7 Magic Words To Stop Scope Creep

About the show:

The Agency Spark Podcast, hosted by Sara Nay, is a collection of short-form interviews from thought leaders in the marketing consultancy and agency space. Each episode focuses on a single topic with actionable insights you can apply today.

About this episode:

In this episode of the Agency Spark Podcast, Sara talks with Karl Sakas on 7 magic words to stop scope creep.

Running an agency is complex, but it doesn’t have to be so complicated! Karl Sakas helps agency leaders make smarter decisions for smoother growth.

Drawing on his background in agency operations, Karl has directly advised hundreds of agencies on every inhabited continent. His clients call him their “agency therapist.”

Karl and his colleagues help you simplify agency life through one-on-one support, executive education, and training. He has written several books and more than 400 articles on agency management.

Outside of work, Karl volunteers as a bartender on an antique train. Get a free copy of his “Don’t Just Make the Logo Bigger” eBook when you sign up for his agency leader newsletter.

Key topics:

  • Why you keep doing free work for your clients… and how to finally stop
  • A framework for negotiating with clients: reasons-options-choose
  • Tips for getting back on track when you’ve said, yes, to too many out of scope requests

More from Karl Sakas:


Sara Nay (00:00): Welcome to the Agency Spark podcast. This is your host, Sarah Nay. And today I have Karl Sakas drawing on his background in agency operations. Carl has directly advised hundreds of agencies on every continent. His clients call him their agency, therapist, Carl and his colleagues help you simplify agency life through one on one support, executive education and training. He has written several books and more than 400 articles on agency management. So welcome to the show. Carl,

Karl Sakas (00:57): Sarah, great to be here.

Sara Nay (00:58): I am really excited. You're here. I'm thrilled to talk about the topic we're gonna talk about today because it's something that we train a lot of marketing consultants and agency owners, ourself, and we have for the past 15 years and all of the time, people struggle with scope creep. And I was actually speaking to a consultant today who just joined our network. And I said, what's your biggest challenge today? And she's like, I get these clients in these retainer engagements. And all of a sudden they start asking for more and more above and beyond what we already agreed to. And so I know this is a topic that you talk about a lot and you actually have seven magic words to stop. So scope creeps. So I would love to hear what are those magic words? And we'll go from there.

Karl Sakas (01:37): Yes. The seven magic words come in handy. If you've got a client who's asked for something that you know is out of scope and in the moment you might panic, right? You're like, what do I say? I don't wanna say that's out of scope because maybe they're not gonna be happy. But if I say it is in scope, it is free. Then I've just agreed to do free work. What do you do? Yeah. From my experience with hundreds of clients use the seven magic words, those seven magic words are, would you like an estimate for that? Client asks for something out of scope and you can respond, you know, Hey, sounds like a great idea, blah, blah, blah. Would you like an estimate for that? And what makes the magic words are it gives you typically one of three responses from the client? Sometimes they're like, oh, it's extra.

Karl Sakas (02:23): N nevermind. Nevermind. But it's not that important. Okay, great. You don't have to do anything further. They don't want you to explore further great. Sometimes clients will say yes, yes. I would like an estimate that doesn't necessarily mean they're gonna move forward with it once they get the estimate. But in both cases, if they say nevermind on the estimate, or yes, I'd like an estimate, they're acknowledging that it costs extra, that it's not in scope. And there is the third potential answer, which is less fun, but still important. That's where a client is like, estimate what I thought this was included. Why isn't this included, blah, blah, blah. Yeah. That isn't a fun conversation to have, but now you can talk things through, understand their expectations, understand what the disconnect was. And usually you can end it with a positive, a positive direction. It's a lot better. If a client doesn't plan to pay for it, it's a lot better to discuss that at the beginning, thanks to the seven magic words than to do the work only to not get paid for it.

Sara Nay (03:20): Yeah. And that's actually what I was having a conversation around recently was you have to hold to this from the very beginning of an engagement. Yeah. Because if you say yes to things early on, and then it gets out of hand, then it's harder to backtrack and say, oh, but we didn't commit to this cuz you've already been allowing them to add things on ultimately. And so I think that's a great point.

Karl Sakas (03:39): It is possible to change it later. You could frame it as we have been making special exceptions this or that. Unfortunately we can't continue. It's a lot easier though. If you call out a special exception from the beginning, you could say, but that's not included. We're trying out some new technologies. We're willing to do that at no charge this time. Or we're we had some extra capacity this month. We like working with you. We'll do it. I call that strategically free. You're framing it as free for a reason that the agency benefits from as opposed to secretly free strategically free. Yes. Secretly free. Hopefully never.

Sara Nay (04:15): Yeah, absolutely. I think that's a great point. I love the strategically free angle of it. I think it makes a lot of sense. Another framework that you have in place is there's oftentimes when maybe an agency needs to say no to a client for a specific reason. And so you have a framework that is reasons, options choose. So I'd love to shift and talk more through that.

Karl Sakas (04:36): So reason options choose is a negotiation framework. Simply a powerful that you can use when a client wants you to say yes, and you wanna say no, uh, or when you need to negotiate something where the things they want, aren't quite the things you're willing to give them. Here's an example. As a director of client services at an agency, one of our clients asked us for a micro site. They were launching a new joint venture initiative. They needed a small website. They wanted us to do it. And I came back with a budget and the client did not like that budget, never mind that this was a multi-billion dollar corporation and this wasn't her money personally. It was like, I was stealing it out of her wallet. And she was like, I'll give you. And she quoted a number, a two thirds of the amount that I had cited.

Karl Sakas (05:26): Now I could have said no way, we're not gonna do that. Or I could have kept pushing for the original price. But instead I used reason options. Choose. I said to her, let me regroup with the team. I'll follow up. I regrouped with the team. It turns out there was a smaller scope we could build for her smaller budget, not everything she wanted, but it would fit the budget. It would still be profitable for us. And then I came back to her and I gave her options. So reason options choose you, cite her a reason why you can't do the thing they want. Then you give them two or three options. If you've hand selected and you let them choose. So in this case, I came back and said, we can't do the full scope for the smaller price, but I've got some options for you.

Karl Sakas (06:10): Option. Number one was to do the full scope for the full price option. Number two was to do, and I, I laid out here's a smaller scope that would fit your budget. There's also an unstated option. Number three, which was, she doesn't want to pay us either of the prices. Then we do nothing. We get paid nothing. We do nothing. And that frees us up to use that time to work for a client that actually wants to pay us for what we're doing. Now, if you were in, in her shoes and you were hearing, okay, bigger budget, bigger amount in, in the middle or nothing, which one would you choose?

Sara Nay (06:46): It really, I would depend, but I'm guessing she probably went with the bigger budget one. Did she ultimately land on that or she go middle? Sure.

Karl Sakas (06:53): Did she?

Sara Nay (06:54): Yeah. Yeah. That's what I figured. Yeah.

Karl Sakas (06:55): yeah. And I think that was a case where she needed to feel like she got a good deal. Yeah. And once we did the anchoring, the value anchoring and the price anchoring, she realized, okay, if she paid this lower price, she'd have to cut certain functionality. She wasn't willing to lose. Yeah. She was willing to pay more. I will say for my work in operations at the agency, I also would receive their monthly retainer check. And they had the line at the bottom about amounts over a certain size required two signatures from their accounting department. She could have bought almost three websites at the original price before requiring a second signature.

Sara Nay (07:35): Yeah, no, I think that's a really great example. And it's, again, something that I run into. Cause we do consulting as well all the time where clients will ask for these things. And if you're able to say not just straight up and say, no, we can't do that. But giving them attractive offers that makes them think about how good their original offer was. Essentially in a lot of cases, it helps sway them to go the direction they ultimately should have gone in the very beginning.

Karl Sakas (07:58): Exactly. Uh, scope creep is a fact of life for agencies, consultants, coaches, and others, and scope creep isn't in and of itself a bad thing. It means that your clients want more help. That's good. They're going to you, not one of your competitors. The challenge becomes when it's out of control, scope creep. Yeah. When people are expecting the work without an additional, additional payment to cover the additional scope.

Sara Nay (08:22): Yeah, absolutely. Do you have any tips or strategies I'll throw this one out at you. Yeah. Um, for maybe someone that's in a situation where they have gotten out of hand in terms of scope group and they've just taken on more and how they can get back on track in that scenario,

Karl Sakas (08:38): It's a challenging place to be. But there, there is hope. And depending on the client, ultimately you wanna be relatively straightforward to say, there are some things we requested. We wanted to help out that weren't included in the original plan. Unfortunately, those things have added up and we can't keep doing that. You might say, here's my promise. Going forward. If you ask for something that is out of scope, I'll let you know that it's not included. And I can ask if you'd like an estimate for that. And, and if so, we can evaluate it and give you a quote for adding on. Or if not, we're not just gonna proceed with everything. We'll give you an opportunity client to talk it through and you can decide if it's worth it.

Sara Nay (09:21): Yeah. I think that makes a lot of sense in terms of it's really important for me. I'm always trying to be open and honest and communicating with my clients. And so I think if you're able to address the situation to acknowledge the situation you're in, where you let it get a little out of control, but then come up with a game plan, moving forward, using those seven magic words and getting on the same page and setting expectations. That's a great way to redirect and reroute the path you're on.

Karl Sakas (09:45): And your clients want you to succeed that they're not looking for you to fail or lose money for the most part there, maybe some clients like that. But the thing is you do the work you do every day, your clients don't, they're expecting you to be the expert, expecting you to speak up, do it, and you will be pleasantly surprised.

Sara Nay (10:05): Absolutely. I think that's a great note to end on today. Carl, thank you for being here. If people would like to connect with you or learn from you more online, where can they find you

Karl Sakas (10:14): Visit my website, sakas and company.com. That's S a K a S the word A N D the word company.com. I have hundreds of articles with all kinds of resources to help agencies and others who are working with clients. And I have a bonus. Thanks. Thanks to agency spark. I have a training that I've created to help people who are part-time project managers, whether they're doing PM on top of all of their other responsibilities, whether you're an agency owner or account manager or subject matter expert, and I've created a hundred dollars discount code. So you save a hundred dollars on that course. The agency PM 1 0 1 course. And the discount code for that is agency spark use agency spark you'll save a hundred dollars.

Sara Nay (11:00): Awesome. I will add that all with the show notes and that's a really generous offer. Thank you for offering that to our listeners. I'm sure there's a ton of value packed into that course and I, myself am gonna dive in.

Karl Sakas (11:11): Awesome.

Sara Nay (11:12): Of course, thanks for being here and thank you all for listening to the agency for our podcast. This is your host, Sarah. Next.



This episode of the Agency Spark Podcast is brought to you by Monday.com, a powerful project management platform. Monday.com helps teams easily build, run, and scale their dream workflows on one platform.  I personally am a user and big fan of Monday.com – I start my workday pulling up the platform and spend my day working within it for everything from task management to running client engagements. Learn more about Monday.com at ducttape.me/monday

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