Rose coloured specs are OK
Bump into a long lost friend on the street and the first answer you will give to the question ‘how are you?’ is ‘Fine!’ (whether its true or not).
Is it any wonder that agency owners will over-rate the optimism of their staff in the current climate rather than be honest about the prospects for survival (let alone growth).
No business owner is comfortable admitting that their outlook is gloomy, but the first rate research published today in the 2011 Design Industry Voices report clearly shows that agencies and their staff cannot afford to ignore the competitive strains of the industry any longer.
From the dangerous effects that free pitching is having on the design industry to the mis-match in expected performance of agency teams (leading to a talent exodus) it looks like 2012 could be remembered for all the wrong reasons.
Report author Rachel Fairley, (MD of Fairley & Associates) calls for a return to the traditional account middle management model. She envisions a time when the true entrepreneurial spirit that encouraged agencies to become successful is re-established, supported by a talent pool of well trained and resourceful account managers that take ownership of their client portfolios in a number of practical ways:-
- ‘Give managers responsibility for the resourcing budget on their project so that they can staff up appropriately and allocate manageable workloads.
- Stop promising to clients more than your people can deliver during a normal working day for the budget.
- Take a percentage of the project profitability and allocate it to managers to use as a team bonus for outstanding work and for seeing the project through, helping increase quality and reduce churn.’
Co-Author (of the report) Stef Brown is MD of On Pointe Marketing. She also picks out three key wishes for the future welfare of the industry:-
- Stop free pitching – and ask to be paid
- Focus on existing clients
- Payments by results – the way forward
Steff writes:- ‘With a bit of thought, effort and willingness to take a long-term view, PBR can promote increased trust and accountability between agencies and their clients, it puts the relationship on a sounder commercial basis and should position the agency as true business partner rather than just a supplier.’
Few owners would disagree with Stef’s and Rachel’s wish lists, and some would already be working out how to enable these processes within their existing structures.
But, while it may sound simple to command your teams to ‘stop letting clients get away with it’ actually preventing this happening is a much taller order. If those habits are ingrained in the relationship then reversing them successfully is as doubtful as a two-week New Year detox.
Rachel is right:- Lets hear it for ‘a slimmed down executive team and an empowered middle management’. But if you want to enable that kind of change and make it sustainable then you have to support a smarter way of working with the proper systems and processes that can actually deliver manageable budgets, proper resource planning, reduced over-servicing and genuine client ownership.
PBR is a big change in the agency/client relationship, and it should be welcomed as it allows both sides to have a proper vested interest in the outcomes of creative campaigns. But to make it work both sides have to agree to a series of measurable metrics that can be delivered and adhered to.
You can bring down your staff churn rate by making your staff better equipped to manage the client/agency relationship (-which does not mean incidentally that you have to work for nothing at break neck speed).
While there is always a risk posed by a disgruntled client many of them do not want to have to recruit a complete new design team and the rigmarole of the agency beauty parade. If you have no choice but to write off the pitch costs there are ways to recover the contribution to your costs expended in the new business effort.
Clients are facing exactly the same financial challenges as you are; it’s just that they think they have the whip hand when it comes to commissioning the work. They want to enjoy a fruitful business relationship just as much as you do.
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