my lack of unnecessary costs through overhead, and I showed examples of work I had created in the past that reflected their business and marketing needs. I even brought in two pricing guides and showed them what (according to industry standards) their ads should run them compared to my quote, which was on the bottom end of the scale.

A week later, I had heard nothing so I sent a follow up email asking for an update.

I received a reply in which I found out the sad news that I had lost the pitch.

Now, whenever you find out you have lost (be it a client pitch or a job interview) you ALWAYS want to receive an explanation as to why? This allows you the opportunity to plug any holes you may have had in your presentation.

I sent over the email asking what clinched it for the other company?

Here’s the response I received…

“One of the companies we met with brought three different ads they had created and designed for us, and they were actually really good, their price was very reasonable, and seeing their work upfront helped to reassure us that they were very capable of producing a quality product.

So, their work was good. Okay I get that. There are many other very talented people and agencies out there.

Their price was reasonable. Even though they are GIVING their services away for far-below-industry-standard prices, I understand that it’s a dog-eat-dog world and if somebody is willing to work in this industry for next to nothing, it’s their prerogative. It screws up the rates for the rest of us but once again, there’s really no stopping somebody that wants to work cheap.

But, here’s where it always gets frustrating…

They didn’t yet have the job, they didn’t have a brief, they didn’t make a single penny, yet they produced all the work.

Spec work.

No matter how well I presented, I simply could not compete with that.

For any of you designers or agencies belonging to a professional design organization, you couldn’t either.

You are not allowed to.

Now, I don’t belong to any organization but this got me thinking. By joining a professional design organization are you shooting yourself in the foot in today’s overly competitive world? Will you continuously lose projects to others that don’t follow the rules and moral codes of conduct?

I was feeling pretty down when I received that explanation/reply. It took me some time to shake off the loss. I finally sent another reply to the client whose business I just lost explaining how I could not compete with a company that was willing to create all the work on spec.

I wouldn’t want to. I’d like to fully research the company to the best of my ability, understand their business and their USP, and know that whatever I finally created was exactly on target. That it was the best work I could produce to make a full impact on the consumer and gain my client a successful ROI that (hopefully) exceeds all of their expectations.
And as I told my lost client in the last sentence of my email…

“I’d rather be honourable”.

The question I want you all to ask yourself is this…

Are you?

Until next time, keep dreaming.


Heidi Ehlers said...

Buyers are liars. It's an expression from the real estate industry. Ask your Dad, I bet he's heard it.

And people never know what they want. They know what they don't want.

And you did the right thing. So easy to miss when you present spec creative without an incomplete brief.

It's why I don't fire candidates at agencies without a mandate. My job is to save them time, not bung up their inbox.

Keep on, keeping on.

Or as the South Africans say, Hou Kours. Hold your course.

~ heidi

Hollis Bartlett said...

Hope you don't mind some brutal honesty...

It's possible that someone came in with ads already designed. If that was the case then that person doing work on spec is obviously really hungry for business, is new and doesn't have much on the go. If you have time to be creating work that's not contracted and quite possibly won't get paid for there's a problem in your business.

If a client has someone come in and present them with work already done, that should be a big red flag for them. If they don't see this, then maybe they wouldn't have been the ideal client you thought they were going to be. You're probably better off without them.

However, read between the lines of their response. It's quite possible that there weren't 3 ads at all, could all be BS. Here's what stood out to me: "...helped to reassure us that they were very capable of producing a quality product"

Translation: You didn't inspire enough confidence in us to hire you.

Doesn't mean your portfolio wasn't great. It just means your presentation didn't hit the right buttons. Perhaps you were too preoccupied with pricing in the presentation, when they were more interested in your work. Just because they say your price was higher doesn't mean it was, and if they were price driven they probably wouldn't have invited you for a presentation anyway.

Don't take it personally, you win some, you lose some. Often it just boils down to dealing with the person they like the most, who they see as a good fit for a working relationship (as long as the pricing is competitive and the quality is there).

If this happens fairly often for you, you may want to take an objective look at your presentation. From your description I got that you talked alot about the industry, your accomplishments, pricing... in other words you talked alot about yourself. Perhaps if you concentrated on them instead of yourself and the benefits you could add to their business it may have turned out differently.

Again, I could be off base here, just my (hopefully) constructive criticism based on your description of events.

Ronnie Lebow said...

Interesting. And all valid points. Of course, I can't outline the entire presentation and obviously I would have outlined what I can offer them etc.

What I find most interesting is your take on the sentence "helped to reassure us that they were very capable of producing a quality product".
To me, reading it again, it sounds like they had already found the company they were most likely going to use, and wanted to see what they can do.
They may have even asked them beforehand to produce some work. For all I know, I may have simply been asked to come in for price shopping comparisons. No different than knowing what car you want to buy, but test driving the competition just to make sure you are getting good value and making the right choice.
Unfortunately, I will never know the exact truth and as you have said. You win some, you lose some.
The main point is, if you HAVE to produce spec work in order to win some, are you willing to take that route?

James Harrison said...

Thanks for posting about your experiences... very insightful.

I think it is important to look at it from the perspective of the client chose someone else because they (the client) were cheap and not because one of the other freelancers were "playing dirty". In reality them offering Spec work, and winning the job on it makes no sense at all, if someone produces crap work, then whether they show the client their portfolio or new work on spec, it is still going to be crap, and "cheating" is not going to make their work any better. The client chose this person because the client was cheap, period.

IMO This is a simple case of a client shopping around based on price alone, not quality, and definitely not ROI. Even if they sounded good to you in the beginning, it is better that you didn't get this client. You would have only ended up with them constantly asking you to do work for cheaper, or cut them a deal on every leg of every project.

I think it is better to focus your energy on doing great work and constantly improving it, and not worry about your competition "cheating" . They are going to be too busy doing free work and discounting themselves to stay your competition for long.

RajStyle said...

Great insight, Thank You! I feel better. I am a freelance Photo Stylist, and I too, lost a project last week because of budget. I had a hard time accepting the fact- but I would rather be honorable and do quality work.

Behzad said...

I think it was a case of the client wanting to get second or third opinion and boost their confidence about their already designated designer. Some clients even go far as getting reassurance on their design by asking other designers what their opinion is on a certain project. I had this happen to me, I personally don't like it but that is not my lack of confidence but theirs. I still believe it is all about price. Yah I heard it over and over again about educating the client but that is waste of my time and theirs so price plays a big factor. Also let them first talk about price, never offer a range on the spot, always go back and think about it then present them with the quote. I am sure you done that already. Otherwise I still think your a great designer and just brush off prospects like that.
I would also send them a link to no-spec website.

Max Nomad said...

I've been down that road a few times in a few different industries. After reading your blog entry, the scenario that comes to mind has nothing to do with Graphic Design or Branding.

For the past two years I've also been a partner in a small Home Improvement company that specializes in custom tile work with kitchen and bathroom renovations. I handle the admin side, helping to grow the business and such. Anyway, shortly after I got involved with the business, a call came in from a big-time developer. They wanted to send us the plans for a national franchise restaurant and needed us to submit an estimate ASAP for handling all of their tile work. Super excited about the prospect, I actually paid an architect friend of mine to show me how to do cost estimate takeoffs (of the materials), my biz partner calculated all the labor, and put together a proposal package that was better designed than some corporate profiles. Our point of contact with the developer was extremely supportive throughout the process, offering up everything short of his sister in a negligee to keep us excited about our chances of winning the work. It seemed like we were either a shoe-in for the job or at least on the short list.

After submitting our bid, we never heard another word from them. No letters. Phone calls were made, emails were sent, and none ever received a response. We were bummed out. For days I was at a loss, wondering if it was something we did wrong or maybe a price issue. Eventually I got over it -- until the next time a similar call came in. Same kind of commercial contract, same process, same treatment, different developer. Same outcome.

Eventually I happened to befriend a larger contractor in another state and told him about the situations. He started to chuckle. My heart sank a bit because I hadn't said anything funny.

Long story short, it goes something like this: a developer has some manager bidding on a bunch of contracts. Instead of using their own estimator or hiring one, they'll call a few small contractors for each type of work and offer them the opportunity to place a bid. The contractors, hungry for work, happily jump at the chance to impress the company, submit their best bids. The manager looks them over and uses the best numbers for their own purposes, whether as part of their bid to someone else OR as a barometer of what to set as a fixed price for some other contractor. Either way, it wasn't going to lead to any work for us.

Over the course of my career, after encountering that kind of situation in Web Design/Development, Print Design and Construction projects, what I've come to understand is that there were patterns involved in each case. Those patterns allude to finding yourself deep in the losing side of the "Buyers are Liars" scenario someone mentioned in a comment on your blog.

It's a little like playing Poker, particularly 7-card stud or Texas Hold'em, and figuring out how to play your cards after the flop. If none of the cards on the flop have hit what you have in your hand yet one player bets and two or three other players match that bet, the correct move for you to do is to fold and wait for better hands -- not because you *can't* win that hand. You're folding because (1) there's the overwhelming chance that one player currently has the winning hand (a decent hand like two pair or trips), the other players are trying to outdraw him to get a stronger hand (straight, flush, etc), AND (2) your chances of getting the right cards in order to win the hand are next to impossible. Has nothing to do with how "good" your cards looked at the start of the hand. And contrary to popular belief, the quickest way to lose all your chips is to try to bluff someone that knows the game. Why? Sooner or later they will peep your patterns.

Nuff of my rambling and venting on the subject. Thanks for your post...

Alex said...

Also, you don't know what kind of ads this company produced that worked for free to present to the client.

Obviously not a single professional other than desparate graphic designers would ever do work for free and then hope if a client likes it, they'll get paid. Ask one of contractors to fix your plumbing or your roof and then when the plumbing solves the problem or if the roof won't leak, you'll hire them?

It's non sense.

In my opinion if a company went for some designs (and you don't know the quality of those ads) then you better not have such client. Focus on those clients who value graphic design and know the value of creative thinking.