Managing the Creative Agency After the Pitch

Spend Matters welcomes a new guest post from Daniel Jeffries of Jeffries Consulting.

The ink is dry on your big ticket marketing agreement, the surviving champagne flutes are back in the glass cabinets, and (after the creative directors sleep it off for a week), now it’s time to roll up your sleeves and get back to work. What happens next?

We assume that a very high percentage of the Spend Matters community are well-versed in at least the basics of supplier relationship management. But marketing is a different beast. How do you drive ongoing value from your new marketing partner – the agency – and avoid a downward spiral of decreasing performance?

Pick up any marketing industry publication and you will likely see an article about some client running a pitch to find a new advertising agency. The proliferation of agencies and the various services they provide (media, advertising, digital, PR, production, social) means not only a great deal of choice, but also that change is constant – as Heraclitus put it so long ago.

The reasons for change are varied. But it can often come down to the personal element of the client/agency relationship, and successful agencies know this. Winning business is tough and costly. Retaining it can be even tougher and costlier.

Relationships – Agencies have long known that relationships with their key clients are the lifeblood of their business model. A strong bond with a CMO can lead to a lifetime of value for an agency; it’s not uncommon to see a CMO move to a new brand and bring in a favorite agency within the first year in the new position. There is nothing wrong with this, of course, but it does highlight the need to build strong relationships based on trust, commitment, and mutual success. If the client does well, the agency should also be doing well.

Enter the bad guys, in marketing’s view: procurement. In many corporations, marketing spend makes up a significant proportion of indirect spend. Therefore, a good deal of effort is made to “achieve savings” in this area. Traditional category management approaches often focus on the larger areas of investment (media, creative, and production) and many category managers earn their crust by running RFPs that help “drive down costs” for the company (sometimes to the detriment of the brand’s advertising effectiveness).

With so much effort being put into the ‘front end’ of the client/agency relationship (just look how much agencies invest in ‘new business’ pitches), are we missing the opportunity to then ‘manage’ those relationships once we fly past the pitch and contracting stage?

Agency SRM is missing – In this area, SRM is often left to the marketing team with little support from procurement beyond a standard check-the-boxes questionnaire. Proper (and effective) agency management requires a knowledge level and skill set that many businesses have not yet invested in. Let’s face it: there’s a very real scarcity of truly capable marketing category expertise out there. And where it does exist, it’s normally employed in the front end of category management.

Agency relationship management – Some brands have recognized this opportunity and are deploying specific talent dedicated to managing agency relationships can actually drive significant value. Having a focus on what happens once the dust has settled on an agency pitch allows the client to continuously get the best out of their agency relationship by:

  • Reflecting on how the agency is delivering against its promises
  • Objectively reviewing how the agency works with the brand’s other partners
  • Offering (and receiving) feedback in a clear and timely manner – avoiding the “emotional feedback” that’s all too common
  • Getting in front of issues as they develop to ensure that they are handled in the right way for the brand and the agency
  • Being the voice of reason for the brand’s expectations of the agency
  • Recognizing where the relationship is in the agency/client lifecycle and managing the agency accordingly (more on this in a later article)

The main barrier to success?  Why, it’s procurement and the “drive for cost savings.” If marketing and procurement leaders can work with their internal clients to design a common measurement of value improvement, they’ll be in a much stronger position to deploy top talent on relationship management.

If procurement teams want to make a lasting difference for their brands, they need to understand that managing a long term relationship with a key agency partner is just as effective (if not more) than pitching the account to get a keener price.

Remember, the bitterness of poor quality remains long after the sweetness of low price is forgotten.

In a later article, I will further define the agency relationship management role.

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