Robin – High Agency Margin
Dr. McLaughlin, I discovered that my agency is taking a high agency margin of a whopping 30% of what the client pays for me.
I‘ve spoken to the client, who wants to renew me, but they don‘t want to pay me any more money, they say, because of current market conditions and because they are already paying a lot.
I‘d like to take a bit from the agency but they have said they can‘t give me any more as the client isn‘t paying any more.
What should I do?
Dr. McLaughlin‘s IT Surgery
This should be quite easy.
I‘ve done it before myself – and my agency were taking far less than 30%.
What you need to do is to turn down the renewal flat at that rate.
You could, of course, bluff it, but you have to be prepared to lose out.
Accept Contract Renewal
The best thing to do is go to the client and tell him or her that you will accept the renewal but you want to get more money out of the agency.
There‘s no need to tell them that the agency are getting 30% as that may have unforeseen consequences if the company decide to ditch the agency.
Just tell your boss to ignore anything your agency says but ask him or her not to tell the agent what you have told your boss.
Double Contract Renewal Rise
That way it is completely safe for you.
There is always the possibility that the boss will tell the agent but this doesn‘t happen in most cases.
I remember one time, even after I told him, that my manager came out of his office and said that the agent had told him that i wouldn‘t be staying on.
He needed reassurance that this wasn‘t the case and I gave it to him.
I managed to get something out of the client AND the agency at that renewal and got renewed for 6 months rather than the 3 that everyone else got as the client ‘˜didn‘t want to go through that every 3 months‘.
If you do this I think you‘ll find that the agency can find something out of that 30% or risk losing it altogether.
I would ask them for a ridiculous amount telling them you know what they take and get bid down.
I would ask them to give you half the amount, i.e. 15% of their 30% just to make them sweat a bit so that they will be happy to give you 5% to 10% in the end.
Even at the lower end there‘s more that you can get from that well at your next renewal.
Don’t accept the high agency margin.
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