Why this is the Right Time to Hire a New or Replacement Ad Agency and Others
Is your current agency or in-house group providing creative and tactical ideas for developing relevant online content during these COVID-19 and country-wide rioting disruptions in business? Are they thinking about how to use this time to help you creatively drive engagement, traffic or calls to your business? If your business has lost internal marketing support is your agency stepping up to fill in those gaps? Regardless of the challenges we all face, there are ways to continue to market and promote a brand. Finding the right PR, digital or marketing agency can transform these challenges into opportunities.
COVID-19 has given us time to think. If you have anything to do with marketing, this disruption is likely causing a lot of indecision. Hiring a marketing, digital or PR partner is about identifying the right agency and talent that understands your industry and how to mitigate the uncertainty of the pandemic. They must have a firm understanding of what it takes to continue building brand awareness and sales. If you have an agency or in-house department that is not pulling their weight, use this time wisely to consider searching for a new partner.
There’s the temptation to search for an agency “type.” As in digital, experiential, direct, integrated, public relations and so on. Don’t start with type. Start with experience. Does this agency have relevant experience in your industry, do they understand the nuances and personalities of the people you are targeting? Do they have the right type of talent, experience and background that brings fresh thinking? are they equipped to work remotely with your company and team to turn projects around on budget and deadline? Are they willing to share meaningful insights that can help accelerate the growth of your brand? Are they the right size, fit, responsive and willing to do what it takes to ensure the seamless execution and implementation of any marketing challenging?
In the final analysis, many options exist for identifying a new marketing partner. Many of which are impersonal and lack the insights, details and information necessary to make a good decision. For over 20 years we’ve been connecting marketers and advertisers with agencies and agencies with new clients. We provide an elegantly, curated, powerful, complimentary and efficient, platform to identify and evaluate agencies. The combination of an on-board search engine and extensive agency-produced profiles allows for identifying and targeting the most appropriate candidates.
So is it the right time to find a new marketing partner? See for yourself. There may be the perfect agency just waiting to help through these uncertain times. And the recent turn of events that lead to rioting has added another unheard of challenge. You have nothing to lose and you may be surprised at what you’ll find.
How about it; do you find the pre-COVID commercials showing life as it was a sometimes irritating, annoying reminder we can’t live that way today? Spots showing large gatherings at backyard barbeques; youngsters sitting close on the beach for a beer and bonfire, we’re not there yet. Some brands do show masks and distancing, even voicing the need to take it slow. But most have not.
Understandably no brand wants to bear the messaging burden alone, so how about… would it make sense for the 4A’s, ANA, and the many other agency associations to come together to create PSA’s to address the situation? With positive, upbeat messaging guiding people to a clear path. There’s been nothing like that yet. Corporate and agency cash reserves and personal savings only go so far. Everyone has a stake in that game and it needs to be played. You can play your part beginning here.
Use our dashboard tools and you’ll be pleasantly surprised to discover how quickly you can scope out the critical baseline needs for your new agency. Menu items guide you forward and the counter shows “how many.”
Our thousands of enrolled agencies constructed and compiled (not curated) the content of their individual profiles. These advertising, digital, integrated, public relations and experiential firms chose to describe themselves selecting from an array of 500+ data fields representing:
a. category experience
b. services offered
e. years in business
f. capitalized billings
g. and much more.
Advertisers and search consultants are entitled to complimentary services. Try it now for yourself.
Many agencies like to boast on their websites and in their pitch decks that they “partner” with their clients. It’s bullshit of course. What they mean is they aspire to have their clients treat them like partners instead of vendors. I get it. It’s good to have a goal. But putting it on the website doesn’t make it true.
True business partnership has at its core shared financial risk. So if you really want to partner with your clients you must put skin in the game. Your incentives need to be aligned, with compensation rising and falling with the results you help to produce. In the absence of such shared risk, claims of partnership are simply a desire to earn a higher station with the client. Everyone knows this.
You Don’t Want to Partner With All Your Clients
When it does happen, a client/agency partnership can be a beautiful thing, but many times it shouldn’t happen at all. You don’t go into business with just anybody. You partner only with people you trust. On that basis alone (and there are many more to consider, as well) how many of your current clients would you really want to partner with?
And how about the clients you pitched to, lost, and who left you with a bad taste in your mouth? How many of them would you want as business partners? Were you even able to have a meaningful conversation with the people with whom you proposed to partner? Surely you don’t think procurement or middle management are your partners? They simply don’t have the authority to make such decisions. And on your side, neither do your own people. Decisions to enter into a business partnership are made at the highest levels of the organizations—at the ownership level of an independent marketing firm or any other entrepreneurial organization, and at the executive level of a client organization where ownership and management are separated.
A Normal Distribution of Client Types
In a healthy client roster you will have a mix of client types. On the left-hand tail you will have a small number of transactional price-buyers to whom you are effectively selling excess capacity, and once-good clients on their way out.
In the middle you will find the bulk of your clients, made mostly of value buyers who, though they might be price sensitive, understand they need to invest in your services to generate value in the marketplace.
And out on the right-hand tail you might possibly have a coveted partner. Maybe even three.
Once you get the hang of this performance pay thing, you may decide to be more selective about your clients with the goal of one day having all of your clients be partners. But that’s a path few firms will choose and fewer still will be able to master. Most will choose instead to spread the risk across many engagement types with the bulk of their engagements being in the low risk, low reward category.
The Rise of Performance Pay Lip Service
Every few years there’s a spike in clients’ use of the term “performance pay.” Well before I knew anything about the intricacies of value-based pricing, I knew that when a client brings up performance pay in the sale they usually have a narrow, one-sided idea of it—one in which the agency is penalized for poor performance without the ability to earn a sizeable reward in return for putting compensation at risk.
Such a one-sided deal usually comes from procurement or other professional buyers. While you can’t really blame someone for trying to minimize their downside without sharing in the upside, such a suggestion should immediately disqualify them from the category of potential future partner.
Questions To Ask About Performance Pay
Punitive, reward-deficient deals aside, I’m a big fan of performance pay as an occasional way to shape a compensation plan. Here are some questions to ask the next time you consider partnering with a client and putting compensation at risk:
Are you talking to executives in the organization—people charged with future value creation who have the authority to enter into partnerships?
Do you trust these individuals?
Do you trust the organization to live up to commitments made by these executives should they leave mid-engagement?
Does the organization have a culture of partnership and disclosure? Are you confident that finance, procurement or some other individual or department won’t attempt to manipulate the numbers or actively work against you to rob you of incentives properly earned?
Does the upside correlate with the downside? There’s no golden ratio here but every dollar put at risk should have the potential to earn multiples back.
How much compensation are you willing to put at risk? A good client will in certain situations recognize that it’s in their interest to reward you for outcomes even without putting compensation at risk, thus creating the incentives for you to stay involved even after the agreed-upon deliverables have been met. But per the point above, the more you give up the more you should receive when the target outcomes are achieved.
When the possible payout is measured against time, is someone in the client organization going to push back on compensation that might translate into an hourly rate in the high hundreds or even thousands?
And of course, you have to ask questions about your own role:
Are you confident in your ability to affect the outcomes?
Can you solve the attribution problem, with both parties agreeing that your input is material to hitting the outcomes, or are there simply too many other variables at play?
Can you afford to take a financial risk with this client at this time, or are you better off just trading time or deliverables for cash?
The Transformative Effects of True Partnership
Just like other forms of true partnership, when you get it right it’s truly win-win. It requires two trusting parties and a delicate balancing of the risk and reward—a balance that is not universal or templatable but rather takes into consideration many unique factors of each party.
In such a partnership, the client has an agency that is laser-focused on outcomes and is not padding time or rotely going through yet another templated deliverable. The agency should be operating at this place of adventure, with the excitement of oversized reward balanced by enough downside risk to keep their attention but without threatening their existence. When it all comes together it’s a beautiful thing.
As an industry, we need to let go of this need to claim partnership with our clients and embrace the fact that some of these relationships are purely transactional. At the same time, however, we should keep an eye open for those wonderful but rare opportunities for true partnership.
Guest Author, Drew McLellan of Agency Management Institute
Each spring, I walk my live network members through the trends that I have been tracking and believe are going to impact the coming year. One of the trends I am going to be talking about this go around is a pretty ugly one. Clients seem to have much shorter fuses when it comes to agencies these days.
Clients are literally picking up the phone (or worse, sending a break-up email) and pulling the plug on the unsuspecting agency with no forewarning, discussions about dissatisfaction, or severance time frame. It’s a “hi, effective immediately or if they really generous — to the end of the month), we’re moving on. Thanks for your service.”
I am seeing it happen to big agencies from big brands (both B2C and B2B) and I am seeing it happen to smaller agencies with local or regional brands. I don’t get a sense that there’s any geographical aspect to this either.
There have always been horrific break-up stories but in the past, when an agency and client went their separate ways, there were some conversations, some expression of discontent and some time period to re-earn the trust of the client.
That seems to be less common these days. So what do we do about this unpleasant trend?
Are you (the owner) investing in building a relationship with your client’s CEO/owner/leader?
When was the last time you invested in a client satisfaction survey and reacted to the results?
Are your AEs helping your clients achieve business goals and tackle business problems every single day? (Do they understand strategy enough to do that?)
Are you holding regular (quarterly for large clients, annually for smaller ones) celebrations/planning events with your entire client and agency team?
We can’t just sit back and let this trend kick us in the teeth. We need to be proactive now so we can dodge the impact of this new wave of bad manners and bad break up etiquette.
What else are you doing to make sure you aren’t on the receiving end of this trend?
If you’re like most agencies, you are still primarily using the billable hour payment. This model relegates you to a manual laborer rather than a solution-driven partner. It also puts you and your clients at odds, rather than forging a better alliance. The good news is there’s another way.
Why do agencies use the billable hour?
The main reason agencies still rely on the billable hour model is because this is how it has always been done. Change rarely comes naturally, whether we’re talking about individuals or large corporations. People find it easier to keep doing things the same way instead of learning a new system. And truth be told, billing by the hour is definitely an easier process because most agencies are set up to track employees’ time.
But this method no longer works. It’s outdated. Back in the days of heavy media buying, when the lion’s share of billing was based on commissions, this method was great. But today’s market is drastically different, and it has different needs.
What’s wrong with billing by the hour?
This model is to the disadvantage of both the agency and the client for a number of reasons:
It puts you at odds with your clients. They want to spend less, and you want to earn more. You don’t get the opportunity to work together to discuss the value of your work, so one or both parties are usually dissatisfied with the payment.
Similarly, it creates risk for clients since they don’t know how many hours of work you will need to do to complete the job. They’re forced to accept whatever bill you give them, which can make them suspicious and wary of you.
It implies that agencies make “stuff,” rather than create ideas or business solutions.
It penalizes agencies for technology and other advances that make agencies more efficient.
It prevents you from setting the price in advance, which keeps everyone in the dark until the final bill arrives.
Finally, and perhaps most importantly, it makes you like every other agency in town. If you update to a better model, it communicates that you are pushing ahead of the competition and are not trapped in old methods. This kind of change can make you a leader in your field.
Solution: The value-pricing model
In the value-pricing model, the client and the agency discuss the business outcomes that will be delivered as a result of the work. They set measurable, smart goals and determine the value of achieving those outcomes.
Here’s an example: Let’s say a client in the banking industry would like to get 200 new checking accounts from advertising efforts. The bank’s marketing manager determines that the lifetime value of a checking account customer is $500, so achieving the goal is worth $100,000 in new revenue. She also determines that the bank has a 50 percent close rate on selling a new checking account. So the campaign needs to drive 400 prospects into the bank in order to open 200 new accounts.
The agency can’t be held responsible for the actual sales because there are too many variables outside of its control. But it can present a program that will drive 400 prospects through the door. The agency can now present different options for driving inquiries about checking accounts. The agency knows that the proposals need to be priced in a way that creates a profit for the client. It’s then the agency’s job to deliver the specifics of the proposal within budget.
The client couldn’t care less how many hours the job takes. What the client cares about is results. As long as the agency creates more value than the price it charges, everyone wins.
This process is a much more balanced way to charge the client and to compensate the agency. The client pays for value, not stuff, and the agency is paid based on the success of its efforts, not how much time it took to accomplish the goal.
Value pricing makes it easier for your agency to build strong relationships with your clients because you’re both pulling for the same outcome. In this new model, the clients are in control of the price-to-value ratio, and they are happy that you are making a profit because they are paying for results. You can argue over hours billed, but it’s hard to argue with results.
If you’re still using the billable hour, it’s time to revamp your pricing model. You can stand out in the crowd, create agency-client relationships built on trust and common goals, and benefit from high efficiency. I don’t know of a single agency that doesn’t want those improvements.
AgencyFinder suggests – you won’t be the first, but how about it?
Our company matches advertisers with qualified marketing firms, so we constantly field requests for branding firms, branding services, or just for branding. Conversely, it seems every agency today declares themselves to be a branding or digital agency. So just like media alternatives have grown to a complex set of options, so have the meanings of branding and marketing. Here are some versions that may help simplify things.
Start with Branding. The one I like says it’s the essence of a product or service. “The intrinsic nature or indispensable quality of something, especially something abstract, that determines its character.” Or “a property or group of properties of something without which it would not exist or be what it is.” Accordingly, the toolkit of adaptations agencies claim they can bring to bear on branding generally seem reasonable, but they generally serve as participles to the noun branding. Does it seem reasonable then that the essence of anything could serve to promote itself? Any more than a race horse could win a race without running?
That’s where marketing comes in. Marketing runs the race. Some say “Marketing is the process of bringing goods or services to market.” How’s that for simple! Marketing then as an all-encompassing concept is far-reaching. It could include research, advertising, public relations, direct marketing, social media, experiential and more. Curious then how digital fits in that set. Yet most agencies today are want to declare themselves as a digital agency. To add to the confusion, it seems everyone pontificates about branding and marketing. Since those conversations will undoubtedly continue, in the meantime I hope this helps.
The best client-agency relationships are built on trust and mutual understanding. When you take steps to manage client expectations from the get-go, you will maintain that strong relationship through the ups and downs that are bound to happen when marketing firms and clients team up. We are all human, after all.
Think back to the last client you brought onboard. More than likely you spent ample time preparing to win them over. This includes meetings, presentations, potential brand renderings, timelines, strategies, and budgets. You were living and breathing that client. And sure, when the good times are rolling, it’s a snap to keep the client relationship healthy and satisfied. But what about when that roll hits a speed bump? It takes experience and attentiveness to keep the trust going so you can maintain the client’s relationship and their expectations. Utilize the following tips to improve communication and manage the client:
1. Stick to the agreed upon strategy.
The agency and client should always be on the same page. You are grabbing a one-way ticket to an uncomfortable conversation with your client when they are expecting one thing and you are expecting another. Everything that you do for them should be defined ahead of time so there is no confusion when the numbers start rolling in. For example, if the client has a different expectation of a certain goal than the agency does, it is only a matter of time before there’s a collision and the relationship gets a kink. Choose a strategy with the client and create a document that outlines everything. If you do this, you are less likely to receive pushback down the road.
2. Don’t just have a client-agency relationship. Have a true relationship.
Not only is it more pleasant to meet and work with a client, but it makes the relationship that much stronger and understanding when you know the client on a personal level. Take the time to have interest in their lives, whether it’s their family life, their favorite places to eat in the area, or what makes them get up in the morning. Having a relationship built on more than business builds a foundation that allows for more accurate strategies and exceeded goals.
3. Stay in control.
Remember, the client came to you for help. You should be steering the ship from day one. You’re the expert. Whenever a client feels like they need to keep tabs on their agency you are in danger of losing that trust and more importantly the respect for your expertise. Stay true to the strategy outline, be transparent, and absolutely communicate. Some clients may be more difficult to guide than others, but it is important to remember that you are the leader and the expert. Show your confidence and it will transfer to the client.
4. Provide monthly reports of progress and success.
Oftentimes the client benefits more from seeing the big picture when they get tangible updates. As long as you are doing your job and the reports show movement every month, the client will appreciate having something tangible. Providing monthly summaries reminds the client of your value and the fruits of that labor. Even with constant communication, the lack of monthly reporting can mean the big picture gets lost in the shuffle. Before you know it, you’ll have angry client’s asking where that movement is. Still stay in contact regularly, but remember there is a great benefit to sending monthly analytics.
Do you have any tips for managing client expectations? Leave them in the comments below!
We ran across this “opportunity” the other day. When you consider all the flak border patrol agents have been getting; when you consider they are constrained in how they actually patrol or apprehend, not sure anyone will want to touch this “opportunity” with a stick! But here it is …
US Customs & Border Protection (CBP)
Opportunity: Needs a agency to provide strategic marketing and advertising services, with the goal of pitching CBP as a top career choice, according to the RFP.
Work includes: but is not limited to: (1) develop and execute a branding strategy that distinguishes CBP as an employer of choice; (2) develop and execute innovative and cost-efficient targeted marketing and advertising campaigns to attract female, minority, disabled and veteran candidates; (3) develop and implement innovative and efficient targeted marketing to attract highly-qualified candidates from science, technology, engineering and math (STEM) fields; (4) conduct market research to determine the most effective means to attract qualified candidates who come from the intelligence community, are proficient in foreign languages and who have the necessary certification to administer polygraph examinations.
Like so many RFP’s, lots of work described but no mention of budget – range or approval.
From getting briefs approved by VPs to avoiding shootouts, CMOs can institute plenty of practices to get better work — and save money. The article in question appeared today (May 13, 2015) in Advertising Age. Well written covering good ground. One comment by Ms. Rieter caught my attention and I wrote this …
Interesting and well written article citing the obvious by both Ms. Reiter and Mr. Strachan to begin. As for agency procurement or agency search, we’ve always argued “you can’t find a ‘right’ among a group of ‘wrongs.’ A successful agency review deserves some of the closest scrutiny of the process at the onset – where a reasonable fat handful of qualified candidates are identified. In an AgencyFinder review, we share that list with the client’s CMO for examination and editing. The edited group is invited to participate in a fairly linear process, but not at the exclusion of initial telephone dialogue.
I’m interested in the AmEx process Ms. Reiter describes – “For many of those marketers, choosing the right agency for the right project isn’t always obvious. So AmEx procurement has an online tool that helps marketers do just that, including case studies from the agency and a button to reach the right person at the agency to get started.” Love to learn more, will you share? Offline if you prefer.