Clients and Agencies Need to Ditch the Pitch

Agencies need to initiate a quotproductivity and valuequot assessment of a current relationship before the end of a contract and recommend whatever changes are necessary This assessment should include reviewing various aspects of the relationship in terms of the certainties and uncertainties that surround each The fact is even after many years ongoing relationships are a mix of certainties and uncertaintiesRelationship CertaintiesIn the certainty category there is a wealth of financial information hourly rates direct salary costs overhead costs profit margins billable hours per year costs per FTE number of FTEs direct cost multipliers quoteffectivequot media commissions ie fees divided by media spend outofpocket spends and production spendsAs impressive as this quantity of information is it tells us very little about what is important for clientagency relationships Describing a relationship with this kind of information is like describing an automobile by noting that it has a body engine transmission wheels brakes steering wheel windshield lights seats and doorsRelationship UncertaintiesSadly many of the uncertainties amp8212 important as they are amp8212 receive little attention from either clients or agencies Here are some alltoocommon examplesWhat is the purpose of the relationship Is it to drive improved performance or ensure that the relationship operates on a masterservant basis at the lowest cost Does the client have a clear concept of what the relationship is supposed to accomplish Is the relationship completely aligned with what the chief marketing officer is supposed to accomplish on behalf of the chief executive officerIf improved performance is an objective how aligned is the scope of work and the decisions that come out of it Is the media spend appropriate for the performance objective Is the media mix by channel What about the creative deliverables The number of deliverables The share of originations versus adaptations in the deliverables mixFor the scope of work is there recognition of the need for the right mix of senior and junior FTEs on the agency team What should be the appropriate mix How much output is required for each agency FTE What is an appropriate productivity level Is the current productivity level appropriateHow much complexity is in the relationship due to the various requirements and processes such as planning budgeting briefing obtaining approvals reworking buying analyzing and reporting Is the relationship characterized by decisiveness or indecisiveness How many iterations does it take between agency and client people to advance each process step One iteration Two to five Six to 10 More than 10 What explains the number of iterations in each process Can it be simplified and improvedHow does organizational structure affect operational efficiency Is the client organization heavily siloed or matrixed How many touchpoints are involved for each of the channels If there are inhouse agency operations do they add an additional layer of complexity and increased interactions or do they contribute to efficiency in some wayThese questions and others like them remain below the surface and are skipped over when a review is called They are certainly important When relationships underperform which is the usual case it is more likely due to inattention to these matters rather than issues relating to agency costsAs Ed Koch the former mayor of New York used to ask obsessively quotHow39m I doin39quotClients and agencies need to ask the same kind of questions Every aspect that matters in the relationship should be open for evaluation particularly at the end of a contract period Fixing what doesn39t work makes much more sense than going out to find a new partner gathering reams of new financial information and leaving unasked the very questions that determine whether or not the relationship will succeed or failOf course if an agency is not delivering improved performance and the reasons are due to lack of focus or capability then an agency review and pitch will most certainly be requiredTo facilitate the quotvalue and productivityquot review we recommend the use of an objective third party who can gather the detailed information and present it fairly for the consideration of the agencyclient partnersWe do not recommend the popular suppliers who provide superficial quotpromoterquot or quotrelationshipquot scores These suppliers with their superficial scoring system and absence of data miss the mark in too many ways Our analysis shows that even when agencies have high quotpromoterquot or quotrelationshipquot scores they only have a one in five chance of retaining the business That39s because scoring systems measure affect rather than relevant data and in any case procurement has a bias towards rebidding relationships at the end of contract periodsPure logic suggests a different path Agencies need to preempt rebidding by initiating value and productivity reviews engaging appropriate third parties and then sellingin the concept to their clientsClients and agencies can then quotditch the pitchquot and instead ask in a sophisticated way quotHow are we doin39quotPhoto credit Robert Weber The New Yorker The Cartoon Bank With permission Click the social buttons to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Clients and Agencies Need to Ditch the Pitch

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Michael Farmer

FEMA and the Ad Council Encourage AANHPI Communities to Enhance Disaster Preparedness in New PSAs - Ad Council InSites

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Clients and Agencies Need to Ditch the Pitch

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