While you might want the workplace culture of your marketing agency to be creative and casual, one area where it is always wise to be serious and professional is client contracts. It is a fact of life that accidents, mistakes, and falling-outs happen. A solid contract will protect you in these situations and help to make your expectations clear to your clients from the get-go.
Your contract can also help improve your agency’s return on investment. It does this by making sure that extra work cannot be forced in by clients and ends up costing you time and money that could be better spent elsewhere.
Although it is there to protect you, a contract does not imply that you think your new client is untrustworthy. Some clients will not have worked with agencies before and may have unrealistic expectations. Negotiating a contract with them can be a good exercise for managing those.
A good contract is one that doesn’t overlook any important details. This guide will explain what some of those details are and why they need to be included.
Areas that marketing agency contracts must cover
Once you know what areas need to be included, you can create a template contact for new clients. Many agencies choose to do this because it makes it easy to tweak the details while making sure that nothing important is overlooked.
Some crucial things to include in your contract are:
1- The duration of the contract:
There are two parts to this. The first is of course the time frame – when the work will begin and when it will end. Generally, this is decided by the client, with advice from the agency to make sure that it is actually achievable.
The second part details what materials will have been produced by the time the project ends. This can include everything from all the marketing material to any intellectual property and social media accounts.
For clarity, you should also explain whether these will be handed over to the client once the final payment has been made and the project has ended. Clients are likely to expect this, so it is especially important to include it in the contract if it is something you do not offer. That way you can avoid legal headaches later.
2- A detailed scope of work:
No detail is too small to include in this section, and it cannot be too long. It should contain within it the scope of services, which is where you will outline all of the tasks you will undertake for your client, as well as contingencies such as the number of revisions a client can request.
It should define any ambiguous terms, for example, “managing social media marketing,” and it should outline how often and in what forms you plan to communicate with clients. Some agencies even go as far as to detail how quickly they will respond to calls and messages.
3- The payment schedule:
Similar to the contract duration, the payment schedule is more than just the dates when payments should be made. It should also explain how the client should make payments, whether they are refundable and if so, under what circumstances, and what the penalties are for late payments. Being clear about these things from the start is the best way to avoid the uncomfortable situation of chasing up clients over missing payments.
You may wish to create different contract templates based on how you plan to bill clients. For example, if a client hires you for a specific project then you might ask for some portion of the money upfront and the rest on completion, or you might bill them when certain milestones have been achieved along the way to completion.
4- Conditions for additional work:
The amount of work the client wants you to do when you first prepare a contract for them often ends up changing as things progress. Unless you want to end up doing extra work for free, it is important to outline your conditions for clients who need you to do more than originally agreed.
The most common condition for additional work is that it be covered by a separate contract and under a separate rate, which is to be negotiated between the agency and client.
5- Termination:
Both parties want to have the option to walk away if things are not working out, but neither wants to be badly hurt if the other suddenly pulls the plug. For these reasons, it is important to negotiate conditions for terminating the contract.
This section should contain the amount of notice that must be given by the party who wants to end the agreement, how the notice should be given, and how any outstanding work will be resolved.
These are not the only essentials to include in your contract, but they are the most relevant for marketing agencies and they are the easiest parts to prepare yourself. Other necessities such as penalties for breaches of contract and indemnity clauses are more complicated and are best left to legal professionals.
Ingrid Maldine is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Ingrid’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Ingrid has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Ingrid has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.
