Collaboration? Two-way communication? Transparency? Respect? Certainly. But these positive relationship traits are present in many client-agency relationships that fail to withstand the test of time. Thus there must be another reason that the average tenure once measured at 7.2 years in 1984 and 5.3 years in 1997 and pegged by many at less than 3.0 years today continues to wane.
The factors often cited for this decline include; client-side marketing turnover, shortened tenures of CEOs and CMOs, agency leadership turnover and clients outgrowing an agency’s capabilities to support their marketing needs. There is no question that these events can play a contributory role in changing the dynamics of an advertiser’s relationship with its agencies. However, these are also factors which have been effectively dealt with by advertisers and their agency partners enjoying long-term relationships.
Think about the typical start to a client-agency relationship:
- Review conducted
- Agency selected
- Contract negotiated
- Work commences
- Both parties settle in to the day-to-day pattern of creating and distributing ad messaging
Most experienced marketers and agency executives have seen this routine repeat itself time and time again. The common denominator is that events progress from a competitive review to initial campaign development in short-order at the expense of a deliberate, considered on-boarding process. Out with the “old” partner and in the “new” with virtually no transition overlap or time for the new agency to truly get up to speed on a client’s business.
So what is the missing link? Most advertisers have not embraced the discipline of supplier relationship management (SRM). Too often, advertisers invest few if any resources in strategically planning for and managing the interactions with each of their agency partners or in clearly identifying the roles and responsibilities of each agency in their marketing services vendor network.
Letters of agreement, statements of work, agency staffing plans and remuneration agreements are necessary relationship management tools which provide guidance to both advertisers and agencies in the area of contractual expectations, controls and reporting. However, few would consider these items as a replacement for sound operational planning that clearly lays out a governance framework, the tenets of organizational interactions, expected behaviors, ground rules for collaboration and a definition of what constitutes success in the context of the relationship and in-market performance.
When one considers the size of an organization’s marketing budget and the importance of that investment in the areas of demand generation, brand building and share accretion it is curious that the industry hasn’t more readily adopted SRM.
Changing agencies is costly and can be fraught with risks to an advertiser’s market position and financial performance. Thus it stands to reason that an organization should be prepared to make the requisite investment in its marketing supply chain to develop solid, long-term agency relationships predicated on the effective and efficient stewardship of their marketing spend to attain superior results.
Given the potential benefits of SRM to marketing agencies, it is a wonder that they are not leading the charge on this front as a means of extending their tenure and enhancing their positions as strategic contributors to their clients’ business. Regardless, the benefits to stakeholders on both sides of the client-agency relationship are to numerous and meaningful to ignore.
So, if you’re contemplating a change in agencies, use the event as a starting point for the application of SRM to your organization’s agency network. In so doing you just may reap the benefits of the words intoned by Henry Ford;
“Coming together is a beginning. Keeping together is progress. Working together is success.”