Spend Matters welcomes another guest post from Darren Woolley of TrinityP3.
I was prompted to write this following posting an answer to a question on the iPhone app Quora. This app is a question-and-answer website where questions are created, answered, edited and organised by its community of users. The question asked was “Is it normal for my agency to charge me by the hour for attending meetings? If there are two people attending a meeting for one hour at $100 per hour each, should they charge me $200?”
Quite a few people answered that time is money and so of course the agency would charge for their time. After all, the agency is recovering their costs with these fees. If the agency were pitching for business, this would not be charged, but that is a different discussion. I was more intrigued that their agency had clearly, from the example given, not deployed the Client+2 strategy.
What is the Client+2 strategy?
This is an artifact of the industry service mentality, where resources equal services. In practical terms it equates to the fact that at every client meeting the agency will send along one person for each client attending, plus two more at least. Therefore if there are two clients the agency will send four people. If there are six clients the agency will send eight people and so on.
You could argue it is strength in numbers, but it appears to be more about the demonstration of resources to deliver the service expectation and the depth of resources available to the client.
Where is this most noticeable?
We first noticed this in the pitch meetings. When we provided the agency with the list of clients attending the meeting, the agency would then respond with the list of agency staff attending, and it was always at least two more than the number of clients. This can make for some comical meetings, especially when they’re held in a smaller room at the client’s offices. In comes a huge contingency from the agency and there are not enough chairs or space for everyone. I know many clients ask to meet the team that will be working on the business, but sometimes it becomes ludicrous.
It also becomes noticeable when we are benchmarking an incumbent agency remuneration model. We will often find the level of account management that is more than double the benchmark expectation against the delivered scope of work. In conversations with the client and agency on this, it became obvious that the weekly WIP (Work In Progress) meeting was often indicative of the Client+2 strategy at work. The client would complain about the fact that every week the WIP would not only take two or three hours across all of the brands, but the agency would have more people in the meeting than there were clients.
Who are these people?
This is an incredibly telling observation. When the agency loads the meeting using the Client+2 strategy, the type of people added is instructional as to the purpose of the meeting.
If the agency group has senior management in the meeting, say the CEO or the CFO or both, then clearly there is a major issue or crisis that needs to be addressed. It is interesting that most marketers naturally detect that the arrival of the senior management of their agency means there is some crisis, even though at the time of the pitch they were promised these people would be intimately involved in the oversight of day-to-day operations.
If on the other hand the additional resources are simply making up the meeting numbers like the mute henchmen from an Austin Powers movie, then it is likely the agency is trying to either justify their current fee or preparing to ask for an increased fee based on the number of hours being over the allocated level.
How to counter the Client+2 strategy
There are a number of ways to address this issue and bring about alignment of expectations, depending on the circumstances.
1. The Direct Justification
This could be a little confrontational for some, but one of our clients simply walked into the meeting room and counted the number of agency people there before asking each of them to tell him their role in the meeting and more pointedly how they added value.
2. Set Expectations
It is simply a matter of discussing with the agency your expectations. If you want a one-on-one meeting, tell the agency, otherwise you will get three turning up, or more. If Work In Progress becomes a Who’s Who of agency personnel, let them know who you expect to be there and who not.
3. Use Meeting Agenda
Another approach is to simply reinstate or introduce traditional meeting management, having the agency and the marketers issue a meeting agenda prior to any meeting that includes the usual details including time, date location, topics to be discussed, and attendees required.
4. Limit Your Team
Avoid the escalation that can occur with your team growing in meetings with the agency to match the agency team numbers. Then they add two more and on it goes. Consider carefully who on the project needs to be there and who does not and stick with it.
The agency is not a pack of hyenas roaming the client hallways looking for a fresh kill. They should be driven by their desire to demonstrate and deliver a level of services. In a service industry, where people are the delivery of that service, the best way of doing that is bringing more people to the meeting.
But if they are not adding value in the meeting, then the best way is to arrange for them not to be there. Not hard really, is it?