A better way to choose a new Agency

The current #pitch process is decades old and is not working well.

The evidence is there for all to see. The average length of the relationship is down to 3 years. The average #CMO tenure is (not surprisingly) also down to around 3 years.

The process is very expensive in money for the #agency, and in time for the #advertiser. While the pitch dance goes on and takes up resources on both sides, competitors focus on building brands, which is what they both should be doing.?

Is there a better, faster, cheaper way to choose an Agency?

I believe there is. It focuses on the key factors that define a successful Client/Agency relationship and removes the “dog and pony show” elements from the process.

Here are the steps.

STEP 1: PARSE the Market

In every market there are hundreds of Agencies. Most of them will claim to be able to do everything the prospect might need because they are hungry for new business, and do not want to admit to anything that may disqualify them from the pitch. Unfortunately, it is not true. Every agency has its strengths and weaknesses. This does not mean that it not a “good” agency; it just may not be the “right” one.?It is therefore crucial that the Advertiser work with a search consultant to clearly define what sort of services and specialization they require, and have the expert parse the market and come up with a short list of Agencies that have the track record and capabilities to fit the brief.

STEP 2: PREVIEW the Client lists

It is a fact of life in advertising (and in every other industry), that the bigger your budget the more attention you will receive. All Agencies will strenuously deny this and promise that the Client with a third-rate budget will receive first rate service. Do not fall for this. Look at the Client lists of every Agency on the short list and figure out where you will rank. You want to be a client that is at least at the average as regards billings. If you are in the lower quartile, you should seriously consider eliminating this agency from the search. Also, beware of large agencies that operate under different brand names and claim small agency service. It is usually smoke and mirrors. After doing this exercise you will find that your short list is further reduced.

STEP 3: Given them a PROJECT List

Provide each remaining agency with a list of projects that need to be delivered within a calendar year. Work with the consultant to make sure the list is composed of actual deliverables and not vague requests like “bring me lots of ideas”. Do not assume that the Agency has “free” services like “training”.?Based on a well-constructed statement of work, ask the Agencies to provide you with a staffing plan for the account.?There are two levels of involvement in managing an account. The people who work on it every day and the management level people who “supervise” and are involved in setting direction. Also ask them to provide you with an estimated fee for delivering the statement of work. The fee estimates will provide a basis for a side-by-side comparison but hold off on reducing the shortlist until you complete the next step.

STEP 4: Meet the PEOPLE

Ask to meet the people who would work on the account. Have them present the Agency’s credentials with particular emphasis on your areas of interest. Schedule an extra 45 minutes after the presentation for a free-flowing discussion of your areas of interest. Evaluate them. Alternatively, you can interview them. Learn about their experience, technical expertise, strengths, weaknesses, philosophies about brands and creative work. Measure the fit they would have with your organization. Pay particular attention to the Account Director as he or she will be the person that makes everything work on the Account. After this exercise, and considering fee proposals, you will be able to make a call on the presumptive winner. We say presumptive because there are still a few steps in the process, and if things don’t work out as expected, the runner up agency should be considered. Under no circumstance should you award the business without knowing who the key players on the account will be.

STEP # 5. Agree on PERFORMANCE incentives.

As a rule of thumb in every industry, the greater the upside, the greater the focus and effort. This applies to Agencies as well. If the compensation agreement does not incentivize and reward extraordinary results, there is no reason to provide extraordinary effort. Therefore, build in an attractive compensation carrot that focuses the agency on helping the Client achieve stretch goals. If possible, make the upside limitless, for example, as a percentage of sales over an agreed threshold.

STEP # 6: Agree on a work PROCESS

It is crucial to get the Agency and the Marketing department to do a session to establish Rules of Engagement. In this workshop, the team will clearly lay out DO’s and DONT’S. They will agree on a vision for the product, whether it be creative or media, or a combination of both. They will define how the Briefs and Briefing process will work and agree on how Approvals will be managed. They will create a protocol for managing emergencies and a framework for handling conflicts within the team. And they will sign this document that becomes the “constitution” for the relationship. It can be changed, but like the constitution, only if really needed.

STEP # 7: Do PERIODIC reviews

Client and Agency should make a habit of doing “PPP” reviews every three months. The three P’s stand for People, Projects, & Priorities. This will make sure that any required adjustment will be made quickly and smoothly, and that problems will not fester and snowball.

There you have it. A better way to approach Agency Search that will lead to longer and more productive relationships. It is much faster than the traditional pitch approach because it focuses only on what really matters. And finally, it is much cheaper in terms of money and resource distraction for both parties.