Video Production - "Rush" Rate
I was just wanting to get feedback as to whether most folks consider it a best practice to charge a "rush" rate for video production?
As we all can attest, most clients want to get their product created as quickly as possible; but they still have an understanding that the process takes at least a week or more. However, there are always a few clients that demand almost immediate turnaround - like only 1-2 days.
- Would you charge more than your normal rate for such demands?
- Or do you have an itemized rate card - where you give clients the choice between normal production and rushed production at a higher rate?
I appreciate your thoughts... thanks in advance!
Creative Services Director - The Charlottesville Newsplex
You're asking if people charge overtime rates after going past a full day. That's perfectly fair, as long as the information is given up-front. My plumber charges triple for a Sunday job, and he's got every right.
Does "Rush" means drop everything else? Like, bump another client that was already scheduled, and work overtime on this new thing? Darned right you should charge more.
Thanks for your thoughts, Mark. In my line of work - video production for TV station advertising clients - "rush" does usually mean bumping other projects aside to work on a particular client's commercial. Since I'm a manager within a TV station, I of course have to take into consideration how rates affect a client's continuing relationship with our station. And our Sales Manager, of course, primarily sees things from a revenue point-of-view.
I'm trying to decide if I should create a special rate for turnaround less than 2 days. Because to me it seems like poor business to delay projects for other paying clients, unless I can charge more for my personnel's time.
Any other thoughts, given this additional info?
Creative Services Director - The Charlottesville Newsplex
This is a tough one, because from what I know of station politics, Sales wins every battle in the end. GM's don't usually come up thru production or engineering, but from Sales.
Really the best thing that could happen is, you and the Sales manager go off together for an "offsite planning conference" at the local watering hole, share some brewskis, and come to an understanding that you are each one side of the same coin. Sales guy hurts his own sales, if he over-books to the point it disappoints the clients and creates ill will. Your side is, bring it on; I'll take all you want to send me, up to the point we're stepping on our own, um, feet. Also, ingratiate yourself by showing the sales dude you can be his wingman and help up-sell more station services like web videos or something, piggy-backed on the simple commercial production. Name-drop "added value", and "ROI" like a boss. Between the two of you, you can not just please the client but talk them into extending campaigns using donut-type spots for longer runs on-air, with easy edit updates, instead of re-shoots, for you. Now, you may not go get matching tatts inked together, but you at least feel like you're on the same side of things. This will give you a stronger position when the two of you, together, hit the GM up for authorizing the overtime or the temp added staff freelancer you need to keep production on schedule and looking good.
Then over a game of billiards, you two figure out what kind of rate structure Sales can work with, that takes into account your extra overhead in pleasing the sudden rush jobs. I don't have an easy answer for you, but I might suggest one aspect of determining the rates could be some sort of points-based system. Salesdudes simply adore metrics and targets and points schemes.
And it might be no more complex than this: between the two of your, assign every current client an arbitrary "score". The number reflects not just their current value on just this one job, but how big or small or important they are to the year-round bottom-line for the station. Is this a likely one-time client without likely potential to up-sell or get repeat biz? Lower score than the "whale" furniture dealer that runs stuff like clockwork every month and loans your news department furniture for the morning talkshow sets?
Use the scores to help judge how far you can push back a smaller client for one that's strategically more important to keep really happy. Now, use the scores to decide what kind of pro-rating or other price break you can give back to the lesser client to keep THEM happy. "I thank you for letting us slip your due date by a day, and to show my appreciation, we'll do the internet version of your spot for the station web page at no charge". Something like that. You might have a "budget" for bumping productions in one month, like, I already bumped three mid-tier clients for your "A" guy this month, can we afford to lose three accounts for one? If not, I need some more money for freelances this month to keep it all on time, and I want it out of this high roller's account, not my operations fund".
My take is, if Sales brings in extra sales, this should not penalize Production for executing the jobs Sales brought in, and since it is extra money coming in, a little piece of that should peel off to enable the extra production expenses. Maybe the money gets targeted to improved infrastructure, if that will help increase overall speed of thru-put for these jobs. It also deflects any suspicions that you just want more pay for work the other guy brought in. Sales Dudes also can be jealous because of their competitive nature, so if he has to give up a "taste" from the extra account he landed, he feels better giving it up for the "team" as infrastructure improvements, versus salary. Everybody still comes out ahead that way. But it relies on Production and Sales working as a team and not as rival departments.
Helpful? Maybe, maybe not, but I won't charge you for the opinion.
Doesn't a simple out-of-normal-hours and overtime rate do the job? And shouldn't a production budget include a charge to cover standard project costs and overheads that might be partly independent of time-rate items?
I have been in the same boat. Years ago, we adding a rush charge for commercials with less than 48 hour turn around. While it made us feel good on the production side, it really created some problems with the sales department and with clients. Especially when it was some of our better clients who we liked and didn't mind their usual last minute work. Eventually we did away with the rush charge. In looking at the bigger picture, the battles that are important to the production folks aren't always the battles the folks in accounting care about.
About 2 years ago we devloped a "Service Level Agreement" which outlined the expectaions the sales departement and clients should have in terms of turnaround time. When we can, we try to accomidate quick turnaround but the expectations are managed at the begining. Of course the most important part of this was having upper management buy in and support it as a good thing. I won't say it's always perfect but it's now a much more managable situation.
I was Art Director at an ABC affiliate for fourteen years. The pecking order among our various departments determined how resources were alloted. From top to bottom it was - News, Sales, Promotions, Production. The News Director actually was allowed to tell the GM whether we (Production) could bring in large productions which might inconvenience them. Example - our Studio B was often used for cut-ins, promo shoots, and other various News incidentals. But the studio had its own control room, cyc wall, and other amenities that were often rented out to PBS, CNN, and other big players. If the News Director stamped her foot, the GM would always cave, even when 10 - 20 thousand dollar budgets were being dumped.
As for rush jobs, the general consensus was that there was standard turnaround (3 -5 days) and fast track (1 -3 days). The price was the same, but it depended on how pushy the salesperson was being on any given day. It finally came to a head when the Sales Manager started explaining to clients who wanted to bump other clients, that if they bumped other people, it was perfectly fair for them to expect to be bumped at some point, for a bigger client. That generally calmed the waters.
I think I've seen this from vritually all sides.
I was a production director in major market radio for some years and had to interact with sales and management. Then I went solo and had to DO my own sales. Then when I became a more experienced producer I had responsibility to balance all the aspects.
Here's my 2 cents.
First, it's critically important to the team that everyone understands that nobody in the org chart has a particularly easy job. The problem is that it's all too easy to look at some part of the puzzle - like Sales vs Production - and always come down on the side of where the most beans are being counted. And thats typically Sales. But the moment you make one partner in any enterprise feel disconnected and therefore less "worthy", you suck out their motivation in a hurry.
Looking back on those years, If I had one magic wish, it would have been for management to RELENTLESSLY force each team to acknowledge the work of the other teams. I remember week after week back in that era of my career where the sales folk would come in one-by-one on Friday and dump 15 producton orders on my desk at 3pm and go out to start their social weekends (which YES, often had a business relationship purpose but was totally alien thinking to the young me!) leaving me to slog through the production and dubs late into Fri and even into Saturday. Geting those spots carted up and on air for Monday was NECESSARY to them getting their commissions - but you know how many sales folk or sales managers ever came to thank me for making their commission checks possible? Exactly none.
Sales was a silo. Production was a silo. There was no team.
So in that context, here's my 2 cents about Rush Rates.
If you're going to take the extra income and just drop it to the bottom line and make the bean counters and the owners happy - don't bother. ALL you're doing is adding more stress among your line workers and building resentment. Which is a recipe for a silo'd and grumpy team environment.
If, on the other hand you view those rush rate dollars as extra income earned by EXTRA EFFORT from a subsection of your team - then for heaven's sake, USE those dollars to foster teamwork and unit cohesiveness -so that those rates will have a business purpose that you can defend.
Hell, if it was ME in your management, I'd sequester the RUSH Income and spend some serious time figuring out how to use it to directly benefit those shouldering the stress of that rush work.
But to add more stress to your workforce simply to make more money for management without using at least a significant part to show them you appreciate the extra work - is, IMHO, a d**k move.
I think I was a pretty good Production Director who really cared to push for maximum creativity and quality in my work - but after a few years, I couldn't WAIT to get out of radio and go out on my own, not because I didn't like the work - but because there was absolutely NO incentive beyond a paycheck to motivate me to keep pushing.
And as every employee survey shows, over the long run, it's acknowledgement and demonstrated respect rather than JUST a paycheck that motivates employees to excel.
So if you're going to charge RUSH RATES - make sure it actually gets to the people actually doing the RUSHING.
My two cents.
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Thanks, everybody, for your input! It has been insightful. I do like Ron's idea of a "Service Level Agreement" - I may need to explore that. Mark's thoughts about ways to justify freelance help are good too.
Mostly, I think the overarching theme from everyone is this: the General Sales Manager and I must constantly work to ensure that Sales and Creative are NOT rival departments - but two means to the same end (more station revenue). Bill and Mark each infer that I should avoid rules that "silo" departments. My GSM and I have a pretty good relationship, but we still need to work on communication. He has a good handle on revenue, but I'm more the one who calls for better organization, to avoid client issues or backlog.
I appreciate any experience you folks can share - keep the ideas flowing!
Creative Services Director - The Charlottesville Newsplex