At May 9th's shop talk we discussed "What are the best practices for year-long contracts?"—working through several real world examples of contracts gone awry, brought forth by agency professionals on the call. Here are the key takeaways:
Don’t front-load the work. Delivering the majority of the deliverables too quickly may leave the client wondering whether they still need your agency, now that the bulk of the work is done. If payments are spaced out across the year, and the client breaks the contract early, there may be significant financial repercussions.
Signing a year-long retainer contract doesn't mean the client sales cycle is over. Relationship managers must ensure clients use the time they purchased and get enough tangible value. If they are underutilizing the contract they will be less likely to renew and generate referrals.
Sell a discovery project that yields a proof of concept.
Before you decide to contract with a client, make sure it's a good fit. Sell a discovery project that culminates with a proof of concept. The discovery session will help you size the year-long contact and set a safe price. The proof of concept will validate your agency’s capability to the client and deliver value regardless of whether a year-long contract is signed.
Sell a pace of work.
Prove that your agency can get the job done with a discovery project. Then sell a pace of work with regular progress updates and renewal checkpoints. The pace of work dictates how many resources to assign to the project and how quickly you’ll deliver value. Selling a pace allows an agency to avoid committing to specific deliverables, working with the client to discover new needs over the course of several mini-projects or sprints.