How AI for Agencies Cuts Delivery Cost and Changes Pricing

Faster delivery, lower invoice, less revenue.

At the high end, clients are paying for outcomes and speed, versus just by the hour. What we need to be selling in the future is expertise. AI is like adding superpowers to us.

Key Takeaways

• I can build an agent workflow that moves a team's work to one person who just does the reviewing.
• You have to have a plan, and when you have a plan, AI works really, really well.
• There is no tool that fixes culture.
• What people are going to be buying more and more from us in the future is the result.

Where does AI actually cut an agency's delivery cost?

I'd say most agency teams just use AI to write emails.

I do a lot of AI automation with agencies, like helping them build RFP processing tools and other ways to get AI into their work. With one, I'm improving their process, like being able to process and write proposals much faster, plus research agents.

A proposal tool built on an agency's own past proposals uses them as part of its memory. When it's writing a proposal, it's got access to all the previous written proposals for the last ten years.

I can build an entire agent workflow that will do the job of the people you've got on a task. Then you can move it to one person that just does the reviewing.

None of it is a survey, and I have no hours or percentages to give you for design, copy, project management or QA. The AI for agencies page covers how I work with agencies on this.

What does it take to get that saving?

Owners often tell me, yeah, we're too busy. Can you just build us a tool?

Did I build mine overnight? This has taken me months to get to this point.

You have to have a plan, and when you have a plan, it works really, really well. Number one, I am smarter than the AI about my business. I'm very clear that it is a helper.

Your biggest problem is making sure that the AI understands the difference between internal work and customer work. That's where it can get a little screwy, so you've got to put in some good guard rails.

That setup time and those guard rails are a cost of their own.

Where does AI not lower the cost?

I've had owners tell me, "I want to roll this out to the entire team." And I was like, what about governance? That's where it all falls apart.

Somebody's AI could go in and tear things up in one place, and then another person comes in and adds new dates to things. Somebody on the team has to be the traffic cop.

Rolling it out to the whole team is a leap, and that's when things start to bog down very quickly, because people thought AI was just going to do their bidding and you've got to give it direction.

There is no tool that fixes culture, and AI is not going to fix culture. I've seen a leader doing a bunch of AI stuff on nights and weekends, then coming in and asking the team why they're not doing more.

What happens to revenue when delivery gets faster?

As AI grows, the time part becomes more commoditized, but the expertise part gets more valuable. It's about making sure we're making a shift towards selling our expertise, and less towards the billable hour.

AI is replacing a lot of the how in some cases, or at least trying to. What people are going to be buying more and more from us in the future is the result. A client's goal is to buy the quarter inch hole that the drill makes.

What clients are buying is outcomes. What they're buying now is solutions, and it's all a lot more than aesthetics.

You can stay hourly. You add the agent as an employee in your time tracker, and it bills its own time just like anybody else. Then you don't need to go back and rethink your entire business model because of AI.

How the price you set decides what you keep is covered in agency profit margin and how your pricing sets it.

How should an agency price work once AI makes it faster?

Value based pricing, or as I like to call it, high confidence pricing. The mechanics are in value-based pricing for agencies.

The goal is to leave your initial calls knowing what the problem is costing the client. Let's get clear on what the problem is before we start talking about rates. Otherwise we're putting the cart before the horse.

When the client sees the price before they really understand the value of what they're getting, the conversation turns into something more commoditized. How long is this going to take? How many hours is this going to take? We want to be doing the math.

When a client says the price is too high, my question is: compared to what? The question is whether the outcome is worth what they pay. If it is, the price is right.

We will still have time and material projects, because not everything fits neatly into this bucket. Good firms tend to mix hourly and outcome-based pricing. People just don't know how to get to that price. There is math involved, but it's cultural change in some cases.

At the far end, I work with one firm that only does outcome based pricing. The client doesn't pay any money upfront. The firm gets paid all on the back end, on the ROI.

How does Schmidt Consulting Group help an agency owner price work after AI?

Schmidt Consulting Group works with founder-led agencies and professional services firms on positioning, pricing and new business.

Mentorship is twice-monthly counsel for founders on pricing, hiring, clients and direction. You set the agenda, and your team does the work.

Advisory is a weekly operating rhythm for growth: a written plan, one priority at a time, and a review of results every week.

You'll hear the fee on our first call.