TS: Let me introduce Rhonda Contreas, my guest today. Rhonda has served as a Principal at The Richard Group for the last 18 years in Dallas, Texas. For the last four years, she has served on the Leadership Team that has subsequently refounded the agency under the new name TRG. Rhonda has a very interesting job at TRG, she is the “Chief Collaboration Officer,” it’s her role to amplify best practices and remove barriers to collaboration across the agency.
Rhonda, you’ve been at TRG now for 18 years. You’ve seen a lot of change in that time, not only in the agency, but in the business in general. I’d love to find out more about TRG and the work you’ve done there.
RC: Of course! So just a little introduction for TRG. We’re one of the largest independent agencies in the United States. We have been around almost five decades and we have worked with some pretty incredible iconic brands like Chick Fil A, Charles Schwab, Home Depot, Ram Trucks, Dave’s Killer Bread, National Vision… the list goes on and on. Over time, I’ve seen tremendous change in how the agency operates and what our ultimate goals are.
Now is an incredible time to be in advertising because of the evidence-based principles that have come to light, the idea of unified marketing effectiveness theory and the laws and levers that we can pull to help our clients grow their business.
We are students of that. We’re students of advertising effectiveness. The way that we approach this is that we see ourselves as being in the memory making business. We believe that more than activations or ads or media plans, our goal as an agency partner is to create long lasting memories in the minds of consumers, which ultimately, moves markets. This is because, when a consumer has a want or a need further down the line, they remember our clients brands first.
Lots has changed over the years, but right now we are 100% embracing the idea of advertising effectiveness and the idea that memories move markets.
TS: I love that. Memories move markets. Now advertising effectiveness, you need to be profitable to be a great business and to do that for your clients. I’d love to know more about how you’ve approached pricing at TRG and the journey today. I know in your role as Chief Collaboration Officer, that this is a key thing. So could you tell us a little bit about that?
RC: As an agency in general, we have a pretty forward looking leadership team in place, one which has been creating significant change in the agency for the last 4 years or so.
Turning to pricing specifically, we’ve been on a journey towards output based or deliverable based pricing for about two and a half years now.
Our goal is to change the pricing conversation with our clients.
We want to move away from this idea that a deliverable is only as valuable as the hours and dollars required to create it, whether that’s creative or strategy or media. We want to focus instead on the value that those deliverables bring to our clients’ business.
So again, it’s not about the fact that it took me, you know, 5 hours at $100 an hour. It’s about what that deliverable does for our clients in terms of creating ROI and business growth.
Again, we started on that about two and a half years ago. We were making some pretty solid progress towards that goal, but we realized, somewhere along the way that we needed a system, a platform or a tool that would enable the change that we were trying to make.
TS: It always is a challenge when you’re trying to do something different in any business. So can you tell us a little bit more about the challenges you faced specifically? I’d love to know about how you approach this whole movement towards a different way to price.
RC: So, I think some important context is that TRG is an agency that has an entrepreneurial flat organizational structure.
Our client management function is decentralized, meaning we have multiple principals who are responsible for pricing, product delivery, client service, running the client team, all of the all of the things that relate to client management.
As such, like very many agencies, when we started our pricing journey, we were using Excel to create scopes and to figure out the hours and dollars that we would charge for those scopes.
As anybody who’s worked with Excel knows, that can lead to accuracy challenges and it can lead to versioning challenges. It’s just not the most efficient way to operate, both on the client level, but also in terms of our ability to aggregate scopes and see what’s going on enterprise wide in terms of revenue, resources etc.
I figured we’ve got to get our scopes out of Excel and we’ve got to get them in a centralized place so that we have a better sense of where we stand, then we can be more effective in terms of trying to create the change.
So I turned to the 4As for help (a great place to start for agencies) and I discovered a webinar featuring Tracey and SCOPE Better. The slides that were shown sort of resonated with me as a solution for some of the implementation challenges that we were having around deliverable based pricing.
TS: I think what would be really great is if you can talk to us about what’s happened since you’ve implemented SCOPE Better, the move into value based pricing and any nuggets that you can share from your journey specifically.
RC: You know, any change requires change management. In our case, when it came to value based pricing and the SCOPE Better implementation specifically, we needed to bring our principals and our brand management group along. They were primarily the ones that were responsible for that function.
Now for us at TRG, at that point, we had already created a lot of change in our company. So in some ways, maybe it was easier and yet in others, it was more complicated as we were introducing yet another change.
For me, I don’t think we could have done it, could not have implemented the tool if it were not for SCOPE Better’s Professional Services Team. I have a team of two people, who, with the help of the SCOPE Better PS Team, configured it, integrated it with our agency management system and taught our brand management team to use it in a pretty short period, about 3 or 4 months.
During that time, we had lots of decision making in the back end in terms of how exactly we wanted to price the ‘products’ that we wanted to sell. The SCOPE Better team was then amazing in terms of helping us to actually migrate all of that into the platform, so it’s a usable system that our brand management team understands how to use.
TS: Fantastic. I know that Charlotte who heads up our Professional Services Team will be delighted to hear that, Rhonda. I’ve got to ask another question. If we deep dive into it, what are the key benefits that you’ve seen to date from implementing the SCOPE Better platform? What has it given you at TRG?
RC: The biggest benefit for us is having a centralized scoping system, where every estimate lives in one place. That has allowed us to be more consistent in the way that we scope, in the way that we price and in the way that we staff any given project.
And just to be clear, because this is something that we’ve talked about a lot internally, SCOPE Better doesn’t set the pricing. It is a tool for us to set pricing. It gives us a place to start and we are able adjust based on the client’s need, their business and the scope of what they’re asking us to do.
The other thing that SCOPE Better does that’s really important to us, is allowing for both deliverable based pricing as well as cost based pricing, because we’re always somewhere in the middle and we want to accomplish what our clients want for us to accomplish. So, if there’s an insistence on input based pricing, of course, we still do that. SCOPE Better lets us do both.
It also lets us compare scopes and project types. It feeds it into resource planning, into our project management system, and, ultimately, it feeds back into SCOPE Better so that we have one source for reconciliations, which were all manual when we started this whole process. We’re much much happier with the time that it takes to do reconciliations these days. So yeah, lots of benefits, lots of helpful pieces to the system.
TS: Final question Rhonda, how do you see all of this supporting TRG in the future? What does the future look like for TRG with pricing?
RC: The thing that I’ve learned through this journey is that pricing is actually a job that is never finished. From a collaboration perspective, it’s not something that I can just mark off my list and move on from. We have to constantly innovate, package, test, learn, optimize our products and services on behalf of our clients as their needs change.
I think really the most important desired future state or difference for TRG is moving further away from inputs and moving closer towards the value of the outputs (the deliverables) when it comes to pricing. As well as having SCOPE Better underpinning this as a platform that we use right across the board with our clients.
TS: Thank you Rhonda. Very insightful. Before we finish up, Is there anything else that you’d like to add?
RC: I think for anyone who’s in the advertising industry and is paying attention to what’s happening in the industry, pricing and profitability is a huge topic right now. The other one is AI, and, ultimately, those two sort of wind up impacting each other.
If you’re pricing based on the time that it takes and AI makes the job more efficient, then you can be pricing yourself down rather versus pricing yourself up or or becoming more profitable.
So I just think it’s something that’s worth looking at from an agency operation standpoint, regardless of what situation you’re in.
TS: 100%! I mean, that’s a whole other conversation in itself, isn’t it? The talk around pricing and securing the upside of the AI journey? Rhonda, I’m so grateful for you taking part in this interview and sharing your journey on pricing at TRG. If anyone reading wants to know more, can they reach out to you? How could they get a hold of you?
RC: Sure. Absolutely. You know, I am no expert, I’m learning on this journey as we go, but I’m happy to share my experience with SCOPE Better or with deliverable based pricing to help more agencies normalize this idea because ultimately, I think the more of us that normalize it, the easier it is for adoption in a new business situation or with clients.
I would say connect with me on LinkedIn and let me know what your questions are, and I’d be more than to have a chat.
TS: Rhonda Contreras from TRG, thank you very, very much.
