THINK:LONG: Price for longevity, be positive for longevity. Think like Ron Baker and Terry Savage

Think:Long is a dream come true as well as a test for AWARD chair, Mike Spirkovski, and The Communications Council chief executive officer, Tony Hale. If all goes well, it will be repeated next year. But bigger. All seems to be going very well by the time that Jonathan Kneebone, Susan Hoffman, Terry Savage and Ron Baker have delivered their sessions. All that is left at this point is for Humdinger Sydney founder, Al Crawford, to moderate the questions. And he then wowed the crowd.

“Value is a feeling not a number.” Ron Baker, co-founder, Verasage.

“VeraSage Institute is the revolutionary think tank for professional-knowledge firms. We challenge people to break free of practice methods that marginalise their professions, undermine their purposes, and fail their clients.” Ron Baker has come to the right place at the right time. Think:Long, is AWARD’s Short Talks on Creative Longevity. Nothing shreds creative longevity like pricing problems and Baker has a better option.

The move from commission-based pricing to billable hours was idiotic, Baker states in his opening. I’m an accountant; accountants and lawyers have been struggling with the billable hours problem forever, he adds. Why? Because it undermines trust and more profoundly because time doesn’t equal value or cost, it equals constraint.

Moreover using time to measure what your work is worth “is like plunging a rule into an oven to measure its temperature.”

A customer, he continues, [and by association, a client] doesn’t buy a product. He buys the satisfaction of a need or want that has been met. How much he is willing to pay will depend on the context. You’ll happily pay 80c for a bottle of water at a supermarket, $2.50 at a convenience store, $4 at an event.

So “the first law of pricing is that all value is subjective.” And this is something that Apple is using to its advantage, Baker notes. Apple prices according to value, not what the competition is charging nor the cost to produce its products. People pay more to own an Apple.

All price negotiations should begin by talking about the value that the work is bringing to the business (“What do you need?” “What are you trying to accomplish?”) not the scope of work, and every price decision should allow both client and provider to feel they have received fair value for the job.

Borrow his final words, if you wish. Baker did – from McKinsey. It’s an agreement (paraphrased) that McKinsey asks every client to sign before a job: “We will only undertake this engagement if we can both agree that the value we are creating is greater than the price we are charging.” The idea, of course, is to keep clients focused on what actually matters to them, which is not how long the job took. And to allow your pricing to keep your business going for a very long time.

Headhunting maestro, Esther Clerehan, (left) introduced Terry Savage. CD & co-founder of Common Ventures, Jane Burhop, introduced Ron Baker.

“We should be on an absolute high.” Terry Savage, chairman, Cannes Lions

Terry Savage came to Think:Long to kick some arses. The industry is sabotaging its own longevity, he began. Yes, everything has changed, he admits, but nothing has changed. It’s a fiction that change for bad is coming, he adds. “It’s sad right now. We are giving ourselves the biggest beating up, when we should be on an absolute high.” Confidence and aspiration is needed. We need a new level of training for marketers, he adds.

“The one thing we know is that creativity is the big differentiator to reaching people, whatever the platform.” We need to stop the trend of creativity being humbled, he adds.

He is astonished (and not in a good way) that ad people and marketers don’t look at the work that wins awards. “How can you create the world’s best work if you don’t know what it looks like,” he asks – justifiably. “Do your research. You’re not doing your job as a marketer if not.”

Of course, in Savage’s eyes, that includes going to Cannes. And he paraphrases the quote by Diageo chief marketing and innovation officer, Syl Saller, at Cannes last year. Being in Cannes is not an indulgence. We sell more at high prices from work that’s creative.” But he is forgiven for aligning high creativity and longevity of a creative business. Sometimes those businesses seem to forget what they are about, don’t they? (Hint: it’s in the two words that describe them.)

Savage ends with advice about longevity for both brands and agencies. Firstly, he quotes Axel Schwan, chief marketing officer, Burger King, Cannes Lions Creative Marketer of the Year 2017. “If you want to suck less as a client, don’t be a client – be a partner.” A long relationship, he states, will lead to more awards and a greater ROI. Secondly, he reveals the two most common criticisms that clients have of agencies. “They don’t understand my business,” and “They have too many layers; they’re too slow.” Both are solvable. Use your clients’ products and cut out the crap.