How agencies can avoid scope creep with client projects (featuring Ben Aston)

How to keep work work on track and profitable.
Ben Aston

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Scope creep and over-servicing clients erodes profitability and many — if not most — agencies. Keeping work within the agreed parameters will not only make projects better, it will ensure that they contribute to the financial health of the business.

As founder of The Digital Project Manager, Ben Aston knows all about successful agency project management. He joins Chip to discuss techniques to avoid scope creep — starting even before a prospect becomes a client.

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Transcript

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

CHIP: Hello, and welcome to another episode of the Chats with Chip Podcast. I am happy to have you listeners here with me today. And I am even happier to have Ben Aston the founder of The Digital Project Manager as my guest today. Welcome to the show, Ben.

BEN: Well, thank you very much.

CHIP: It is good to have you here. And we’re going to be creepy today. Or at least tell people how not to be creepy. Well, no, not really. We’re going to talk about scope creep. But now I’ve got the listeners attention, at least right. So hopefully, you will continue listening for the next 20 to 25 minutes and learn how you can apply some useful tactics to your own agency in order to improve its profitability. But before we do that, Ben, why don’t you share a little bit about yourself?

BEN: Yeah, thanks. So, yeah, my career started off working in advertising agencies in the UK. I was actually a intern at Publicis, and lo and yeah, I spent 15 years working in the advertising and digital industry and most recently was working an agency called third and grove based down in the States. But yeah, for 15 years, spent my time working in agencies on the account side and also on the project management side as well. So, yeah, it’s been an agency kind of ride for me. And the digital project manager is a fantastic resource, really, for anyone in in any kind of agency. Obviously, there’s a special focus on digital, but I think a lot of the same principles apply elsewhere. So if you’re not already following Ben’s work on the digital project manager, I strongly encourage it because you’ll find lots of useful things and, you know, we’ll just scratched the surface. I think today in our discussion about scope creep. Yeah.

CHIP: Alright, so let’s let’s talk about scope creep. I think scope creep is is is something that has a dramatic impact on the profitability or lack thereof of most agencies. The agency world is full of people pleasers, and you know, you always want to keep your clients happy, but how do you how do you keep your clients happy, but also Keep your projects within scope so that you can generate the kinds of profit margins that you need to have in order to be a successful sustainable business.

BEN: Yeah, it’s tricky, isn’t it? And I think, I think when particularly, is this tension between winning business and retaining business? And when we try and win business, I think often we, you know, we do we’re selling a dream, we’re selling a tree of, you know, benefits realize whether or not that through, you know, additional sales, signups, whatever it is, we’re selling a dream. And in order to make that dream palatable, we tend to put a price tag on that dream that’s lower than we know it is realistically. And I think that’s probably where the problems start. It’s, we’re under selling because we’re not confident enough in either our ability to deliver or the the clients ability to afford how much it really costs. So I think the first thing to talk about is again, Well, how do you manage this tension between new business or business development and project management in that in that RFP stage or that pitching stage, so that we’re not selling dreams that we can’t, we can’t afford actually to deliver. Because if we start thinking about our bottom line, and the profitability that we therefore are not going to make because simply we’re not charging enough for it.

CHIP: And I think I think the selling the dream is is really a fantastic way of thinking about it because it when you really look at the agency client relationship, particularly in that business development stage, there’s a lot of similarities to to dating, you know, you you’re you’re at that point where everybody’s you know, presenting their their best side they’re there, it’s all optimism, you haven’t gotten into well the fact you know, you keep a messy house or apartment or you know, all of the the downsides and so you know, you both sides are coming in with

lot of excitement, positive thinking, high expectations. And so the question is to, or the solution to scope creep starts with getting it right at that stage and not allowing you to over promise to underprice to, to really miss the mark in that specification stage. Right?

BEN: Yeah. And I think the key really is managing expectations right at the beginning of the project. And if you can’t afford to, let’s say, let’s play with some numbers. So if we’re, if we’re saying to the client, hey, yep, we can do this project for $50,000. And you thinking, hey, well, it’s a bit of a loss leader, but this is a great client. And if we get them in at 50 grand, will be able to, you know, sell them additional projects later. They’ve got, you know, they’re talking about this big vision. They’re saying they’ve got lots of money. So you say, Okay, well that’s 50 K, we know it’s 100 k projects, but let’s do 50 k, then we will definitely win it. So then we set the expectation that of what we can Do for $50,000 right? And that’s where things start coming on done. Rather than saying, hey, we’ll pay this is $100,000 project. And I hope you can afford that if you can’t afford that, that’s fine because it, you know, any less than that is not gonna make any sense for us. And not engaging in projects. If there’s on this kind of false pretense, like, you know, we bought putting too much makeup on and the big reveal when we take our makeup off when I actually, this is the real us, we actually way more expensive than you thought. And we can’t deliver $50,000 projects every time because we lose too much money. Business,

CHIP: right. And loss leaders don’t generally work in the agency space. I mean, we’re not selling disposable razors where you know, you can, you can sell the handle cheap because you’ll make it up on the blades for the most part of the agency spaces. As you’ve said, you know, you’ve now set the expectation that this is a $50,000 project. And so when they want to do more work with you, what are they going to expect from That they’re going to get the same amount of work for $50,000. And so all you’ve done is mispriced your widget from the get go. So even to the extent that you are able to generate additional revenue, you’re going to get it at that same cost per unit of whatever it is whether you’re selling ours or projects or what have you and your agency. Yeah, so bad idea. So get get the specifications right out of the gate, set the expectations correctly. And and that’s step one to managing scope creep. But of course, it doesn’t end there. Because you’re at that point, you’re you’re diving into the project. And frankly, in a lot of agencies, they end up doing the specifications before they have full information. So there’s some there’s some wiggle room in there. And I think that’s one of the other challenges. But so how do you as you actually start taking on the project, how do you in those early stages of the actual relationship? How do you start moving it towards the right direction on scope creep still? Yeah, so

BEN: I think I think it just kind of we’re wrapping up that part of the project.

So I think I will get the project manager involved in agreeing that it’s $100,000 projects, and they’re doing some some proper estimation happening. So that we think, Okay, well, maybe this is $100,000 projects. So what we’re going to go back to the client with is saying, Hey, we think this is 100. Let’s give a 25% range. So we think this is probably 100 to $125,000 project. And if you want us to proceed, well, let’s go ahead and do a discovery phase. If this is a slightly, you know, vague brief, so that we can define this a bit more fully. Now for some, like marketing campaign kind of projects. The deliverables are pretty fixed. And you know, we know how much time it’s going to take us to do certain things because we do it so often. But if we’re doing more of a technical build, sometimes it’s a bit more ambiguous. Or it might be something that’s using some technology that we’ve not used before, or we’re trying to develop a creative asset that we don’t know we don’t know how much illustrators might cost or whatever. It might So I think it’s always good giving a range at the beginning of the project and then saying, Hey, we’re going to tighten up this budget for you as we progress through the project. And I think this is where the planning horizon is also really important thinking, Okay, well, I want to give you this a firm cost $125,000 for the entire project. But let’s be honest, we haven’t even fully fleshed out the brief yet. So let’s flesh out the brief. Why don’t you pay us $10,000 for that discovery and planning phase, and then our planning horizon how far ahead in the project that we can see and properly estimate and plan for becomes more visible and then we can plan for the next phases of the project. So this more gated approach to giving estimates and giving, you know, definition around Okay, this is what the deliverables are going to be. These are the assumptions around that. Then we can do it in a much more controlled way where everyone kind of managing expectations as we go rather than committing to everything up front, and not really defining what the deliverables are going to be or any assumptions around those deliverables.

CHIP: And then I think your suggestion to start with paid discovery is a really good idea for most agency client relationships, because it, it does two things. First of all, it allows you to get the scope, right and make sure that the solution matches up with what the business challenge actually is. And the second is it gives you a chance to start working with the client and you have a better expectation of how they’re going to behave throughout the relationship. So, you know, there are some clients who are very disciplined and they, you know, they live within whatever guideposts you’ve set up. And so scope creep tends to be less of an issue with them, whereas others, you know, they give you something vague and then they just kind of keep asking and keep asking and so the projects going to mushroom. So you learn a tremendous amount that will help you price better. The final project or subsequent projects if you start with something small and focused.

BEN: Yeah, and I think being small and focused is is the key for sure. Focused means that we have to create proper briefs. And I think often, again, another cause of scope creep is loose briefs. And it might be that the clients not sure exactly what they want. Or it might be that we haven’t interpreted what they want very clearly. But it comes down to having that really clear brief. And it might Yeah, it might be the beginning of the project. The brief is unclear. But the goal should be that, you know, the brief is super, super clear. So there’s no there can be no misinterpretation of what those final deliverables and any assumptions around them could be. Because then we can say, Hey, we did it. And I think often when we’re doing creative projects, scope group can happen when the brief isn’t good enough. So they can be misinterpretation of whether or not we hit the brief or not. And that’s a you know, a classic example of scope creep, that we do the creative work, the client reviews it and says, Ah, well, no That’s not right. You haven’t you haven’t understood what I wanted. And so in that scenario, either the brief wasn’t good enough. And or maybe the word wasn’t good enough. And that is then on us as an agency to sort it out. But if we can get that brief, right, we can prevent a lot of scope creep?

CHIP: Well, I think there are things that you can listen for in that process where you’re having that back and forth dialogue with the client and trying to figure out, you’re trying to understand their brief and and if you are the client hear things like, don’t worry about it, we’ll figure it out. Or, you know, we, you know, we’ll we’ll sort that out later or anything like that, that those are the things you should be hearing in your head and saying, we don’t have a meeting of the minds here. We really need to pursue that and and solve it now and not once the projects already underway.

BEN: Yeah, definitely. And also with that, trying to kind of adding additional components, where, you know, let’s Yeah, let’s sort out as we go kind of thing particularly that can happen with you know design standards and you know if if a brand is doesn’t have a particularly strong visual identity and they’re not really sure how it’s then executed in different platforms or in different places that then can cause scope creep when you’re actually creating the visual identity alongside whatever project it is you’re trying to do. Right so be be be aware of these kind of stalking brief where you know, they come to you saying hey, let’s run a campaign and then you realize that actually there’s a whole load of other work you need to do alongside that

CHIP: and it’s it’s tough because is on the the agency side you’re always sitting there saying, you know, I want to get more revenue I want to close this business as quickly as possible. So you’re you’re sort of putting pressure on yourself and your team to to go out and get as big a piece of the pie as quickly as possible. But you know, if you if you don’t think it out intelligently, you may have won the business but have lost the war. Yeah,

BEN: yeah. And the key is just dissecting that dissecting what they’re asking for and saying, Okay, well, it looks like here we’ve got one part of the project, which is let’s establish the visual identity, let’s get you some brand guidelines, then we can do the next thing that you actually asked for, which is doing the campaign. And let’s just do this step by step.

CHIP: Right. And I think you made a great point a couple minutes ago to which is to make sure that the project manager, the person who is going to be in charge of executing it, so whether that’s, you know, a project manager and account manager, however your agency is set up, they need to be involved from this process in the business development process. You can’t have business development than hand off blindly to your your actual implementation teams, they need to be part of the sales process so that there is a meeting of the minds even internally within your agency about what’s going to be done.

BEN: Yeah, definitely. Yeah, that’s nice. That is that is key. And then that stops the blame game as well. That kind of tension between an attempt ation for business development to say hey, look We’ll do 50 grand and then say to the implementation team, guys, you’ve just got to figure it out, right? 50 k, just do what you can. And we just need 50 k right now. So go Good luck,

CHIP: right. And most agencies, the, you know, whoever’s business development is also senior management. And so there, then the people putting pressure on Well, you need to live within this budget that I agreed to. So it’s, it becomes sort of a never ending conflict with the implementation team. So you really want to get that right from the start, and it will improve things, both in terms of the business relationship with the client, but also your internal talent management issues that you may have. Yeah, definitely. Yeah. Alright, so so let’s let’s pivot a little bit if we can to actually the management of the project. Because, you know, the, as hard as we try to make sure that we’ve got the specifications, right as good a job as we’re doing doing paid discovery, there’s still going to be in most projects that pressure to to, for the client to get just a little bit more and they need makers, it’s not intentional. So I’m not this is not meant to be a slight to clients, they’ll often ask for things and not realize that they’re out of scope. Yeah. So how do you handle that?

BEN: Yeah. So I think, again, we we’ve talked about the brief and then an output as well, from that discovery and planning phase for me is that estimate the timeline and the statement of work. So with defining the scope in a document, and, and and we’re saying, hey, these, this is, what the deliverables are going to be. These are the assumptions we’ve made around those deliverables. And in there, we describe the process as well. So it might be that sometimes we don’t know what the deliverables are going to be. We can’t be that exact. But we can describe the process that we’re going to go through and limit the process. So we can say, hey, at the end of this design phase, we’re going to design maybe, you know, up to five design concepts for an ad. And following that we could then going to take them and finalize one and each round That design process has two rounds of approval and feedback. And the final outputs are going to be, you know, 10. jpg, or whatever it might be, right? But we’re trying to put numbers against everything and limit the amount that we have exposure limit the amount of work that we’re committing to. But if we can’t put numbers because it is not entirely clear, we could at least say, hey, well, we’re going to do we’re going to time box it then. So we’re going to spend up to 40 hours on design. And we’re going to allow for up to 24 hours of a men’s after feedbacks provided and we say, Hey, we’re going to go through this process. And this is what’s going to happen. That gives them clarity around what they’re paying for. And I think scope creep happens is a communication thing. Like you say it’s not always intentional, but it happens when there’s a misunderstanding around what’s going to be done and what’s included and what’s not. So, co define that in a document and in a state Work is really important. And then when we when the client comes to us and says, Hey, but I, we forgot that we needed this thing. Can you just squeeze it in? Obviously, the temptation is always to say yes. Because we like saying yes, because we want our clients to be happy. But that’s the time when I would say, Okay, well, let’s use a change request. And it might not mean that they have to pay any more money. But that statement of work that defined what was going to be done now needs to be updated. So yes, we’re using documentation and it feels it can feel like hey, this is heavy and cumbersome. But the advantage of it is that it gives us them something to go back to, when they’re when the clients changing things as they go. And this is always one of the things where, you know, at the beginning of the projects, you frame it as Hey, we hope that we’ll never have to have an argument about this, but this is just a way for us to align. And right this is the way for us to make sure that we’re both seeing eye to eye and they are excellent citations are matched. And then you taught them through that statement of work. And that becomes that living document where that includes the timeline, the milestones, the budget, the billing schedule, everything is in that one document. That’s the project in a document. And I find that really helpful in keeping the client then on track once the project started.

CHIP: And I think you just made a really great point there too, which is you need to do this from the very beginning. So you can’t wait until you’re just exasperated by all of the requests that are out of scope, you really need to just start right from the get go and set that expectation with the client that if we’re going to do something out of scope, we’re going to document it, we’re going to, you know, as you say, whether or not you explicitly charge for it, there needs to be that meeting of the mind so that this doesn’t become something that you know, three, four months down the road into a relationship, you’re suddenly coming and say, Well, you’ve now asked for 27 things that are out of scope, and we’re going to have to charge you for it all are you know, because that builds tension in the relationship that that isn’t going to be as Hard to deal with if you’ve been having this constant communication along the way.

BEN: Yeah, yeah, the key there is managing those expectations right from the start, hey, this is how we work. We’re trying to find things as much as we possibly can. And when they change, well, then we’ll update the statement of work.

BEN: Now, obviously, it goes both ways, right? So there’s, there are times when, in the projects, we encounter things that we have to change, you know, maybe we estimated things incorrectly. And then, again, though, we then get to the client and say, Hey, really sorry, we didn’t estimate this properly. And I think that’s the world one thing I wanted to mention was including contingency budgets, or risk or change budgets, as part of the project as well. So remember, right at the beginning, I talked about, hey, well, this is $100,000 project, but let’s say 100 to $125,000. giving yourself a bit of room and trying to get a bit More budget right from the client right up front of the project is a lot easier than then having to midway through the project to say, Hey, can we have a little bit more money and to get this finished. So I would always have the difficult conversation before the projects even started to buy yourself a bit of extra room. Because that’s once they’ve got that, once your client has got that, check out all that sign off internally, they’ve carved out that bit of budget, it’s incredibly hard for them to then go back and ask for more. But, but right at the beginning, an extra 1020 30% maybe is is easier for them to get?

CHIP: Well. And I think that that it’s important when agencies are doing their pricing, they need to figure out what their what their resource investment is going to be and use that as the floor for their pricing. And then as you say, building that continuously, and you need to continue to see regardless of the kind of work that you’re doing. So obviously, we’ve been talking a lot about the digital space today because that’s obviously your expert expertise fan, but it doesn’t matter. You’re if you’re doing Media Relations or marketing or whatever, anything that you’re estimating in the biz dev stage, you’re probably going to underestimate the amount of work it’s actually going to take. Because there’s always hiccups. There’s always rewrites, there’s always revisions. And so if, if you’re setting that internally and working it into your pricing, you then have that wiggle room to work and not, you know, be sort of having the client feel like they’re being nickeled and dimed along the way and you will make mistakes yourself. And it’s much more difficult to go to a client and say, yeah, we goofed on this, it’s going to take us longer, but you really want is going to have to pay for it. So so there are going to be some costs, you’re going to end up having to eat regardless just for good client relations. And so if you built that cushion, you’re in much better position to do that. Yeah, yeah, definitely. So then, you know, we’re, I want to be respectful of your time here. And I know we’re sort of running short on where we are. But, you know, one of the things that I think would also be interesting to get your perspective on since you really look at this from a project management standpoint is how do you Use after action reviews or other things like that, or do you in order to to look at scope creep and how you manage it better for the future? What whether it’s with that client or another one? Because, you know, I think, as we’ve sort of talked about so far on this episode, a lot of it comes from the very beginning of the project. Some of it comes from what you’re doing in the middle. But I think there’s also valuable lessons that can be learned after each project is complete, right?

BEN: Yeah. And I think that’s why time tracking is so important. And I’m, I’m a massive, massive fan of time tracking, even though it’s really uncool. And I think when you talk about often when I talk to organizations as well, and you know, marketing departments in an organization, who are overwhelmed with the amount of work that they have to do, because people just keep on giving them more and more stuff to do. I always talk about the importance of time sheets, because if we don’t have time sheets, we don’t know who worked on what, at what stage of the project. So yeah, being able to track throughout the project. How much time is being worked on, that gives us an idea of profit. Ability against or at least tracking against the estimates. And so then we can work out. Okay, what department is spending more time than they’re estimating what phase of the project is taking more time than than we think it does when we estimate it. So having that data is incredibly important and valuable, and that will massively increase your chances of being profitable. If after three projects, you have to look back and say, okay, designs always going over budget. Is that because we’re not managing the process properly? Is that because it’s taking longer than we think it takes? Or is it because we gold plating internally, we’re just, you know, we is kind of done, but then our creative directors coming in and saying, but I want to win an award for this. So we’re going to spend an additional 40 hours on it and make it amazing. I’m happy to have do that analysis, I think is is really valuable. So yeah, time tracking and then post reviews of Really important.

CHIP: And time tracking is absolutely so critical. And you made a point that I make frequently on this show, which is the importance of helping your team understand why time sheets matter, because you say they’re not cool. They’re not the kind of thing that that staff say, Oh, cool. I get to do time sheets today. This is great. But But if you but if you’re explaining to them that by uncovering what they’re spending time on, you can then figure out how better to spec projects or how to give them the resources that they need or how to better understand yet really does take 10 hours to do this, or 15 hours to do that. And it will improve the quality of life that they have as an employee if you as a manager getting the accurate information out of those timesheets, so they’re absolutely essential all the way around. Definitely. Yeah. Well, so are there. Are there any other pointers that you’d give on scope creep before we wrap up this episode?

BEN: Yeah, I think I think the only other thing I would mention is just though, you know, we’ve been talking about a very kind of stuff Engagement model where, you know, we define the deliverables, and we estimate against it. And then we try and deliver it against that estimate. And we try and keep to that scope. But obviously, another great way of controlling scope creep, if you can get away with it, I’ll say, is just an entirely different engagement model where you’re, where you’re just selling units of effort. So where you just selling the team, and you say, Okay, well, let’s sell in, you know, our core team of whoever you call them apart, or whatever it is, and you sell the pod for a sprint, like a two week period. And then you say, Okay, well, we think this kind of project is probably, you know, a four to six week or kind of project.

And so we just sell you for that time. There’s no real fixed scope, we just have an idea of the project. And then we kind of try and deliver value at the end of each sprint and collaborate closely with the client and I think this kind of engagement models really good when the client brief is really vague. And they’re not entirely sure what they want. But that can really lower the risk for the agency in terms of, you know, they’re not committing to delivering a particular amount of scope before for any money. They’re just saying, hey, we’ve got the team here that you need. Let’s collaborate together on this. And that more agile engagement model can be great. If you can get a client to agree to that, which it requires a certain type of client, you have that amount of trust in your ability.

CHIP: yeah. Yeah. And I think it’s, it’s it’s great to think creatively about those things. And I guess I would say to, to keep this episode within scope. Maybe we can do another show in the future and talk about some of those alternate models because I think it is helpful for agencies to think about, perhaps how they’re, they’re selling their services and whether there are different more creative ways that they can do it. That will give the client the results that they want while also making sure that the the agencies are as profitable as possible. And frankly, Ben, one of the good things is you’ve got all sorts of content on your site that will help listeners if they’re interested in exploring some of these topics more. So how can folks find out more if they’re interested?

BEN: Yeah, so head to the digital project manager calm and we’re on a mission to help people deliver projects better, and how project managers and teams succeed with their projects. And so, you’ll find on the digital project management training, where we offer a seven week course, in everything that you need to know about managing projects properly, and we offer a membership as well where you’ll find all the templates, resources, and monthly workshops that will really help you level up your pm game whether or not you’re PM yourself, or you just are the one that finds yourself leading projects. There’s stacks of resources there for you.

CHIP: Well, great, Ben, this has been very enlightening and I I encourage everyone to check out the digital project manager website for additional information and training because it will, it will improve how you serve your clients and how you run your business. So, again, my guest today has been Ben Aston the founder of the Digital Project Manager.