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Making contracts and setting the right expectations with clients is a way to be successful with them. In this week’s session, host Julie F Bacchini sought PPCers views on the importance of contracts, do they outline anything special in their contracts, how do they go about setting the right expectation with their clients on a new project, what is the biggest challenge they face while setting the expectations, and more.

Here is the screencap:

Q1: Let’s start with contracts. Do you use formal contracts? If so, how detailed are they? Were they reviewed or created by an attorney?

We use formal contracts that are probably more detailed than some & less detailed than others. We utilized an attorney service to create it, and we make minor custom adjustments based on the specific new client & our arrangement, though typically not many changes. @PPCKirk

We do! They’re standardized and were created before my time, so not exactly sure how. @amaliaefowler

100% yes! There needs to be protections for both the client and the practitioner. They typically outline scope of work, fee structure, liability (or lack there of), and term minimums (because yes, I believe in 6+ month engagements). @navahf

Since I work for an agency and am more so a practitioner, I don’t normally have to touch or look at the contracts. But I felt inclined to respond to this question anyway, because I love. @BrettBodofsky

YES I use contracts every single time. YES, they are quite detailed. The original contract document was lawyer generated. I have added to it over the years as I realize it was missing things I wanted spelled out specifically. @NeptuneMoon

Whrn we begin we have a basic memorandum of understanding for the first period of a project (one month to one calendar quarter max). We’ve had the same attorney reviewed language for over a decade and then customize each to the scope. @ynotweb

Yes, very detailed, created by an attorney – although usually the details of the project are edited by the account team. @beyondthepaid

A1: Yes. I use contracts for every new client. but I have found they aren’t detailed/specific enough so I have on my list to rework the bases for each contract & then I can customize as necessary. Great timing for this subject for me. @selley2134

The few times I didn’t (either because it was work for a friend or the client claimed they just wanted a “few things done”) I ALWAYS regretted it. Proposify is a great catch-all tool, and if you’re ok cutting into your margins, paypal has great solutions too. @navahf

Yes formal contracts written by attorneys so that everything is fair and clearly stated for all stakeholders. @PPCKenChang

I even use a simple contract for freelance/side work – I don’t do a lot of this anymore, but always have a contract if I do. @beyondthepaid

Yes, not something I’m directly involved with creating/managing but we use pretty involved contracts that accommodate for every stipulation you can think of. Our agency owner’s husband is an attorney, so everything is definitely reviewed by an attorney! @timothyjjensen

Yes, our statements of work outline fees and our meeting frequency, general guidelines around expected deliverables! @sonika_chandra

We sure do. I got them drawn up a while ago and I’ll have a lawyer review them about once a year just to make sure they’re still okay + update. @ameetkhabra

We do have contracts and use @Proposify (CANADIAN TECH) to make it happen. Our proposal and contract all in one doc. @duanebrown

Q2: Is there anything special that you make sure to outline specifically in your contracts? And if so, why?

There is not but I *wish* we had a pause clause and communication specifications a la @NeptuneMoon. I do like that we outline scope deeply as well as timelines, and illustrate additional costs for leaving scope. @amaliaefowler

Scope of work but also what is *not* included in our work so it’s clear. Liability No guarantee – I had to file a suit against a client once so this one is super duper important. @ameetkhabra

Number of meetings / reporting candence. I have found this is where clients tend to scope creep the most so having it clearly written out at the beginning allows you to keep them in check or upsell. @selley2134

SCOPE OF WORK!!!!!!!! If your agreement does not include scope of work and fee structures for upsell, you’re giving your clients free reign to sign on at the lowest level, and feel entitled to all the work. I also include client responsibilities (site access, etc.) @navahf

Trademark and Copyright information. We rely on our clients to follow the law when they provide information and creatives. @ynotweb

We have a clause stipulating that all tracking needs to be set up properly for us to do our work. Helps protect if there is an issue with them not having proper setup to track leads due to dev problems on their end. @timothyjjensen

I like to call out how we calculate Margins with a simple math formula in the contact; people sometimes get confused about Margins vs Markups. @PPCKenChang

We make sure that we outline scope and timelines within our contracts so that everyone has clear expectations as we begin to work together. Snaptech also doesn’t believe in hidden fees – all charges are clear within our contracts. @snaptechmktg

In addition to detailed scope of work and billing arrangements and EXCLUSIONS, I have: Standard response times and working hours defined (including time zone). Language for if a client drops off the face of the earth and is. non responsive for defined period. @NeptuneMoon

We also include hourly rates for work that’s out of scope. @beyondthepaid

I also include assumptions, which include things like: What I will have access to and at what permission levels That pricing assumes no technical issues (and if there are it costs extra for me to figure them out – like tracking, etc.) @NeptuneMoon

Ahhh yes, Exclusions. Very important. @ynotweb

Fees and how they break down. If something changes on clients end, how fees change for our ecom & DTC clients. No contract is perfect but we try to re-state and say all our expectations up front. i.e. a delay on client end is a delay on our end. No hurry up wait. @duanebrown

Q3: Are your contracts typically for a specific period of time (i.e. 6 months or a year) or are they more open ended? What are your termination terms? What are your renewal terms if there is a set starting period?

Because we have larger clients, our contracts are yearly. @PPCKenChang

Month-to-Month. 30 Day Written Out. I used to do longer periods of time with the “out” and then figured I was losing out on the marketing power of “month to month” so shrugged and just changed to month to month to match our termination terms. Works for us. @PPCKirk

Our clients are generally priced month-to-month retainer or project based, although the scope and costs can shift over time! We’re very flexible. We have a 30-day notice period. @amaliaefowler

They start with a 3 month term – have found that if you don’t have a longer start clients can try to cancel after a week (“Its not working”) Then goes to month to month with a 30 day out. @selley2134

I just gave away my answer: service is minimum 6 months (positioned as 2 quarters) & I bake in better pricing for folks who are willing to commit to me for a year. Software is M2M all the way! Renewals get a dedicated reach out to confirm in month 4/6 or 10/12. @navahf

My projects are generally broken into 2 parts – initial onboarding, strategy and changes + first 4 weeks of mgmt. Then, it is monthly for management (set fee for set work). 30 day termination notice is my standard. @NeptuneMoon

Likely vastly different from the majority. Our contract terms are generally NO LONGER than 3 months or whatever the client has paid UP FRONT. Then the clause to continue on a prepaid retainer-only basis, 90% month to month, 8% quarterly. @ynotweb

Our contracts are either project-based or have a month-to-month retainer; we want the client to choose to be in the relationship with us, so we don’t confine them to long-term contracts. When it comes to a client leaving, we have a 30-day termination policy. @snaptechmktg

Renewal always states that it is to be “mutually agreeable” – which allows for room to renegotiate if needed (on either side). And then either continue, or terminate. I don’t want clients working with me who are not happy with the arrangement! @NeptuneMoon

Ours are usually fixed term, most commonly 1 year. @beyondthepaid

Our agreements ask for a 3 month commitment which then transitions to a month over month agreement with a 30 days termination period. @ameetkhabra

Usually a year, for different teams we have different contract durations! @sonika_chandra

We do 3 months minimum and then go month to month. With a 30 day notice period. We don’t want anyone locked in if they are not happy. If you are not as jazzed to work with us as we are with you. Please leave when you are ready. It’s cool with us. @duanebrown

Q4: Is there something that you wish you had in your contracts, but do not currently? If not, why not?

The timezone one you mentioned that’s a really good one to add in. @PPCKenChang

Inflation clauses. I’ve never figured out how to add with out it sounding greedy. @armondhammer

The pause clause and more around communications expectations. It’s verbally done in the kickoff meeting by me (the comms expectations) but its too late then to undo sales. @amaliaefowler

Pretty happy with it. I’m sure our lawyer would add a ton more stuff in. We are always tweaking and improving proposals and contracts. It’s never in a done state. @duanebrown

Nope. Pretty honed after 18 years. Every 3-4 years we might think of something new. @ynotweb

Not quite the answer to this, but I’ll share something I put in and took out because it ended up being “extra”: I used to outline all the potential channels we could do and what the process would be to add them. @navahf

No, I don’t think so. I think we cover everything we want plus I do an annual review of it to add anything that I think may have been missed. I’m happy with what we have right now. @ameetkhabra

Clients ended up misunderstanding that I was suggesting all of it and would get cold feet. It took me a while (and some lost business) to understand that not everyone cares about all the knowable things. I also offer #ppc metrics lessons at client discretion. @navahf

I also have this at the end of my exclusions list: Any items not explicitly and specifically outlined in this document. @NeptuneMoon

Anything missing in contracts? My greatest learning from contractual work with very large institutions was to be very patient and work on a detailed scope of work. In practice we did the exact opposite to get going fast and impress the client. @soanders

Q5: Do you have any questions about contracts that we all might be able to help with?

General curiosity – how open (or not) does everyone tend to be when a client requests a change in an existing contract they’ve already signed? Obviously an “it depends” I imagine based on the rationale presented but interested to hear responses. @timothyjjensen

Do you specify ad spend ranges if you aren’t using a percentage of ad spend for pricing? I have gone back and forth about adding this. To me if the work doesn’t change ad spend shouldn’t impact pricing (if you arent using % of ad spend) @selley2134

Any good nonpayment clauses? Or do you have late payment fees? @PPCKenChang

As we are month-to-month, we are fine with changes in level and scope. Our invoices for retainer specify levels that they are paying for. If it was drastic change, we may do another contract, but not likely. @ynotweb

Q6: Is it your practice to review any or all of the contracts with new clients to be sure they are aware of important clauses? Why or why not?

I do review the important clauses to make sure we all have the same understanding about scope, communication, turn around times, etc. @NeptuneMoon

I outline what I consider to be the most important pieces of the contract during the sales presentation. So there shouldn’t be anything surprising when they receive the contract. @selley2134

Yes we review everything because we believe in Radical Candor, and want our clients to be successful and to enjoy a great working relationship. @PPCKenChang

Ours has not changed in a while… I still skim it but that is it. If clients/vendors…ect send me something. Then I read it a few times. @duanebrown

We don’t unless it’s requested. More often than not, clients need us to adjust the payment terms but everything else is standard. I think the 3 month commitment is the most important thing for them to understand so we emphasize that in the sales process. @ameetkhabra

Expectations. In my mind, managing expectations is all about business results and those are not in the contract at all And to manage expectations, you build a strategy and set up commonly understood KPIs. (worth more than a contract) @soanders

Q7: How do you go about setting client/stakeholder expectations on a new project? Do you have any type of established process for this?

This is addressed in the proposal stage. We provide 3 options or levels and ranges within those levels, depending on clients industry and competition profile. We found language about 5 years ago that is easy for clients to understand. Barely any issues since. @ynotweb

Be honest on thoughts, goals, outcomes, sticky points or anything else that might cause issues. Bring up past experience and why that helping us give our POV. Don’t be afraid to repeat yourself 3 times with clients. They forget, don’t remember…ect. @duanebrown

Generally, it’s assigning account reps to the clients, establishing agreed upon KPI’s, meeting cadence, and reporting cadence. @PPCKenChang

I stay away from any guarantees or promises when it comes to results – I do outline my plan of attack and when to expect changes. The biggest thing for me is asking for patience – new campaigns/accounts take time to drive results. @selley2134

Expectations are something that I dig about in the sales process, so I really have a sense of where the client is coming from to start. Then, I outline what we will be doing and what they should reasonably expect as we go. Definitely an ongoing process! @NeptuneMoon

During the sales process. Set expectations early, and often. @PPCKirk

Q8: When there is an expectation mismatch between you and a client/stakeholder how do you handle that?

Remove emotion from the equation, first and foremost. Then I ask questions that I hope will help me understand where the misunderstanding or misalignment is and why it might be. After that, prefer to come up with a plan together to modify course, reporting, etc. @NeptuneMoon

Re-explain proposal levels and options and their current retainer level. If they do not want to invest at the level that meets their expectations, then ultimately we recommend them to the path to part ways. @ynotweb

Set up a meeting as quickly as possible to address this -speed matters as something about the campaigns may need updating. @PPCKenChang

Try to find middle ground. If they really want a path to go down…. restate our position and head down it. They know all the risks and rewards at this point. @duanebrown

Q9: What is your biggest challenge when it comes to expectation setting?

Impatient clients. @duanebrown

Fantastic performance for our clients in one industry vertical may not be the same in a different industry vertical. I’d like to level set that great performance in one industry may not be at the same level in a totally different industry. @PPCKenChang

When client contacts change and you have to re-communicate expectations, process, etc. @timothyjjensen

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