Charging clients for internal agency staff time

If you have listened to Chip and Gini’s advice in the past, you are carefully tracking your team’s time to understand how much it costs you to serve your clients.

One of the things that you might discover is that you’re spending a lot of time on internal meetings and conversations — something that you may not have considered when you set the initial price for the engagement.

What do you do now? A recent question from an agency owner wondered if they would need to double a client’s retainer to capture the hidden costs.

Chip and Gini discuss how to handle this challenge for existing accounts, as well as how to look at internal staff time for client work generally.

Key takeaways

* Chip Griffin: “This isn’t Churchill Downs. You don’t need to get down to the hundredth of a second and know exactly what is being spent. But you need to have a pretty solid and accurate understanding of the amount of time that you and your team are putting in to service the account, because otherwise you simply can’t price correctly.”* Gini Dietrich: “We always look at what it costs for us to do business, and then we don’t line item it, but project management and account management and meetings and Slack and emails and all that is accounted into the cost that they are paying.”* Chip Griffin: “It’s generally better not to go in and do an apples to apples price increase. It’s better to go in and say, We’ve been doing apples, we should do oranges, and here’s what oranges cost.”* Gini Dietrich: “Losing money, bad. Making money, good.”

View Transcript

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And good news, everybody, the time we’re gonna spend on the podcast today doesn’t count. Learn more right after this.

Isn’t it great when there’s magic time that doesn’t count ?

Gini Dietrich: Yes. Kind of like magic calories.

Chip Griffin: Magic calories, Yeah. Those holiday party calories that you consume and they just don’t count because they were at a holiday party. Yep. So,

Gini Dietrich: Yep. On your birthday, Doesn’t count .

Chip Griffin: Birthday yep. Doesn’t count. Doesn’t count. Yep. Anything, Anything you do in Vegas doesn’t count. It stays in Vegas. true. Sadly, that’s not true with agency hours. No. And so that’s what we’re gonna talk about today and, and it’s actually based on a conversation that took place recently in a Facebook forum. And so Gini, I’ll let you kick it off since you’re the one who came across it as something for us to discuss.

Gini Dietrich: Sure. So the conversation is, or the, the question really was, we’re spending, we’re, we’re capturing our time thanks to project or to a time management system, which is great. But because of that, we’ve realized that we’re spending thousands of dollars a month on more administrative tasks like emails and Slack and meetings .

We’ve been doing weekly meetings and team check-ins every other week, and we’re estimating a minimum of 30 minutes per week per team member on the account just to check Slack and email. That adds up. And as such, we’re considering rescoping clients with th...