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What is the lifespan of your agency relationships- (1)

As a follow up to the first Agency Relationship Continuum article, Wanamaker Associates has provided you with further insight on each phase of the continuum, including the steps involved in each stage and how to your team up for success from the beginning of any agency relationship.

1. Selection

This is always a rewarding time for both advertiser and agency.  A long, stressful ordeal has come to a satisfactory conclusion.  Each party looks forward to a mutually successful and rewarding relationship.  Celebrations are frequent and appropriate as a new marriage is consummated.

What happens in this stage of the relationship?

Contract recommendations
Contract negotiation
Compensation design
Compensation negotiation
Staffing recommendations
Marketing department organization and structure

2. Honeymoon

Once the contract and compensation details have been worked-out, this is a period of learning, immersion by smart agency folks in the advertiser’s business, new strategies and exciting creative ideas.  Everyone is on their best behavior and communications between individuals and the companies are the best they will ever be.

What happens in this stage of the relationship?

Accountability and efficiency evaluation
Bonus/incentive compensation plans
Agency Fee/hour tracking
Agency Resource Management System(ARMS)
Account management & product management training

3. Partnership

Both sides are comfortable now and a sense of true “partnership” pervades the relationship and will continue for an indeterminate period of time.  New programs have been initiated and appear to be working, staff on both sides have gotten to know each other fairly well and a sense of trust has developed.  Communications between advertiser and agency have become the routine, day-to-day type without the need for addressing major issues.

What happens in this stage of the relationship?

Workflow management tools
Performance & accountability evaluations
Media Counsel
Tracking and reporting
Management training (client and agency)

4. Challenging

For any of a variety of reasons, including changes in management or other key personnel Tips for longer, healthier agency relationshipson either side, business results or budget allocations, the advertiser begins to challenge many of the agency’s recommendations, actions and/or motives.

Existing communications channels are often not appropriate and both parties adopt an approach-avoidance mode – the advertiser because they don’t want to upset important, current projects and the agency because “if we’re are not hearing anything, everything must be OK.”

What happens in this stage of the relationship?

Media counsel
Media audits
Efficiency studies
Agency Resource Management Systems (ARMS)
Financial and time-of-staff audits
Performance evaluations

5. Questioning

Agency account service folks begin to be questioned by the advertiser on a variety of subjects.  Many are cost and staffing oriented, but strategic, media and creative recommendations are questioned, as well.

Too often account people can’t or won’t answer these questions fully or in a timely manner. Worse, they do not alert senior agency management that can and will provide the answers.  Advertiser questions pile up and are cataloged internally.

What happens in this stage of the relationship?

ROI modeling
Media counsel & audits
Performance tracking
Buying effectiveness reviews
Compensation evaluation
Financial and time-of-staff audits

This is the last point at which a relationship can be salvaged for long-term growth and success.

6. Doubt

The seeds have been sown.  The advertiser now has concerns about whether the agency has its best interests at the forefront.

Are the agency’s actions and motives all self-serving?  “Are we getting what we are paying for in agency services and advertising results?”  Trust has now become a real issue for the first time.  Disappointment is palpable.

What happens in this stage of the relationship?

Compensation negotiation
Media centralization studies
Agency consolidation study
Performance tracking
Accountability evaluation
Financial audits

7. Criticism

Information is only information until it becomes criticism.  Confrontation, warnings and additional “chances” are the order of the day.  Agency management is scrambling for a fix, but every attempt meets with new problems and renewed criticism.  Bitterness has begun to develop on both sides.

The relationship seems to be in a downward spiral and the pace is quickening.

What happens in this stage of the relationship?

Relationship assessment and enhancement
Performance evaluation
Contract analysis and assessment
Compensation assessment
Workflow management tools
Accountability evaluation

8. Apathy

The advertiser knows that the end is near, although the agency may not have yet realized the fact.  Silence at this stage certainly does not mean “everything is OK.”  Communications are cut at all but the most essential day-to-day levels.  The advertiser just doesn’t care anymore.  The inevitable is written, but they are just not ready to move right now.

What happens in this stage of the relationship?

Resource alternatives
Relationship assessment
Contract evaluation
Accountability evaluation
Financial audits

9. Requite

Somewhere between revenge and avenge, this is the stage where advertisers often extract the last pound of agency flesh.  They argue over invoices, withhold payments, cut fees (go on a project basis) and farm work out to other communications resources.  Sometimes the last “last chance” will be a large, speculative strategic or creative assignment designed to let the agency “win back” the business.  They don’t and they won’t get paid for that last chance.

What happens in this stage of the relationship?

Resource alternatives
Agency selection processes
Financial audits
Media Audits
Contract and termination provisions

10. Review

Here we go again.  How long has it taken?  Three years?  Five years?  It all went by so quickly, for both advertiser and agency.  It was extendable if not preventable.

What happens in this stage of the relationship?

Resource needs analysis
Resource alternatives (unbundling?)
Cost/value analysis
Make or buy analysis
Agency search and selection processes
Contract and compensation counsel, design and negotiation
Marketing department organization and structure

Stay tuned for the next post in this series. Wanamaker Associates’ two-minute agency relationship assessment!


 

Ken - headshot

Ken Bowes

Rod Hanlon

Rod Hanlon

Wanamaker Associates (http://www.wanamaker.net/), was formed in 1986 to work exclusively with advertisers, making their marketing communications investments the most productive they can be. They provide a balanced approach, as each partner has been in client-side advertising management as well as an ad agency principal.

In 1886 John Wanamaker said, “Half of what I spend on advertising is wasted … the problem is, I don’t know which half.” Wanamaker’s work in the areas of advertising costs, systems and client/agency relationships is designed exclusively to find that half.

While their main reputation is in the agency selection arena, they take a total approach to the business and offer a broader perspective with their service offerings:

Agency Consolidation
Media Audits
Performance Analysis
Contract/Compensation Reviews and Bonus Incentive Plan Development Productivity Tools
Analysis of In-house Options and Internal Organization