Really insightful article in this week's Ad Age by Tim Williams and Ron Baker on client-agency relationships and the need to move from cost-based to value-based compensation.
At crayon, we are moving forward aggressively on a hybrid value- and performance-based pricing model as a foundation for engagements.
Here are a few phrases or ideas which caught my eye, with some accompanying Juice:
Value is relative. A client's definition of value is different to an agency's. I know that sounds obvious, but it does speak to a misaligned set of expectations and realities.
How marketers believe agencies create value:
- Working in a collaborative way with the client by creating an environment of mutual respect.
- Ensuring that agency functions are integrated and agency divisions collaborate on behalf of the client.
- Developing and producing creative ideas that are fresh and unexpected.
- Developing ideas and programs that can be integrated into multiple communications channels.
- Developing solutions that go beyond traditional approaches and reach consumers in new ways.
How agencies believe marketers create value:
- Giving the agency the necessary time and resources to do its best work.
- Working with the agency in a collaborative manner that puts a premium on mutual respect.
- Identifying and articulating the outcomes the agency's work is expected to produce.
- Providing clear, complete direction to the agency.
- Providing constructive, timely feedback to the agency.
Many of these drivers are basic rules of engagement and yet how many of them are delivered? Agencies typically do not respect their clients and ultimately believe they are superior to their clients. To me this is clearly evidenced in the other agency perceived drivers which basically state that clients are nothing more than glorified clerical staff: get out of our way and let us do our jobs!
Yes, there is truth in that statement, but surely marketers bring more to the table.
On the flipside, marketers are fixated on integration - not just between mediums, but between silos, departments, divisions and other collaborators. And yet, their agencies have been unbundled and fragmented to create more silos. And to make matters worse, the marketers' organizations are no less siloed as the agencies that service them.
Which leaves my special interest: the ability to energize brands with a bold mix of alternatives to traditional advertising. New Marketing is no longer a, "yeah, we do that", but a holistic and strategic imperative.
The article continues with a discussion on efficiency (input) versus effectivenes (outcome) and the definition of chief value drivers - things customers care the most about. My CEO always talks about understanding "how clients buy", but I'm wondering whether we shouldn't be focusing our efforts on "how clients sell" in order to get closer to this common goal.
Anysome some food for thought. Check out the entire article and drop your thoughts as you see fit.
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