In this episode, Chip and Gini discuss the common practice of providing free proposals and baseline ideas to clients. They argue that professional service providers should charge for these services as doing so adds value and ensures a thorough diagnosis before providing solutions.

They share personal experiences and compare the situation to doctors who would never prescribe treatment without proper tests. They emphasize the importance of understanding a client’s business through a paid discovery phase and making adjustments along the way to deliver effective results.

Additionally, they discuss the risks of providing overly detailed plans in early stages, the benefits of quarterly assessments, and the importance of maintaining clear communication and trust with clients.

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: Gini, you got me all wound up for today’s topic. And so I’m sort of frothing at the mouth here. And, I’m gonna try to control myself, but I, I’m not trying to do a funny opening ’cause I just got too amped up in the leadup.

Gini Dietrich: Oh, okay, well good.

Chip Griffin: And I was afraid, I was afraid of what I might say.

Gini Dietrich: I like amped up Chip. That’s good. That’s good. Yeah.

Chip Griffin: I’m trying, I’m trying to dial it down to keep it at a level where we don’t get kicked off of any of the platforms we’re on and my hate mail is limited to a minimum and all of that kind of stuff.

Gini Dietrich: That doesn’t happen.

Chip Griffin: No, that’s true. I don’t, I don’t get that. No. But

Gini Dietrich: yeah,

Chip Griffin: I’m surprised. I mean, I, I would think with some of the things that you and I say on this show, we would get some people who are like, I cannot believe you said that.

Gini Dietrich: Maybe we do, and they just don’t report it to us. To the podcast platform.

Chip Griffin: That’s true. Or maybe they include it one of the inane podcast pitches that we get that I just hit delete without actually reading.

Gini Dietrich: Jeez Louise. It’s so bad. My favorite is when they pitch the FIR network and Shel Holtz forwards emails to the two of us and he is like, oh, here’s another prize.

Chip Griffin: Yep. I mean, I can tell, I can tell most of them when they’re, when they’re really poorly targeted, because those usually come into my iCloud email address.

Gini Dietrich: Oh, interesting.

Chip Griffin: Which is what I’ve registered the podcast with for Apple Podcasts.

Gini Dietrich: Got it.

Chip Griffin: And, but it’s literally the only email I ever get on that account, so. Huh. So I know as soon as it comes in that they have not done any research because that email address is not published anywhere.

I don’t use it for anything.

Gini Dietrich: So how would they get it? Through one of the systems or through one of the platforms?

Chip Griffin: I think so. It’s probably in the metadata somewhere. Yeah. Who knows? But

Gini Dietrich: fascinating.

Chip Griffin: Yeah. Yeah. Not, not a lot of smart podcast pitchers out there, unfortunately.

Gini Dietrich: Well, unfortunately there’s not a lot of smart pitchers generally just based on my inbox and based on some of the private communities I’m in.

Chip Griffin: Well, I mean, yes, and, and I do get, because of my various blogs and because I used to to have a political newsletter, I get an an insane number of actual pitches for people who think that I am proper media.

Gini Dietrich: Right.

Chip Griffin: But, but they are wildly, poorly targeted.

Gini Dietrich: Yeah. Yeah.

Chip Griffin: And I’m tempted to say, look, I, I haven’t done food and beverage reporting for 15 years now, so… I still get a lot of political pitches.

Gini Dietrich: Do you?

Chip Griffin: I have not had a political newsletter since 2015. Wow. So stop. Just stop.

Gini Dietrich: Yeah. I get a lot of Chicago area stuff, which is fine, because I’m like, oh, well that’s cool, but I’ve literally never covered Chicago.

Chip Griffin: Correct. Oh yeah. I get, I get all the New Hampshire stuff and like, oh, so and so got a grant. I don’t care. I mean, that’s Okay.

Gini Dietrich: Great. Awesome.

Chip Griffin: Thank you. Congratulations to them. But I don’t know what I’m gonna do with this information, so, right.

Maybe go get a different list. Anyway. Alright, well now that we’ve ranted about things that have nothing to do, that have nothing to do

Gini Dietrich: with, right,

Chip Griffin: with, with our actual topic, what are we going to rant about today? Gini?

Gini Dietrich: There was an interesting conversation in one of the groups I belong to, and it was essentially this.

Have you considered charging for your proposal and baseline ideas? Most professional service providers charge to assess the situation. After all these years, we still provide the outline of an actual plan and sometimes a campaign concept absolutely free of charge. Stop doing that. The discovery part of our process generally takes time.

Yes. And then the proposal is written and fine tuned, and then there’s a presentation. We do close two out of three engagements we pursue. Still, I can’t imagine a CPA or a law firm doing this kind of work. Why do we? Well, we shouldn’t. Let’s not do that.

Chip Griffin: Yeah. So it is incredibly common for agencies to try to provide fairly robust plans as part of proposals, or worse as part of RFP processes.

Gini Dietrich: Right.

Chip Griffin: There is way too much detail included in almost all of these. And I’ll be honest, my issue is not that you’re doing it for free, not that you’re not charging for it. It’s that you’re being stupid. Because you are submitting a prescription for how to solve a problem before you really have much information. We’ve said time and time again that as part of the sales process, you have maybe a couple of hours of conversation with a prospect. That is not nearly enough time to really understand what the right approach to solving that problem is.

You may know in broad brush strokes what is likely to be the case, but you don’t know enough to put together a detailed plan. So whether you’re paid for it or not, stop doing that.

Gini Dietrich: Yes, please. I 100% agree with this. We stopped doing it many years ago, but I love your analogy on this, so I’m gonna let you take it because it works perfectly here.

Chip Griffin: So this is, putting together a detailed proposal that includes the outline of a plan would be pretty much the same as if you walked into your doctor’s office and said, Hey, doc, I’m not feeling well today. And the doctor looks at you once and says, you know what? I’ve got the prescription for you. And they immediately write you a prescription or schedule a surgery or something like that.

They can’t do that because they don’t have enough information. Right. Even when, based on their experience, they have a pretty good idea what it is. They still order tests, they do blood work. They, they do other tests. They take x-rays, whatever it may be, to confirm that what they suspect is actually what they need to treat you for.

That’s right. You need to view your clients and prospects the same way. You should not be in a position of having one phone call with a client or prospect and saying, yep, know what that is. Here’s how we’ll fix that, and here’s what it costs.

Gini Dietrich: And I think saying to the prospect if they’re expecting a plan or you know, detail like that, I think it’s really important for us to say,

Like, we just don’t know yet. We need to, we need to know your business. Like we can, we can do some discovery and learn about you. What’s online for sure, but that’s not enough. We have to actually dig into your business and understand how the business is run. Do we have experience in your industry?

Of course we do. Do we know kind of the approach we might take? Of course we do, but we have to create a prescription to write exactly for you and your business so that we can have success. And we can’t do that without spending, you know, 30 or 60 days with you and, and getting to understand, getting to know and understand your business.

Chip Griffin: Right. So if we don’t think that you should be putting together these detailed plans as part of your proposals, what should you do instead?

Gini Dietrich: I mean, probably, gosh, 10 years ago we started doing sort of, we have sort of a three phased approach. And the first phase is for lack of a better term, discovery. So the client is paying us to learn their business, understand their business, talk to their stakeholders, talk to their employees, talk to people that are important to them.

Talk to customers, talk to former customers, do all of that work to really understand what the pain points are. And through that, we also do some things, which I would call quick wins or low hanging fruit, right? Because the client doesn’t always wanna pay for quote unquote strategy. So there are some things you can do immediately.

We’ll do an audit. We’ll look at, you know, because we always do the PESO model, we look to see what’s, if they’re doing a full, If they’re doing paid, earn, shared, and owned, what’s missing, what’s not if it’s fully integrated. So we can do that as, as we go along as well. And we can do some quick wins in terms of like, oh, you know, Halloween’s coming up.

Let’s do some social, some themed social media for that. You know, so give them some tangible things while we’re doing the discovery and learning the business that are easy, right? And not dependent on a strategy. Make them feel like we’re, we’re making progress, but getting the information that we need.

And then once we go from that, we craft the plan, which is the second phase. They’re paying for that, and then we start to execute. So it’s sort of that three phase. And what we have found is it’s a lot easier for a prospect to swallow a three phase plan because what they’re, in their minds, they’re thinking, okay, well if this first phase doesn’t work out, first of all, it’s not terribly expensive, and if it doesn’t work out, then we don’t have to do the second and third phases.

We can just take it and, and do it ourselves. Right? So they, whether or not they’re in love with you, they, that’s just human nature, what they’re thinking. And what we have found is that because they don’t feel like they’ve been roped into an annual contract where there may or may not get results. They’re, they’ve been roped into discovery or strategy building, or however you wanna call it, whatever you wanna call it, and they’re, they always, always spend more money.

On the execution than they would if we went right to execution in the beginning. Always. They always do. Mm-hmm. Because they see the value and they understand now how you’re, you’ve become a partner in their business versus just, this is what we do for everybody else, so we’re gonna do it for you.

Chip Griffin: Well, and, and as we’ve said before, it also gives you an opportunity to make sure that you are pricing that work correctly.

That’s because now you, it’s a good relationship. Now you have more information. Yep. Including how the client is to work with. Absolutely. And how responsive they are to your information requests or approvals or feedback or all of the things that make a big difference in your profit margins as an agency in your ability to deliver effective results for them.

I think the, the bottom line is that one way or another, it’s not so much that you need to get paid for it, but that it needs to be part of your process. Mm-hmm. That you do an actual diagnosis while engaged with the client and not prior to. Right. Because it, you simply can’t do it in the amount of time and with the amount of resources that you have available from the client before you’re actually working with them.

And whether you do that in a formally staged process or you simply sell audits or some form of paid discovery as a standalone. You know, door opener kind of activity. Or as some of my clients do, you simply say, look, for the first month of our retainer, we are going to be focused on building a plan. Sure.

And that is, that is the focus for the first 30 or 60 days. Yep. And you’re setting that expectation and it will refine the specifics as we move along. And that may require us to adjust, to come back to you and say, we need to adjust this retainer up or down based on what we find and what the, the best approach is.

And if you do this effectively, you’re not only coming up with a, a better solution for the client, but you’re building trust with them for the reasons that you outline. yes. Because they are now looking at you as the expert who is trying to spend their money more effectively.

Gini Dietrich: Yep.

Chip Griffin: The challenge, however, of course, is that most clients say they want to plan, but they don’t like the planning process.

Gini Dietrich: That is right. Yes.

Chip Griffin: And because for a few reasons, the, the top of the reason is because they, they want to see results immediately. Yes. And so I think your suggestion that you find low hanging fruit that you can deliver prior to the formulation of the proper strategy. Because there are things, there are little things that we almost certainly no going into an engagement will need to be done regardless of what the diagnosis is. And so why not throw some of those into the mix for those first 30 or 60 days in order to, to start showing some progress. But that is wildly different from starting down the path of a three month project that only at the end shows a result.

And maybe by the time you get halfway through, you realize, well, this doesn’t make any sense. This is not what they actually need. Right? We can’t actually get the results that we want from it. So you need to really be thinking about these things in, in the process of, of planning effectively.

Gini Dietrich: Yeah.

Okay. So let’s assume everybody is on board with that. Then I, I would think the next argument is, well, the way I’ve always done this, I’ve, you know, I get 70 per, I close 70% or 75% of my prospects. I don’t wanna lose that. So what’s, what’s our argument there?

Chip Griffin: So, I mean, my argument there is, is, first of all, I, I believe that it is unlikely that the reason why you are closing that percentage is because you are taking so many wild stabs in the dark, right?

Gini Dietrich: Yes.

Chip Griffin: It is entirely probable, in fact, that they would’ve gone with you whether you had that level of detail or not. Now. If you switch to our proposed approach and all of a sudden you see your close rate plummeting, okay, now you need to take a look at what you’ve changed and, and is there a different way to go about it.

However, I think it is extremely unlikely. Yeah. That you would find switching to us would have that kind of a dramatic impact on your close rate. I think the other thing to to look at is for the business that you have won, do you feel like that, that you have properly diagnosed in all of these cases in that initial plan?

Gini Dietrich: Mm-hmm.

Chip Griffin: Because if you find that, as I think is likely, there would be adjustments that you would’ve made along the way had you had more information. Mm-hmm. That may have also helped you adapt your pricing so that you’re more profitable.

Gini Dietrich: Mm-hmm.

Chip Griffin: Well, those are all arguments that even if you won the business, it was not the right way to win it.

Right. And so you would’ve been better off winning it in a different way, at a different price with a different scope or what have you. So you need to look at the big picture. And finally, you also need to look at what are the costs of the ones that you create. Right? And don’t go anywhere. Yeah. Because we all, I mean, particularly when I, when I talk to people about RFPs, people, they, they talk about the, the one big RFP that they want and they say, well, I can’t give up RFPs ’cause we got this one back in, you know, 2017.

And it, you know, it, it’s really, it’s been the, the driver for our business for the last eight years and blah, blah, blah. Okay, cool. But how many RFPs did you lose along the way? Right? And once you factor in the cost of responding to all of those, did it still make sense? And so you need to be looking at that and not just the two out of three that you’ve won.

Honestly, if you’re winning two out of three, I would probably, you know, look at whether you’re talking to enough people, because you could probably grow even faster if you had a slightly lower

Gini Dietrich: right. Yes.

Chip Griffin: Close rate. Oh, it, it does depend a little bit on when you’re creating these, because, you know, we, I would say the vast majority of agencies create proposals way too early.

And so, you know, they’re, they’re not taking it as far along in the process, but if you’re at least holding back until it’s almost a done deal, well then two outta three is probably a reasonable close rate. But if it’s these are all of your serious conversations, you’re not having enough.

Gini Dietrich: I totally agree with that.

And I was gonna say, I would 100% agree with you and would venture to guess that if you have more conversations, you will get a higher close rate. Using our process. Because there’s no risk to the client. I mean, they might be out a little a, a few bucks, you know, but they were gonna spend the money anyway.

And you both learn if it’s a great relationship for you. So I actually think your close rate would be higher if you use this process and talk to more prospects.

Chip Griffin: It, it certainly ought to be. Yeah. You know, obviously there’s, there’s nuances to every agency’s target audience and, and their appetite for, you know, for doing things and whether they want to be more reckless or not.

You know, if you’re dealing with startups, they’re probably less inclined to, you know, to pay for some kind of planning process. Right. Because startups are notorious for wanting to just roll the dice and see what happens, right?

Gini Dietrich: Right.

Chip Griffin: It’s not necessarily the right approach, but it is the mentality that a lot of tech startups historically have had.

And so you need to, you know, to be conscious of that. But I would say the vast majority of prospects that, that listeners are going after, will be open to this, particularly if you’re positioning it in a way that explains to ’em that you’re trying to make sure that you’re not wasting their time and money.

Gini Dietrich: Mm-hmm. Mm-hmm.

Chip Griffin: Because at the end of the day, the reason why people tend to be leery of hiring agencies is because they’re worried about throwing money away. Because maybe they had bad experiences with past agencies that they feel like we paid them a lot of money and we didn’t see any results. And part of that may be because that agency gave them a proposal and a solution without information. And so, and then, then of course, you know, as, as we are, you know, we have a contract in place, we have a plan, we feel obligated to march forward on the path that we’ve given the client. Right? And so that’s the other thing I would say is even if you go through this and you do a 30 day plan or something like that, with the planning process rather with the client.

Don’t feel like six months later you can’t go back and say, Hey, look, we have even more information now. We need to course correct. We need to pivot. Yes. It creates a risk because now you’re talking with the client and admitting that your diagnosis may have been either off base or not as full as it should have been or whatever, but you’re putting yourself in a position where you can actually get the results that the client is looking for.

Right. And so to me, it’s worth the risk of pivoting even somewhere down the road in the relationship.

Gini Dietrich: Yeah, and I know we’ve talked about this before, but one of the things that we implemented during the pandemic was quarterly assessments. So that we’re looking at the plan every quarter to to understand, okay, what worked, what didn’t work?

What do we need to tweak? You know, we’re constantly doing that. And yeah, of, of course it’s risky because you are admitting that some things didn’t work. But what it does is creates even more trust because the client looks at you and goes, oh, well, they’re not just feeding me full of baloney. They’re actually being honest about what worked and what didn’t, and they’re willing to pivot and make change so that the things that aren’t working, either we’re getting rid of and not doing, or we’re tweaking it to make it more effective.

So I think you build even more trust when you create that kind of cadence that allows the client to be involved in the planning decisions and planning discussions and measurement too, to understand what’s working and what’s not.

Chip Griffin: Yeah, and, and you know, this is, people know that I, I like weird analogies.

I think if they’ve listened to this show at all. And, and you know, if you, if you think about it, you know, if you’re in an Uber and you’re, you know that you’re going on the shortest route to the location you’re trying to get to, and it’s the, the route that you, you have endorsed and say, yeah, that’s, that’s the way we should go.

We should go the West Side Highway or whatever. If the road is flooded in front of you,

Gini Dietrich: right.

Chip Griffin: You don’t want your Uber driver just to keep driving straight into the flood? Nope. You want them to go off and go around it? Yeah. Even though that technically takes longer because you know what? You’re not gonna drown in the flood.

You should be the same way with your clients and say, Hey, look, I, I see we’ve got bad weather ahead.

Gini Dietrich: I love that.

Let’s, or traffic, let’s go around it. We have bad traffic ahead.

Chip Griffin: Traffic, anything, right? Yes. You’ve got to, you’ve got to use judgment here. Yes. Love that. You are being paid as an expert to use your judgment at all steps of the process.

And if you ever feel that you are in a position where your expertise is either not valued or you don’t feel comfortable delivering it, then you are in the wrong relationship and need to look elsewhere.

Gini Dietrich: Absolutely. Yes. And that is a different discussion for a different time, but

Chip Griffin: it is,

Gini Dietrich: we ha I have a client right now who’s, I’m like, red flags.

Let’s, let’s address the red flags.

Chip Griffin: Ah, red flags. Well, maybe we’ll talk about red flags again sometime soon because I think it’s been a while since we’ve ranted about red flags. But I think we’ll draw this rant to a close before we go too far off the rails, but I think I, I think I controlled myself pretty well I think.

 Gini Dietrich: You did. You did.

Chip Griffin: I think I got, I think I got most of the bad energy out before we hit record.

Gini Dietrich: I didn’t even think it was bad energy.

Chip Griffin: So that I could have a more modest rant.

Gini Dietrich: You did. You did very well. Thank you. You did very well. You’re welcome.

Chip Griffin: Thank you. I’ll pat myself on the head there for that.

So on that note, we will draw this episode of the Agency Leadership Podcast to a close. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich

Chip Griffin: and it depends.