When an agency or brand work together, it’s like any relationship; we all know trust, respect and communication is key but it’s not that easy. It’s tricky to keep things fresh and the spark alive over a long period of time. Let’s face it, there’s always a danger of both parties becoming too complacent and things becoming stale.
To put it bluntly, like the old lion in the jungle, there are always hungry predators waiting to pounce. It’s the Law of the Jungle and you have to stay active to survive.
Client Reliance on Agencies
But whilst it’s great to have an agency (or brand) embedded in your business, over reliance can raise problems too. You see it a lot from the client-side of marketing, when a brand or marketer leans on one agency. And likewise, vice-versa for agencies dependant on one or two main clients. When the scales are tipped too much for too long, it’s easy to become blinkered and lose perspective on when the relationship is working and when it’s not. So, how can we stay mindful and when is it time to restore balance or seek out alternatives?
From a client perspective, most of the time, there’s only a single person (or two) in an agency who the brand is reliant on. That key staff member may have worked with the company so long, it allows the agency far more comprehensive insight than any of the client’s own employees. And that’s not the most business savvy, sustainable position to be in.
Why? First, common sense tells you it’s bad for someone else to know the business better than you do. Second, what if they leave or get promoted? What if the agency goes under? What if they pick up a more lucrative account?
That’s when not having a risk management strategy, which allows you to move from one agency to another, can be detrimental to a company. Especially if you don’t have a Digital Asset Management (DAM) in place.
Second, what leverage do you have if the relationship turns sour? How do you negotiate better rates, staffing levels or costs if you don’t have the background to continue without them? You can’t.
One could argue that clients benefit more so, from the long-term relationship between the two. It’s true, there are efficiencies to be gained from a long term relationship that works. It’s easier to optimize, be productive or become cost-efficient in this way. You’re getting protection from this lion, so why change?
Whilst this may be true, as we know, it can also be the quickest path to complacency. When margins are high and procurement or any type of supplier relationship management partner (SRM) isn’t involved, you can be assured that you’ve become a staple in the agencies’ revenue stream. Even when there is SRM and procurement is involved, clients are limited in what they can do.
A client should never be so reliant on an agency that they aren’t able to see or find alternatives. But again, neither should an agency. That’s not to say all long term agency-client relationships will go bad. Quite the contrary. As long as you put in the effort and hard work, you’ll reap the rewards.
Agency Reliance on Clients
Although the best relationships are partnerships, agencies are still looking to make a profit. They’re still a business after all. So can they truly form partnerships, to begin with? Yes, but only to a point. That’s why it’s so necessary to keep agencies on their toes.
And while it may be cost-prohibitive in the short-term for brands to stay with those agencies, the long term of a greater ROI far outweighs these costs. But sometimes it’s hard to see the bigger picture when they are continually being pushed to drive revenue.
And if agencies are similarly reliant on single accounts, it fosters a similar environment. It’s not a healthy situation for any type of business to be in.
They may make decisions that may not be in their best benefit, but keep the partnership alive. It becomes a lose-lose situation.
The good news is, as the way with the circle of life, eventually, a new lion will take over the heard. Whether the pride got too big, the leading lion got too lazy, there will always be a reason for the change.
They will be faster, more adept to change and more willing to work with necessary parties to get the job done. So, despite lacking historical context, they will be able to outperform the incumbent. And do it quickly if they have the strategic know-how.
Best Practices for the Client-Agency Relationship
- Set and agree on relationship expectations early
- Provide clear communication and constructive feedback
- Create trackable goals that improve ROI
- Share risk/reward (large enough to incentivize the agency)
- Set realistic timelines
For additional insight, check out our Whitepapers.
“New clients are what keeps a business growing and evolving. They are the lifeblood of a company, bringing in new ideas and opportunities as well as funding.”Forbes – 14 Ways Agencies Can Establish Strong Relationships With New Clients