As agency leaders we know that we must be effective at profitably growing our agencies if we are to continue to be successful and retain our positions… Clients are motivated to partner with agencies that add value to their business and can help them succeed. While they want the reassurance of an agency that is stable most are not concerned with our profitability. In fact most see us as too expensive and over paid for the perceived value we offer.
The current poor economy has exacerbated the situation and put our client colleagues under even more pressure than usual. Management expectations are even higher for them to cut costs, be more effective with less and produce sales. Yes sales, not just positive brand awareness. Add to this the fact that a poor decision on their part could cost them their bonus, a possible promotion or even worse their job. It should therefore be no surprise that most clients are more conservative than ever and want to operate as far as possible under the radar screen.
A recent AAAA CMO survey highlighted some interesting client perspectives that I feel you should be aware of when planning your current agency growth strategy.
- 93% of CMO’s have identified cost savings with over 37% of those planning to reduce marketing costs by over 21%
- 49% said that within the next 6 months their Ad Budget would be lower
- 68% of the CMO’s who responded had already identified agency cost reductions
- 48% intended to achieve their cost reductions through reduced agency compensation
- 58% intended delaying or eliminating currently planned projects
- 44% planned on altering their channel mix.
I am not sure about you, but my reaction was initially one of doom and gloom. That of course does not help as our growth targets remain the same notwithstanding the economic environment.
Here are my suggestions about how to succeed in the current economy.:
- Add value versus battening down the hatches. You cannot save your way out of this situation. Whether its existing clients or new business opportunities, find where you can add value. Proactivity and agility are imperatives.
- Solve business issues: Bring them ideas and work that will help them solve real business issues. Show that you know their business, you share their concerns, and that you have been listening to them.
- Ground your ideas/work on actionable insights. Analysis alone is useless, you need to go the extra mile and find those key insights that can help support your suggested actions
- Recommendations with proven ROI. Only present ideas and recommendations that have a clear and as proven as possible ROI. Demonstrate that you have researched the idea, and done your homework and that the risk is limited and success is most likely. Demonstrate how you will DRIVE SALES.
- Consider all available channels. 44% are planning on altering their channel mix. Look at what they are doing now and consider alternative channels that may be cheaper and more effective. Social media is hot topic right now however, measurement and associated sales are difficult to track.
- Innovation within boundaries. Yes, they are looking for innovation, however, risk tolerance is low. Make sure that you strike the right balance. For most this is no time for courageous risky ideas.
- Build measurement and metrics into all you do. If you can measure it you can probably sell it.