I am going to shed light into some of the dark places of how that structure is not serving you or your brand. I can do this because for the past 20 years, I have had the rare experience of having worked for both agencies and clients leading brands. From startups to Fortune 100 companies, offline and online agencies, creative director and account lead, media and digital strategist, or as the intern pasting up creative and producing multimedia presentations, I have worked with more than a billion dollars of media in my career. Because of that experience, I am often hired by agencies or clients to help identify areas for improvement in the relationship, and the first place I start is the structure of the account.

Success in an agency-client relationship is often about process and the most efficient structure to produce the highest quality work at the lowest cost. That is what the agency-client relationship is about, and failure to recognize that is why many agencies are ripping off many clients without even realizing it.

Conscious or unconscious, purposeful or accidental, there are countless ways your agency is ripping you off, and almost all of them can be avoided. Here are a few pointers that will help you restructure your account and your agency relationship to save massive amounts of money, produce amazingly effective creative — and have your agency thank you for it.

No retainer and costly work
If you are not on a retainer, your agency is ripping you off, and if you are on a retainer, your agency is ripping you off. In the first scenario, you are not getting value for your money (I’ll explain why later), and in the second, you are a dumping ground for agency employees who are burdened with having to account for every hour they are in the office.

If you are not on a retainer, you are signaling to your agency that it isn’t important. Without a retainer, the agency cannot effectively plan resources. It affects how and when it can bill work, how it can bank income and estimate future earnings for tax purposes, and it has far reaching implications for the agency — every project, every idea, every time it has to create a “project” and then bill hours toward that project.

At least 40 hours are wasted in the set-up alone of a new project with all of the paperwork involved, and that’s not including the hours spent trying to get you, the client, to sign off on it. You end up paying all this money for nothing that is actually moving your brand forward. When you look at all of the time wasted with people scurrying around doing nothing before you even get started on any project, you are dumping money down the drain – right into the agency. Now imagine that the project is for a banner ad, or a simple print ad, or some other small project. The management aspects of the project are essentially 10 times the actual value of what is being produced. You end up with a system that is massively overpriced for the value it provides. And you complain about it.

But again, this is your fault. Since the agency cannot plan, you get the people who are available at that time to do the work. This is massively inefficient because this is not a team of people. Rather, this is a haphazard assembly of whoever is available, and they will constantly have to spend time getting up to speed on your account. Even if you don’t know it, you are being billed for that time. Inefficient meetings, creative that doesn’t hit the mark or is not on brand — it happens in countless ways. The process is massively time consuming, and how are you being billed? Time. In an attempt to “save money,” you have contributed to a system that tends to produce inferior work – and less work, at a much higher cost.

What you may not know is that your agency hates this process. It also understands that you are wasting money on areas where it isn’t getting to produce decent work. But the agency is not incented to change if you are stuck in the mindset of “I’m not signing a retainer agreement!” So, although everyone who works on the account hates the process, the agency will gladly take your money.

Retainer and hours
However, if you are on a retainer, you become a dumping ground for agency personnel. Why? The dreaded time sheet. Each week or two — or in the case of some creatives, months – each and every person in the agency has to account for their time, what projects they have spent it on, and on which client accounts. But no one, and I mean no one, at agencies is accurate with these “guesstimates.” Unless you are working in an environment where you punch out and punch in on every project, our brains are just not geared for accurately figuring out how much time we spent on something two weeks ago.

What happens is that people at the agency fill out the first round of their time sheet and realize that it only accounts for half of their hours. If everyone at the agency was honest and just stopped right there then clients would not be getting ripped off, but that doesn’t happen. When you work at an agency, every hour you work must be “billable.” The retainer-based account becomes a dumping ground for things like: “Thinking about creative for brand,” “Spoke to client about media strategy,” “Worked on new way to do graphics for brand,” “Thought about new commercial/banner/website idea.”

Rarely do they say: “Went out drinking with a bunch of co-workers at lunch for three hours and did absolutely nothing but blow off some steam because we are all stressed from the hours we are putting in and our brains are fried and we needed it so the time we do spend on the account is useful.” Nope, you end up with five people billing three hours for a “creative meeting.”

Then the agency comes back at the end of the quarter with a request to increase your retainer due to the number of hours being worked on your account. It is a never-ending cycle: The more you increase the retainer, the more hours get dumped there.

Ignore the repeated requests for increases in the retainer based on the hours an agency is showing you until they prove that more than 35 percent of the extra hours have been spent over the retainer. That’s about the amount of waste I estimate is inherent in most agency systems. At that point, you are getting value. Instead, you could establish a procedure where work gets accounted for daily by those employees, what projects they are working on, how they are moving your brand forward, etc. Work not billed to that day cannot be accounted for later. I cannot stress this enough. This is one of the only ways to ensure your account is not a dumping ground. It also provides a reality check within the agency of how much time is actually spent on client work, and it will keep your retainer in check. Unfortunately, there is no way for you to actually check on that without access to the agency’s time reporting system directly. And that, my friend, is not something you are likely to ever get access to.

That brings me to the next way agencies are ripping you off.

Your team
Your team is designed for the agency’s efficiency, not yours. And when I say “efficiency,” I mean the ability of the agency to “bill you.” When you enter into an agreement with an agency, it is the team that is important; the team determines whether you are successful or not, not the agency. So why are you shackled to the agency’s structural inefficiency?

Teams become overly bloated with top-heavy management at agencies. “Creative directors” who often rarely even touch a piece of your business and senior account people you have never met are “on” your account, and yes, their hours – their expensive hours – add to your bill. Who ends up on your team is based on a variety of factors: the importance of your account, how “sexy” your brand is to work on, how much money you are going to spend monthly, how difficult you are to work with, how long an agreement you are willing to sign, how stressed the workload is at that agency, and the most likely factor – who is available at the time.

One of the biggest mistakes, especially with new agency-client relationships, is that the teams of people engaged in pitching your account are often not the people you will end up working with. This is actually one of my requirements for agency pitches:

Sean X Law of Agency Pitches: No more than four people from the agency in any pitch, and no one from the agency, including senior management, is allowed in the room during the pitch if they aren’t going to be involved day-to-day on the account.

Why would I want to look at the amazing creative possibilities of an account team the equivalent of Led Zeppelin in a pitch if I am going to end up with the Yanni team on my account day-to-day?

Depending on your account, you could end up being the training ground for the agency. The agency doesn’t do this on purpose. It’s just another way the system is poorly designed. People get assigned to your account, work on it for four to eight months, and then move to another account. And each time, you pay the cost. You pay the cost for a new person getting up to speed on the account, its history, brand message, etc. You’ve probably all been in agency meetings where some newbie who replaced someone who you finally got used to is interjecting ideas that are not on brand, ideas that have already been rejected, or worse, ideas that have already been produced. I have a rule here as well:

Sean X Law of Agency Replacement of People on Your Account: If the agency replaces someone on your account, the replacement should not bill hours to your account for the first three months.

The agency should bear the cost of getting someone up to speed. If the client, however, decides to remove someone on the account, this rule should only apply for the first month, even if the person is incompetent. There is always a chance — and a good one — that the problem was not with the agency but with the client. There are a lot of ways your team is constructed, but what usually doesn’t happen is for the client to pick your team. I always pick my team. Most clients do not realize that they can, and most clients cannot really assess talent correctly and probably shouldn’t. However, there are a variety of reasons why you should. If you really want to improve the work that is coming out of your agency, design your team for your account. Do not fit your account into the agency mold.

How should you choose your team?
Have the available people who can work on your account at the agency present to you, not the agency reps. Interview them individually for your account. Ask them: “Who would you like to have on your team? What team would you put together, and who would you choose out of this list?” Ask them about the other employees’ strengths and weaknesses. But what you shouldn’t do, ever, is let senior management at the agency in on these discussions. They will want to “observe.” As soon as you do that, you’ve lost. Employees will not be honest.

Sean X Law of Agency Client Teams: Do not let the agency determine your team. Always pick your own team by interviewing potential members one-on-one, and look for multi-disciplinary options among your choices.

This way, you can construct a team based on performance, client interest, ideation, and intention — and interpersonal differences will not torpedo your efforts. Agencies often overlook internal talent because they are saddled with an internal agency perception and role. I chose an email manager to be my main client contact for a $20 million account because the manager had the desire to take on the role, was constantly developing ideas on how to improve things, and already had a working knowledge of the production process on creative projects (and could therefore be more efficient). It was not important to me that this person was not an “account person,” and it shouldn’t be to you.

Who do you include in the retainer?
Your day-to-day account person is the most important person on your account. That person’s time should not be split between any other accounts, if you can afford it. You should have them lock, stock, and barrel because they are the person at the agency who has to marshal forces on your account. He or she is the person who fights for internal resources.

The next most important is a creative duo. My favorite people to include in the retainer are a strategist and production duo. Huh? Not an art director and copywriter combo? Nope. Here’s why. I find that the traditional copywriter-art director combo is from a bygone era. They have pigeon-holed their skills, are inefficient, and are best used on a limited basis for a slew of creative ideation, but not on a retainer basis. They tend to not produce the amount of useful work that a strategist and production artist duo can. Have them on your account one week a month, at most. That’s enough time to generate the ideas and creative direction necessary. But have the strategist duo on the account day-to-day, which means ideas are always flowing, as well as different ways of approaching problems.

Combined with a production artist, the strategist can crank out ideas quickly and mock them up so you can see their potential without every piece of production having a job associated with it. This vastly increases the amount and quality of the work associated with the account being produced as ideas are already in the production process.

By including a production person in your retainer, you can rapidly produce concept work, adapt to the market more quickly, produce more ideas, and see how they flesh out. Keep them cranking as much as possible and give them free reign to do so.

This dynamic trio, account, strategist, production, should always be included in your retainer. Save the creative director and copywriter for ad-hoc project work and specific ideation. Also, as much as the agency will try and include senior management on the account, avoid it. They aren’t worth it and are split with too many responsibilities. Unless they are going to be key to ideation on the account and will direct the team on a daily basis, ignore who they are. If they do not produce, keep them out of the retainer.

This frees you from one of the biggest ways agencies are ripping you off: the idea, pitch, and approval process. The traditional approach of a creative team going off, thinking of ideas, doing mock-ups, and then coming in to pitch is just an antiquated way of doing business — not quick enough to adapt, and too expensive. Sure, if you have money to burn, keep operating that way, and while your competitors realize there are much more efficient, relative, and productive ways of doing business, they will out-think and out-perform you.

Conclusion
Determining the size of your retainer, and more efficiently organizing your agency team to be productive, will help you save a considerable amount of money, while enabling your account to produce more high quality, efficient work at a fraction of the cost. And in the end, your agency will be happier and will thank you because it’s producing more work and not constantly running into the road blocks of the previous process.

Or you could just continue to let your agency rip you off.