Key Questions to Ask When Vetting Digital Product Agencies (Part 2)

Jenna Rodrigues
February 9, 2021

In part 1 of this series, we discussed how to hire a digital product agency by evaluating cultural fit. Now, let’s look at the “what happens when the rubber meets the road” part. After all, you need a digital agency that’s set up to get things done and deliver the goods!

As such, you can’t afford to overlook the administrative side of things when vetting a digital product agency. We get it… these logistics tasks aren’t glamorous except to our project management wonks (and their relentless attention to detail sometimes drive us up the wall!) But you’d likely get hampered by errors and delays if an agency fails to manage the timeline and budget of your project properly.

Pull out your clipboard and make sure that your agency has its administrative act together by asking these questions:

1. How Will You Develop the Project Timeline and Scope?

A project timeline serves to align expectations, avoid miscommunications, prevent disappointments, and set the foundation for a successful working relationship. It also helps everyone get on the same page and keeps each party accountable.

The milestones on the timeline can also be used as a starting point for discussing the details of the product development process. It helps ensure that the agency is addressing every step of the process, such as product strategy, prototyping, development, and launch.

Asking questions about the project timeline will help you gain a clear understanding of how a team approaches project scoping and timing the build. You should look for an agency with a value-focused discovery and scoping process that focuses on delivering tangible product features.

Your agency should provide you with a fixed timeline. This can help you accurately coordinate other activities, such as business development, to bring your new product and subsequent versions to the market at the right time.

However, a fixed timeline doesn’t mean you have to accurately forecast every single development requirement from the get-go. For example, you may need to adjust the feature set based on initial user testing. A flexible scope enables you to pivot during the prototyping and development process so you can get the highest return on your investment.

Your agency should be transparent about its project scoping process. It should also welcome your questions and take the time to understand your vision and expectations correctly. This can ensure that everyone is rowing in the same direction and the agency focuses on delivering the highest value in the form of completed product features.

2. How Will You Estimate the Project Budget?

A digital agency budget helps you understand how much it’ll cost to build your product and what you’ll be getting for your money. The last thing you want is to have a half-baked product that you can’t do anything with because you can’t afford the second half of the build!

While the initial budget and scope may not include all the features you want, you should make sure that what you’re paying for can take you to a point where the product can be launched.

Look for an agency that can provide you with a fixed budget, and will clearly communicate about how they’ll work to get you the most for that budget. It should also proactively help you prioritize the features for development so you can spend your budget on what matters.

A fixed budget is often tied to a fixed timeline and a set of assumptions. Your agency should tell you how changes in the overall scope or timeline (e.g., if you’re unable to provide feedback within the specified number of days) may impact the budget. Also, review all the assumptions carefully to avoid extra costs during the development process.

3. How Will You Bill the Project?

In most cases, the agency will bill you throughout the product development process. You should have a clear understanding of the agency’s billing structure so you can set expectations, avoid unpleasant surprises, and manage your cash flow. For example, find out how frequently you’ll be invoiced, the amount for each installment, and the progress or deliverables associated with each billing period.

Look for a digital product agency that bills based on value delivered in the form of completed product features by following what we call the “skateboard method” and associating the billing period with specific milestones or deliverables.

This ensures that the team is working efficiently by making small steps in the right direction and validating its approach at regular intervals (e.g., by getting your input or through user testing), instead of taking big swings in the wrong direction (and then saying “oops!” 3 months later).

Also, the agency should guarantee that the billing total won’t exceed the fixed budget you approved at the start of the project. The billing structure should allow you to fund smaller pieces of the product budget at a time, rather than making a single large payment for the entire budget all at once.

You should also ask the agency about how it handles additional features, enhancements, and maintenance. For example, if you want to reprioritize and swap a new feature for one on the original timeline, do they bill for that? How is extending the timeline and adding new features handled? Look for a team that will offer you a fixed timeline, fixed budget, and flexible scope to avoid unnecessary markup and get the most for your money.

The Nuts and Bolts: Key to Getting the Most Value From Your Digital Product Agency

A clear and mutual understanding of the project goals, timeline, budget, and billing arrangement sets the foundation for a fruitful partnership with your digital product agency. It eliminates ambiguities that could lead to disagreement and disappointments, which can derail the progress, impact your time-to-market, and affect how quickly you can start generating revenue.

Getting clear on the nuts and bolts also helps you develop a trusting relationship with your agency. When an agency works with you on the scoping and budgeting process transparently and collaboratively, it’s a good sign that it truly put your product’s success front and center. Having past clients who vouch for their ability to treat your business with no less care than their own goes a long way, too!

Use the questions here to help you identify an agency that has what it takes to build you a killer product on time and within budget. A successful launch can also be the beginning of a lasting partnership in which your agency will become your portfolio partner to manage your full range of digital products to achieve the highest long-term ROI.

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