How to successfully balance client management and project profitability

Keeping projects and clients running happily takes a lot of juggling. It’s not just about ‘front of house’ — taking briefs, managing projects and client feedback — it’s also about ‘back of house’ financial management. Things like budgeting, quoting and managing costs to keep projects profitable.

As an account executive or manager, you could well be asked to carry out budget management. And this might not necessarily be something you’ve trained to do. But there are ways you can improve your commercial understanding to help you better manage budgets.

Here are my five top tips:

1. Talk to your teams

It’s not all down to you! So often, account managers keep things to themselves so they’re not burdening colleagues. But really, this means you’re not harnessing the knowledge across the business. For example, you’re asked to set up a project budget for a website. Here, you can tap into the experience of your designers and developers to create your budget.

Ask them, what questions you need answering from the client to establish the scope of the project? What parameters do you need to stipulate in your quote? And ask them for a rough estimate on the time that they need.

Agencies have brilliant teams, where everyone supports each other. And the power of these teams is that one person doesn’t have to know everything. But you do need to talk. And it’s really important to respect what your teams are telling you.

When you’ve created your budget, share it with the team when you share the brief, so colleagues know how much time they have for each phase of the project.

2. Understand the difference between an estimate and a quote

Your estimate is internal and your quote is external. And essentially, you need your estimate to be correct. You need the hours estimated to be an accurate assessment of how long you and the team think it will take to complete the job. You may know that a job will likely take 20 hours. But perhaps this is a regular client and you decide to offer some discount and only quote for 15 hours. Your quote is a commercial decision. But you can’t change the amount of time on an estimate to match the quote, otherwise you’ll always look like you’ve overspent.

3. Be clear on the scope

Setting clear parameters internally and with your client can help you manage your budgets and tackle any challenges as they come up. You’ll have an in-depth knowledge of what’s included in your budgets. And so will your client.

This makes it much easier to tell them if a request is out of scope, such as an amend or an additional page. It’s harder to say no if you haven’t told them what they can have in the first place.

If you don’t know the scope, don’t provide a quote to the client. A good example here is if a client wants a video and you know you need to go external to provide it. I would suggest just quoting for a storyboard to start with. Then you can flesh it out with your suppliers, asking for a three-pronged approach of bronze, silver, and gold offering so you can give some options to your client. It’s always a good idea to have monetary conversations upfront. It might not be your favourite thing to do, but the longer you leave it the harder the conversation could be.

4. Appreciate the value of time

You’re all working to deliver great, maybe even award-winning work, to your clients. But you’re also selling your time. Don’t sell yourself short. Appreciate and understand that your time is your commodity. Your clients are coming to you because you can do the jobs they can’t. If you worked in a shop, you wouldn’t give all the merchandise away for free.

Respect that time, whether it’s yours or that of a team member.

The classic client pushback is to say it will take less time, when you know it won’t. But never just agree to reduce the time. You want to stay on your clients’ good side, but saying ‘yes’ the minute they ask for a reduction isn’t the way forward. Instead, ask them why and take it back to your team to discuss. Those actually doing the job know how long it’s likely to take.

You could take a collective commercial decision to do the job anyway within their budget. But it makes more sense to tell them what you can feasibly do for those costs. You’re giving them some options, rather than just agreeing to demands.

We are hard wired to be people pleasers. But underestimating isn’t actually pleasing anyone. It’s setting yourself up to fail and ultimately won’t please your team, client or managers.

5. Don’t ignore your budget

Nobody likes to talk about budgets. They’re often overlooked or ignored completely as teams get into the nitty gritty of project delivery. There are always areas of account and project management that seem to take precedence over budget management. But then you have to have a wash-up meeting about why you’ve overspent. And these are never fun.

Monitoring as you go is a good idea, as you can handle challenges as they arise. If it looks like you’re going over, you can say to your client, for example, ‘We’ve spent 70% of our design budget, but we’ve only done 50% of the work. In order for me to do these extra amends, or add in this extra page, I’m going to need some more budget from you.’

You can do this as you go along, but you can’t do it so easily later on. If you get to the end of a project and you’ve overspent, that’s a much harder conversation to have with your client.

Sometimes your team comes up with a fantastic idea but you know it will need extra time. Here you need to have an internal discussion about what you’re willing to invest to see this idea come to life and an external discussion about what you can ask the client to fund. That’s what agencies are there to do, to push boundaries and to constantly challenge themselves and their clients, to get the best outcome.

Try to avoid wash-ups after the fact. Know your budget, and if it’s over, why it’s over. This can help you learn for the future.

The commercial/client balance

Decision making is a key part of account management but it doesn’t need to be a lonely road. Harness the knowledge within the agency to help plan your budgets. Work as a team, not a lone ranger. Always be prepared to listen and learn, so you can make yourself an invaluable member of the agency. One that is knowledgeable, resourceful and profitable.