At last month's Business Growth Conference Mirren Business Development's Brent Hodgins outlined the key trends impacting how client's chose agencies. Here, ahead of delivering a workshop on future-proofing your agency in September, he asks if you are focused on the client’s business – or are you just like every other agency?
We’ve worked with hundreds of agencies around the world on their new business strategy – global holding company networks, smaller creative boutiques, digital innovators, PR firms, and more. We’ve worked with the best in the business and those who want to adopt the practices of the most accomplished in the business.
We have seen it all. Here’s the single biggest mistake we see agencies make with their pitch presentations: not effectively correlating the agency’s strategy and activation to business outcomes that really matter to the client.
Most agencies think they do this quite well.
After all, “Our agency is about innovation, digital transformation, creativity, and storytelling. We uniquely create digital experiences and solutions that impact culture and commerce. We’re relentlessly focused on results with a five-step proprietary circle-chart process that starts with understanding your business, then proceeds through research and strategic development. Most importantly, after developing the work, the process concludes with measurement. This then feeds back into the system, allowing us to optimize your work. Oh, and there’s our entrepreneurial spirit, complete with a dog friendly office.”
This stops now. You are in new business to win. And this means, elevating your entire thinking.
Client marketing chiefs are being held accountable for tangible business impact like never before. As marketing now has the potential to be more effective, the pressure to do so has increased. They grow the business or they’re out. And it’s black and white for your agency: you play a role in this pursuit or you don’t. In fact, from a client perspective, why award business to agencies who don’t focus on business outcomes, rather than the growing number who do?
You might be thinking, “Yes Mirren, we know this already.” Then act like it.
In fact, most agencies are focused on the metrics of old. They speak to lower level measures such as awareness, impressions, reach, website traffic, brand preference, engagement, click through rates, and social engagement. The problem is that every one of these can be improved – but without increasing revenue by one single dollar. Some will even speak aggressively about sales, but in a generic fashion, one that is not specific to the category.
Although unintentional, most client assignments mislead agencies. The challenge is that over-burdened marketing chiefs are allowing pitch orchestration to be led by their more mid-level and procurement team members, or process-focused search consultants. Unfortunately, neither of these groups have the insight nor the seasoned strategic horsepower to accurately represent the business needs of the organization’s C-suite. As a result, you have RFP’s with an inaccurate focus. This is often in stark contrast with the needs of senior clients who are selecting agencies based on their ability to impact higher-level business measures.
Senior clients measure impact in a manner that is much different from their marketing managers, procurement and agencies. They focus on Key Performance Indicators, the metrics by which the C-suite measures the health and performance of their business and marketing. Clients live and die by their own unique set of KPIs. They are personally evaluated against them, and more importantly, they are compensated against them.
Here is where many agencies miss the mark: KPIs are unique from one category to the next. They are completely different as you move from retail banking to QSR to hotels. The clichés and soft outcomes of most agencies are too generic to measure and improve specific business performance. Broad metrics are in fact dead. As senior clients are being held more accountable to directly improve revenue, their KPIs have become very specific. Category-specific.
Which agency would be more compelling to a retail banking client: one focused on driving Customers per Branch, New Accounts Opened and Products per Customer – or one focused only on creativity, digital transformation, storytelling, building impressions, awareness and website traffic? In the hotel industry, would it be an agency focused on driving inbound inquires, duration of occupancy and spend per occupancy – or one focused only on social media impressions, engagement and click-throughs? The answer is obvious. And with a growing number of agencies who also address category-specific business impact, why select those who are not? If you were in the client’s shoes, would you?
In fact, clients have begun to ask this critical question of agencies. Are you in the business of communications impact or business impact? Are you a tactical marketing vendor or in the business of generating meaningful revenue growth? If you’re not focused on driving business growth… well, then there’s lots of better options to choose from. When you combine the power of management consulting firms and in-house agencies, you need to decide whether to step up or step out.
Brent Hodgins is the Managing Director of Mirren Business Development and will be delivering a workshop on Future-Proofing Your Agency on 17 September.