Step 1 of 5
Roll up every purchase order
The first job was to see the relationship the way a CFO would: as one account, not dozens of separate projects.
- Gathered the full history. Purchase orders and invoices across the relationship were brought into a single dataset.
- Organized it by buyer group. Spend was rolled up by the client's internal buyer groups, showing who bought what, how often and how consistently.
- Found the real run rate. The roll-up showed that the agency was already running a large, steady program, just split into many small transactions.
- Made it easy to read. A visual summary gave leaders on both sides the picture in minutes, backed by the underlying data.
Step 2 of 5
Design fixed-fee tiers around real demand
With the run rate clear, Capstone designed a fee structure built on what the client already bought, not on what the agency hoped to sell.
- Three monthly options. Each tier was sized from historical spend, so the client could choose the level that matched its plans.
- A fixed base fee. A committed monthly fee replaced project-by-project purchase orders for the core of the work.
- Scope everyone could understand. Each tier made clear what was included, and work beyond the base was billed on top, so the agency kept the upside as the relationship grew, in line with the principles in our guide to contracts that leak margin.
- Margin protected. Each option was tested against the agency's cost to deliver, so predictability didn't come at the expense of profit.
Step 3 of 5
Find the win-win
The proposal was framed around a problem both companies shared: a buying process with more friction than the work required. Capstone's team has spent years working with blue-chip procurement departments and international companies, and knows how complex budget processes and layered approval levels really work. That experience shaped a structure procurement could approve, not just one the business sponsor liked.
- Designed for the approval path. The fixed monthly fee was structured to fit the client's budget cycle, purchasing rules and approval levels, so it could move through procurement without stalling.
- Aligned on the approach first. Capstone agreed the idea with the client's sponsor in conversation, then followed up with the analysis and the tier options.
- Led with the client's benefits. A dedicated, stable team, predictable monthly spend, fewer purchase orders and approvals, and faster starts on new work.
- Opened the books. The roll-up and the source data went to the client in full, so its team could run its own analysis.
- Added more value. The new way of working made room to layer in value-added services that the project-by-project model never allowed.
- Won the agreement. The client adopted a multi-year fixed monthly fee agreement worth high six figures a year.
A better deal for both companies
For the agency
Predictable revenue
A committed monthly base fee from its largest client, the stability to plan months ahead, and the confidence to invest and hire.
For the client
A dedicated team and predictable spend
A dedicated, stable team that knows its business, predictable monthly spend for budgeting, fewer purchase orders and approvals, and value-added services layered into the agreement.
Step 4 of 5
Put predictable revenue to work
A committed base fee changed what the agency could plan for, and the improved profitability gave it capital to deploy. Without it, the business would have kept living hand to mouth, month by month.
- Stabilized the business. Payroll, vendors and cash could be planned months ahead instead of week to week.
- Invested in new strategic areas. The agency deployed its improved profitability into key capital investments in new capabilities that further built its moat in the market.
- Brought in world-class leadership. With revenue it could count on, the agency could recruit senior leaders it couldn't have committed to before.
- Grew from a known base. Forecasts and growth plans started from committed revenue rather than hope.
Step 5 of 5
Turn better revenue into enterprise value
With the majority owners planning to exit within 24 months, every change was measured by one question: what would a buyer pay for it? The multi-year agreement answered that question in the owners' favor.
- Higher-quality revenue. Contracted, recurring fees from a blue-chip Fortune 50 client replaced revenue that had to be won again one purchase order at a time. Buyers pay higher multiples for revenue they can count on, as we explain in what buyers pay for when acquiring an agency.
- Lower risk in the largest relationship. A multi-year agreement turned the agency's biggest account from a concentration worry into a contracted asset a buyer can underwrite.
- Improved profitability, reinvested. Predictable fees and better margins funded new strategic areas and world-class leadership, which buyers value as growth they can see.
- Millions added to enterprise value. Together, the higher-quality revenue structure and the investments it funded added millions to the agency's enterprise value ahead of the owners' planned exit.
What changed
| Area | Before | After |
|---|---|---|
| Revenue model | More than $2M a year in unpredictable, project-by-project purchase orders | A fixed monthly base fee worth high six figures a year, with upside from work beyond the base |
| Visibility | Spend scattered across buyer groups | One view of the full relationship by buyer group |
| Forecasting | Weeks ahead, at best | Base revenue known months in advance |
| Client experience | A new purchase order and approval for each project | One agreement, a dedicated team, predictable monthly spend and faster starts |
| Services | Limited to what each purchase order covered | Value-added services layered into the agreement |
| Investment | Hand to mouth, month by month | Capital invested in new strategic areas |
| Leadership | Senior hires too risky to commit to | World-class leadership brought in |
| Revenue quality | Project revenue a buyer would discount | Contracted, multi-year fees from a blue-chip client |
| Enterprise value | Held down by unpredictable revenue | Millions added ahead of a planned exit within 24 months |
