Expert: Peter Gabany - 11/16/2009

Question
Peter, I've read a few of your responses and they're so impressive that I'm burdening you with the prospect of another.

I'm the VP/CD of a small (30 people) marketing communications agency in Ontario. We're 100% project-based, no retainers, and while we're pretty successful at new business, what is becoming an increasing issue is client delays on projects: getting them to start them when they said they would, and complete them when they said they would. All too often project starts are delayed and projects stay unfinished far too long. This has at least two significant effects on the business:

1. The project fee never turns out to be enough, as maintaining a project over a long time, like inventory, eats away at any profit.

2. Because we're small, we have limited creative resources, and plan people according to very tight schedules. Projects that are delayed will often start when we've put people on other projects: the result is a tsunami of too much work all at once. And hiring freelancers isn't always an option, since they're expensive and also aren't up to speed on the project.

Do you have any advice on how to "unstick" clients and projects? We're talking about charging them for delays, but haven't yet figured out what to do, or what to base it on. Should we put something in the initial contract that makes it clear that delays will be somehow penalized?

Any advice you have will be greatly appreciated.

Answer
Blair,

Thank you for your candor. Project delays… yikes! All too often this can be a two way street as creative is not always the most efficient due to lack of process, egos and well, that's creative. But what you are referring to is all too cumbersome in any agency model and especially during this up and down economy.

I don't know that I can suggest anything here other than sympathize. Delays from the client side, getting a head of steam up in the account management or the creative departments are often deflated when the project is put into suspension and difficult to reinvigorate the troops when the client opens the flood gate of approvals or collaboration. Where last minute is born!

Then enter project creep. The longer the job rests on the table the client has additional time to contemplate the work in progress and his/her ideas that they saw somewhere else seep into discussions. And in the case of the client or agency, this can amount to loss opportunity and rarely does the pause result in a better return on investment.

We are often involved in web design projects. Repeated victim of project creep. Project intake with an original estimate given to the client. A deposit taken. Creative brief developed along with a site map and voila… project stall. In web design we write this down as unfamiliarity with the process and the enormous task of content creation or collection – the foundation of the web development process not to mention development of concepts unique to the brand or category.

Internally, we use Clients & Profits as agency management and accounting software. We do our best to schedule work and tasks with our staff - and as you say freelancers can be expensive and often so far out of the loop that it takes an inordinate amount of time for them to understand the client as do regular staff. So we are left to our original letter of agreement and change orders.

This is the only wiggle room I believe that we have. We (the royal we), often place terms in our agreements that state that a project will take a certain amount of time. Due to flexible schedules (ours and the client) we do not define the consequences if the project is delayed other than to state that in order to deliver by that time it will depend on timely response by the client. Nor that there would be a penalty for disruption or delay to that set schedule.

We sit here today awaiting approval to proceed on three items. (possibly more) One, a website, we have waited for since May and due to valid reasons, the client has not had the time to focus on the work. Consequently we have scheduled the work twice and interrupted the second time with the completion of 1st draft copy only to delay for a couple of more months. What is really sad is that back in June it was an ideal time to get the photographs in the weather that would best suit the look, feel for the project.

We are about to arrange a 3rd rescheduling of work. We would not be in a position to charge more to this client. They are older, loyal and typically steady.

I guess one must ask, does the Doctor or Dentist suffer if we wait in the waiting room for long wait periods? Can we charge them back. A close friend will wait in any waiting room for 15 minutes at which time he leaves. Always announces that he is leaving due to fact that like the doctor he has a schedule, unlike the doctor he keeps his appointments and asks when the doctor would like to reschedule - it takes nerve to place those demands on a “trained” system. I wish we had an answer.

Thank you for your question - call if you would like to discuss. (905)885-9895

Pete