What is the “aha!” moment when a marketer should realise that their company needs a new agency?
Client-agency tenure the USA is receding alarmingly: from 7.2 years in the mid 80’s, to 5.1 years by 2000, to hovering at an estimated 3 years in 2010.
Why so many bad marriages and quick divorces? What is the “aha” moment when a Marketer should realized “our company needs a review and select a new agency”?
There is no “aha” moment so much as an “aha” evolution. It starts when you realize that the agency is losing the passion for your business, and you are not as important to them as you once were. They stop being obsessed with your needs. And they stop coming up with smart ideas that drive sales.
The recession helped accelerate breakups as companies and advertising campaigns underperformed. But relationships don’t implode suddenly. They crumble when the foundation of the relationships, the way the agency was selected, is flawed. These are critical inputs for marketers for a successful relationship, based on our experience with over 300 agency search engagements:
First, a good selection process will reflect a diversity of considerations. Some search consultants screen rather than search and limit it to agencies competing “within their crowd” – one type only. We believe that a multi-faceted approach, resisting “one size fits all”, and based on a rigorous analysis of client needs, yields better results.
Second, do talk about compensation early in the process and have an honest discussion about expectations. Failure to properly define the scope of work and the cost is only setting up both parties for conflict later on.
Third, the lens by which we view the potential of the client-agency relationship is the agency’s ROI culture. A commitment to accountability and multi-disciplinary measurement models defines performance-oriented agencies.
Fourth, a forward thinking agency should have a pretty good point of view about how social media, and technology are changing the business. Have they made themselves more digital? What old-fashioned practices have been abandoned? How have their tools evolved to reflect the need to integrate an idea across different channels?
Fifth, understand of what lies ahead. You’re not hiring an agency’s past, you’re hiring its future. And that future, while somewhat informed by previous accomplishments, is more likely to be a reflection of an agency’s vision, the people it’s hiring and its willingness to embrace what’s coming rather than preserve what’s been.
Sixth, we ask for five creative ideas that they admire that aren’t ads. You want to know that they are as committed to all the non-traditional platforms as to the 30-second spot.
Seventh, and most important, identifying the team that will work on the your business. Talent is everything. You would want to know what qualities the agency looks for when it hires. Curiosity? Hands-on strategists? People who work collaboratively?
Eighth, set expectations. For your team to collaborate during the agency review, agree on your needs and expectations before you start. Agree as to what kind of agency you want. Decide whether you need a firm that excels in image advertising, or perhaps you prefer a hard-sell, results-oriented retail agency. Decide if you prefer a multi-office global network or a creative hot shop. Make sure that your objectives are strategic and fit your culture.
Ninth, decide who are the deciders. Everybody on the marketing team will want to participate in the agency selection. Taking part in a search for a new agency is exciting and fun. However, giving equal weight to all opinions ignores the fact that different managers have different levels of experience, and sometimes, different expectations. Fewer people, and more senior people, make for a better selection committee.
Tenth, don't choose by price alone. Price matters, of course, especially in today's challenging environment. But squeezing the agency's bottom-line unreasonably might be counterproductive. It could result in downgrading the quality of talent on your business and dilute the service. Instead, pay the agency fairly and increase savings by improving operational efficiencies. You are hiring an agency for the quality of its output, so avoid letting cost be the tail that wags the dog.
An agency evaluation is an important, and often underused, aspect of optimizing client-agency relationships. Here is a quick summary of our agency evaluation Best Practices.
1. Purpose is to improve and optimize the relationship (and define how the agency is contributing value).
2. Capturing the verbatim as important as important than the numbers.
3. Conduct midpoint evaluation or “temperature check” during the year especially for “problem” agencies.
4. Develop Joint improvement plan, decide who (client/agency) owns initiatives, and agree to timetable.
5. Create environment of confidentiality to capture two-way dialogue.
6. Don’t mail the report to the agencies; a robust in personal meeting is required for transparency.
7. Concentrate evaluators on those closest to agency operations.
8. Enabling on line tools will streamline the process and will increase participation.
9. Develop similar systems for specialized agencies – most are under-audited.
10. Capture mastery, not merely functions. Evaluate the agency on value-added basis.
11. Evaluations are an important part of agency compensation, either directly or indirectly. Agree to benchmark.
12. New Agency Relationships—don’t wait for a year to evaluate! Evaluate after six months to ensure that the relationship is on track.
13. Send a new agency an example of what the performance review looks like. Make sure that expectations are established.
14. Begin the relationship with a partnership pledge (performance contract) what the agency will do and what the client will do.
4P's Is The Leading Business And Marketing Publication In India. This Article Was Part Of A Special Issue About Agency Selection And Client-Agency Relationships.