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Ali Morgan advocates for a better understanding of clients and their needs to redefine value.
For decades, there has been a standard (and expected) approach when it comes to creative pricing. A brief comes in and we busy ourselves figuring out who’s needed and how long they’ll be needed to deliver everything that’s required. All these days and hours are allocated to rate cards and ‘hey presto!’ - you have your price.
But in recent years a new thought has been gaining momentum. What if the value of the things we do in creative agencies has less (or no) direct correlation to the amount of time it takes to do it? Should we be thinking about the price of our work being better correlated to the value it creates, rather than just the time it takes?
This approach is called Value Based Pricing (VBP) and the chatter around it in the creative industry is gaining momentum, and I predict this trend will only continue. We’ll hear increasingly from industry bodies and platforms, with more agencies announcing their shift to value-based pricing. Blair Enns' "Pricing Creativity" book will be circulated even more widely, as agencies eagerly experiment with VBP.
This enthusiasm is understandable. Agencies face mounting pressure to protect margins while managing rising costs, and clients are under intense pressure to deliver more with less. In this context, a fresh approach to pricing and revenue generation can seem enticing—like the solution we’ve been searching for. However, my concern with the current narrative around VBP is that it somewhat misses the point.
The real opportunity lies in stepping back and thinking more deeply about what we know—and what we can discover—about our clients.
Ali Morgan, Client & Commercial Director at Recipe
I’m a strong advocate for value-based pricing, but I view it as a principle, a way of thinking, a shift in mentality—not a silver bullet. To me, it has always been about recognising that the traditional approach of calculating the ‘price’ of something purely in terms of time and materials is just one of many commercial strategies available to us.
The real opportunity lies in stepping back and thinking more deeply about what we know—and what we can discover—about our clients. This can only be done through having candid conversations where we ask key questions such as: What are their hopes, dreams, and ambitions? What are the commercial objectives and opportunities of a particular campaign or project? Where do our Clients want to be in a year, three years, or five years?
What investment are they putting behind an idea? What is the scale of the opportunity or the potential risks involved? How do they actually perceive the value of what we deliver?
Engaging in these types of conversations more frequently, openly, and consistently can help establish a more comprehensive understanding of what our clients truly value and in turn, the value our work can genuinely generate.
The discussion around value-based pricing needs to focus much more on how we can improve our commercial and value-based conversations with Clients. It’s about understanding what matters to them and aligning our commercial relationships—or the proposals we put forward—more closely with these priorities.
Those conversations might lead back to a time-and-materials approach, and that might be the right choice. They could lead to a triple-option pricing model packed with value-adds that your Client loves, orperhaps to payment by results with a bonus-malus share on risk. There may even be a commission fee on media investment or you might be able to protect some degree of IP in your work and explore a licensing approach—taking a lower fee upfront in exchange for future value if the assets run longer than initially planned.
The possibilities are extensive, and that should be exciting. It could be some of these, none of these, or a unique combination—varying from one Client to another. This variety is not just acceptable; it’s essential.
Embracing a greater level of commercial creativity, underpinned by better commercial conversations with our clients, is crucial.
Value-based pricing might help us get there, but it’s just one of the pricing options available—much like time and materials.
Ali started within the Omnicom Network as a strategist for Interbrand, Siegel & Gale and Flamingo before moving into account management for Agency Republic and Claydon Heeley. He’s worked with brands like McDonalds, Lego, Tiger Beer, Bacardi, M&S, Royal Mail and 3 Mobile as both strategist and suit. Ali joined Recipe in 2014 to run the Coca-Cola account and became client and commercial director in 2019.
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