As agencies head into early-year renewals, one topic consistently rises to the top: rate cards.
Whether driven by procurement mandates, budget resets, or internal cost pressures, rate card discussions can quickly become tense - especially when large enterprise clients are involved. Upsourced Partner and Co‑Founder Craig Baldwin breaks down how agencies can approach these conversations strategically, confidently, and profitably.
Below, we’ve distilled the key lessons you can apply to your own agency.
Be Proactive - or Lose Leverage
One of the most common mistakes agencies make with pricing conversations is waiting too long.
Surprise price increases rarely go well. They put clients on the defensive and immediately frame the conversation around cost instead of value. When possible, rate card discussions should happen weeks or even months in advance, giving clients time to adjust expectations internally.
Proactive communication:
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Signals professionalism and transparency
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Builds trust with stakeholders
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Reduces emotional reactions from procurement and budget owners
If you already missed that window, your options narrow - but thoughtful stakeholder management can still make a difference.
Understand the Stakeholder Web
Rate card negotiations - especially with enterprise clients - are rarely one‑to‑one conversations.
In most cases, agencies must navigate three distinct stakeholders:
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The Champion – the person or team receiving the most day‑to‑day value from your work
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The Budget Owner – the individual accountable for approving spend
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Procurement – the group tasked with cost containment and contract enforcement
Your first priority should always be alignment with the champion. If they strongly believe in the value you provide, they can become an internal advocate when rates are challenged.
The next step is ensuring the budget owner sees the engagement the same way your champion does. When both parties are aligned on outcomes and impact, procurement discussions become far more manageable.
Procurement Isn’t the Enemy - But It Has Different Incentives
Procurement teams are often measured on their ability to reduce or contain costs. That means they may surface old rate cards, push for concessions, or ask for justification that feels disconnected from the work you deliver.
When you lack strong internal champions, negotiation - not confrontation - is often the most effective path forward.
A practical approach:
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Acknowledge procurement’s mandate
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Offer a measured concession (not a full rollback)
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Frame the outcome as a shared win
In many cases, a partial increase that supports your cost structure is far better than holding firm and risking the relationship - or losing the work altogether.
Know Your Numbers Before You Defend Them
Defending your rate card starts long before a client conversation. It begins with a clear understanding of your own financial mechanics.
At a high level, agency gross margin is driven by two primary levers:
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Project margin
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Utilization
Many agency leaders underestimate how high project margins need to be to sustain a healthy business - especially once operating expenses are factored in.
As a rule of thumb:
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~50% gross margin supports a sustainable agency
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~25% operating expenses leaves ~25% net operating income
If your pricing doesn’t support those fundamentals, no amount of negotiation skill will fix the underlying issue.
Pricing Is a Math Problem - Not a Gut Check
One of the most powerful takeaways from the discussion is this: you should know your margins before you sell the work.
By building estimates from real cost rates and expected effort by role, agencies can:
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Set target project margins in advance
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See the immediate impact of discounts or concessions
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Decide consciously whether a lower rate is acceptable
When pricing is grounded in data, negotiations become calmer, clearer, and far less personal. You’re no longer guessing - you’re choosing.
Confidence Comes From Preparation
Clients can sense uncertainty. When you’re unsure whether your pricing is fair or sustainable, those doubts tend to surface during negotiations.
Conversely, when you:
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Understand your cost structure
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Know your required margins
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Can explain tradeoffs clearly
You show up with conviction - and that conviction is often what allows agencies to successfully defend their value.
Final Thoughts
Rate card discussions don’t have to be adversarial. With the right preparation, stakeholder alignment, and financial clarity, agencies can navigate even the most procurement‑heavy environments without undermining their business.
If you’d like help evaluating your rate cards, margins, or pricing model, the Upsourced team works through these exact scenarios with agencies every day.
And if you haven’t already, be sure to watch the full episode of Creative Outcomes for a deeper walkthrough of these concepts.