“You shop. We drop.”
Developed about ten years ago to promote their then-new grocery home-delivery service, Tesco’s “You shop. We drop” is one of the best slogans of recent years. You see it every time you pass one of their lorries on the motorway, or your neighbours get a delivery. It makes several million impressions each day across the UK.
But: what did it cost them?
It would be difficult to quantify the value to Tesco of such a powerful and effective slogan. And yet, someone, somewhere, did. Someone in an agency billed Tesco for that brilliant piece of work. But I reckon they didn’t charge near enough what it’s true value was. Which brings us to today’s topic: “value billing”.
Working in PR and marketing, every now and then you or one of your team has a stroke of brilliance: a bit of work, a slogan or a strategy, that is second-to-none.
Unless you’ve agreed otherwise, billing the client for that brilliant piece of work means simply billing them the agreed hourly rate for your services. In certain instances, however, “value-billing” is a much better proposition. Value billing is where the amount billed is based on the value of the service (or information) instead of the number of hours spent.
Saving you thousands: what’s it worth?
Let’s say your accountant gives you some advice that saves you several thousand pounds. You would not mind getting a bill for a few thousand in that instance, even if it only took them a few minutes to pass along the information. You’re paying for the value of the information, not the time it took to generate it.
Value-billing is a practise adopted by some law firms and accounting firms, and the occasional PR or marketing consultancy. It’s described in detail in the book Winning Alternatives to the Billable Hour: Strategies that Work by Mark A. Robertson and James A. Calloway (2008: American Bar Association).
The important thing if you are considering adopting value billing is to be certain that you can deliver the goods. Once you are confident of that, take steps to put an arrangement in place to bill on a value-basis.
I have come up with dozens of slogans for clients and campaigns, some of them still being used more than a dozen years later. Tesco has gotten millions of pounds of value from their “You shop. We drop” slogan, and I hope one day to come up with a cracker like that. Most of all, though, I hope I’m working on a “value-billing” basis when I do!