Industry norms say a communications agency makes somewhere between 6% and 16% profit before tax. Crispin Manners thinks you should be aiming at 40%, and he has helped agency owners across Europe get closer to it than they thought possible. That gap is the whole episode.
Crispin spent 35 years building Kaizo, the agency his father founded, taking it from three people to sixty six and turning it into the fastest growing PR firm in the country during the tech boom. He chaired the PRCA for two years and is one of its founding fellows, a title he described on the show as “a bit like a Blue Peter badge really”. He now runs Onva Consulting and spends his time helping agency owners work out what they actually want from the businesses they built.
Industry norms are a ceiling you agreed to
Crispin told us about an agency founder who wants to sell up and has just discovered her firm is not profitable enough to interest a buyer. She brought in a consultant, who looked at the numbers and gave her the standard prescription: push utilisation and maximise the hours people are billing. All of it built on the assumption that she would keep pricing the way the industry prices.
“Industry norms deliver profit before tax of anywhere between about 6% and about 16%. But there are agencies out there that generate 40% before tax. My view was don’t follow the usual industry approach that says try and get to 20 if you’re lucky but accept it being 15. Why not start at try to get to 40?”
That is a pricing problem wearing the costume of a cost problem, and the sector keeps reaching for timesheets to fix it, which is a bit like patching a leaking roof with a bigger bucket. Every hour you shave off delivery makes you marginally more profitable and slightly worse at the job. Every conversation about price starts with a budget somebody else set.
What he heard through 2024, from agencies in the UK, across Europe and in the States, was that those budgets were shrinking going into the 2025 negotiations. His diagnosis of why was blunt, and I did not enjoy hearing it.
“It’s a total failure of the PR sector in general of proving value.”
Watch the full episode with Crispin
Find every episode at embracingmarketingmistakes.co.uk. His book, How to Sell Value, Demystified, sets the whole argument out chapter by chapter.
What is value-based pricing for an agency?
Value-based pricing means setting your fee against the business outcome the client is trying to reach, rather than against the hours you expect to spend getting there.
Crispin’s view is that the barrier is confidence rather than technique. The sector is stuffed with talented people who deliver genuinely good work, and yet the collective self-belief is, in his words, ridiculously low. He traces that straight back to what agencies choose to measure.
Measure output and you end up talking about coverage, reach and activity. Measure impact and you end up in a different room, talking to the person who owns the business goal. Smart professional services firms, he says, start with the client outcome, work out what achieving that outcome is worth, and then price their contribution to it. A million-pound outcome and a hundred-thousand-pound outcome do not deserve the same fee, however similar the work looks on a timesheet.
Most agencies never attempt that calculation. So the price conversation begins wherever the client’s budget happens to sit, and by then you have already lost.
“If you’re being presented with a brief with a budget attached, it’s probably already too late in the sales cycle for you to be able to influence the price.”
The £5,000 fee that was really a million-pound job
The example that I liked involves optometrists, of all things. One of the agencies Crispin advises was working with a client delivering in-home eye tests, a private-equity-backed business with aggressive growth targets and a hiring problem. To grow, it needed 80 optometrists. Optometrists mostly work in the NHS, and persuading someone to leave a secure job for a company they have never heard of is genuinely hard.
The agency’s instinct was to raise awareness of the opportunity. It added up the hours, applied the usual maths and proposed a one-off project fee of £5,000. Crispin asked one question before it went out: what are these optometrists being paid?
Sixty thousand pounds each, apparently, recruited through agencies charging at least 20% of salary. That is £12,000 per hire, multiplied by 80 hires, which puts the client’s willingness to pay somewhere around a million pounds. The agency was proposing to solve a million-pound problem for five grand, which is nothing short of hilarious until you realise how many of us have done something similar.
So they went back and mapped where they could genuinely contribute. Not enough of the right people were hearing about the roles, and the ones who applied were converting badly from CV to interview. Three or four specific points on the journey from applicant to hire where the agency could move the numbers. The revised fee was four times the original, for the same work, and they won it. The client came back for more, because recruiting with their help worked better than recruiting without it.
Crispin’s framing for this is a football team, and it is the best answer I have heard to the “we can’t guarantee results” objection that agency people reach for.
“The client isn’t asking you to guarantee it. They’re asking you to show what your contribution will be. It’s a bit like putting a football team together. Are you going to score the goals, save the goals, make the killer pass to create the goal?”
He also makes a point that cuts the other way, and brands should hear it. The clearer your brief is about the business outcome, the better the response you will get from every agency pitching for it. We ask business objectives before communications objectives on every new brief at Prohibition, then keep asking why until we hit something commercial. It is exhausting for everyone involved, and occasionally a marketing director looks quietly mortified because they do not know the answer either.
Why do agencies get stuck on the hamster wheel of growth?
Because winning work feels like progress. Each new client needs more people, and more people need more clients to pay for them, until growth is the only strategy left.
Kaizo grew 187% in a single year after Crispin pivoted it towards technology clients, and averaged 34% compound growth over a decade. Growth at that speed forces recruitment decisions you would not make with time to think. Then come the in-house HR, IT and finance people, ten or twelve salaries generating no fee income, which means winning more clients to cover them. Crispin ended up with a nickname from one of his directors, “why-management man”, because when the agency moved offices he was the only one willing to sort out the furniture and the IT. He was bored senseless by it, and it was plainly not the best use of the person running the company.
“The hamster wheel of growth blinds you to all of those important choices.”
There are thresholds, and they arrive earlier than owners expect. Up to about twelve people you can run an agency by osmosis, because everyone gets a touch point with the leadership without any process at all. Past twelve, the people you do not see every day start to disconnect. By twenty five you need processes that satisfy external auditors, proper policies, the lot. None of that is bad. It is just a different job from the one most founders signed up for.
Then there is the arithmetic that should stop any agency owner mid-scroll. A one-million-pound fee income agency at 40% generates exactly what a four-million-pound agency at 10% generates, with a quarter of the headache and a fraction of the leadership burden. When we asked Crispin what advice he gives founders who want to scale, his first move is to ask why they want to scale at all, and whether they mean scaling the profit or scaling the people.
Underneath all of it sits a question he keeps returning to, which is what the owner actually wants. He described a client who admitted he wanted to put his children through university in the States, a goal that was mathematically impossible at his current prices. That clarity gave him a reason to raise fees, his clients accepted the increase without much fuss, and his margins recovered. A later distraction he took on for less examined reasons, wanting to make his parents proud, dented his revenue for two years and halved the offer he eventually received for the business.
Embracing Marketing Mistakes is the weekly podcast I host with my Prohibition co-director and mate Will Ockenden, where we ask brilliant marketers about the campaigns and businesses that went wrong, and what they took from the wreckage.
I told Crispin on air that he had given me something to discuss with Will at four o’clock that afternoon. Will’s response, live on the recording, was that he was busy then bloody typical.
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