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Why Do Smart People Feel Pressure?

In the third in a unique series of extracts from his new book “Why Do Smart People Make Such Stupid Mistakes”, leading marketing and agency expert Chris Merrington discusses why pressure can lead to wrong decisions and why not increasing fees and rates if a mistake.

Mistake 4: Pressure can lead to wrong decisions

Many people working in agencies are under huge pressure from every angle.

That pressure can be to achieve specific financial targets in a world of increasing competition, pressure from clients to deliver and the desire to win new business at any cost.

The pressure can come from their boss, colleagues or simply from within themselves. Time pressure to deliver and tight deadlines exacerbate this situation.

When we are desperate for business or to make that sale, it is so easy to make wrong decisions and give the wrong impression to the other party.  Under pressure we agree to deals which, long term, are unprofitable for us. Most of us find it so hard to walk away from a deal even if it means we will lose money if we agree to it.

No deal is better than a bad deal.

In the heat of a negotiation discussion about fees or rates, there can be a temptation to believe we must give immediate answers to every question we are asked and every demand made.

Our heart rate is racing, our blood pressure has increased and we can feel the perspiration on our forehead and the back of our neck. This all encourages us to give an instant snap decision. During this physiological reaction it is dangerous to make unplanned business decisions. 

There is one thing worse that losing a new business pitch and that’s winning an unprofitable new client.



Mistake 5: Not increasing fees and rates

I ask agencies, “When did you last increase the fee levels that you charge your clients?”

There are many agencies I meet who haven’t increased their fees and rates to clients for four, five, even six years. Why?

Has the value you provide to your clients decreased? Do you have so little confidence in your value and differentiation that even asking for a 1% increase is too much? Is it surprising many agencies are under-performing profitability-wise?

Is it fear that holds us back from increasing our fees each year?

How much is your fear costing you?

If the costs of running a business (i.e. your agency) are increasing, salaries are increasing and you aren’t increasing your prices, then profitability is likely to decrease unless you’ve found ways to be substantially more efficient and productive – that’s basic ‘school-level’ economics.

A senior director in an agency told me proudly they had not increased fees to one of their major clients for eight years. When challenged by me, her response was, “We are still making good money from them.”

I think she is missing the point. The agency could have been making more money.  The point is that the agency team had received several pay-rises during those eight years. The point is that agency profitability is declining rapidly.

If an agency doesn’t increase its fees to a client long term, what signal does that send to the client?


Chris Merrington is an author, and one of the UK’s leading consultants and trainers working with clients in the fields of Negotiation, Selling Consulting Services, Business Prospecting and ‘Pitching to Win’.

His techniques allow participants to learn fast, take action and apply the strategies straight away.

Chris has published his latest book, ‘Why Do Smart People Make Such Stupid Mistakes?’ using his years of experience as a guide to those who are looking for new ways to increase revenue and profits through our tough economic times.

‘Why do smart people make such stupid mistakes? ‘ is designed to help agencies and sales people make more informed choices, by choosing more appropriate responses and then working more efficiently. He shares his strategies, techniques and tips on how you can be more profitable, whilst delivering huge quantities of value to your client and building stronger client-agency relationships. Value which takes your clients’ businesses closer to achieving their critical business goals and, in so doing, will take you closer to achieving your business goals.