The intention is always good, especially during this time of uncertainty. Agencies genuinely want to help their clients and meet any and all demands the job requires. The issues come in when the agency throws every resource they have into getting the job out of the door – Ultimately a very unprofitable exercise.
Agencies taking their lead from their clients endure 'vicarious trauma'. This is the trauma experienced by the client, which is taken on by the service provider. In the name of partnership, we see agencies embedding themselves in their client’s environment, physically, mentally or emotionally.
Stress in the client’s environment seeps into the agency where it impacts its creative engine, production and timelines in its desire to meet the demands of the client. The ultimate impact is on ability to deliver and therefore cost.
An agency needs to manage its business for itself, for its own welfare and not solely for meeting a client’s needs.
Of course they’re dependent on client spend, but an agency is a business on its own and has to be well run and these business skills have really been tested over the past few months.
The easy part was getting the technology in place to enable staff to work remotely. That being done, it’s time to go back to the office and continue to work on agency culture and protocols for business strategy in an altered environment.
Agencies are not large corporates. They are small to medium sized businesses so their own culture and way of doing things is vital, as is revenue generation.
A new way of working may give rise to innovation, where agencies start creating ways to generate their own revenue without being so dependent on clients. We might see more outcome-based pricing happening. And a different name may provoke some innovative thinking. Value based remuneration rather than outcomes based, which is client-centred. Value based is a shared lens. The value that the agency brings into the execution, strategy and conversation generates the value that the client receives.
Outcomes-based is always about the agency meeting the client’s goals, at whatever cost. The challenge for the agency is, “How much are you in control of? How much of your way of working can you consistently apply from one client to the next?”
Agencies need to beware of schizophrenic operation, where, in order to meet each client’s needs, they end up with multiple cultures, ways of working and pricing models.
This leads to highly anxious agency leaders. It’s untenable.
The pandemic has created the opportunities, rather than just issues. The issues were always there, Covid just uncovered them. Covid has been the greatest accelerator of digital use, where the volume of online users is four times what it was before the pandemic.
The bottom line then is that agencies which have taken the time to consider how to move forward under these circumstances, and that are progressive enough to be developing new ways to do business that will be of benefit to themselves and to their clients, will reap the rewards.
The questions agency leaders must ask is, “How do I get through this? How do I future-focus my agency?”
Foundational changes impact how a business runs. If you don’t get that right, it’s the end of the business. Agencies seeking opportunities for the future are the ones that will set the rules by which the rest of the industry will need to play.
Watch the full conversation below:
