A lot of agencies might respond to the title of this article by insisting that they are, in fact, very strategic. They may be, when you look backward upon the last 20+ years of marketing when the threats were somewhat quaint, like in-housing or off-shore agencies. But seismic shifts have altered the marketing landscape, requiring a new strategic perspective within the client marketing organization and the overall brand enterprise, and also unleashing new, formidable competitors that have a much more advanced ability to engage strategically with the client than agencies do.
During my recent Adweek webinar, sponsored by Hightail, I did a deep dive into “Agency Survival Tactics for the New Decade: How to Stay Competitive in the Evolving Marketing Landscape.” If you watch the recording, you’ll learn more about these shifts as well as the key new competitor to agencies, management consultancies, and how they can offer your clients more of a strategic partnership approach, while also avoiding “the commodity trap” that your agency and all others face today. The presentation ends with several suggestions (five) of tactics that can be used to drive a whole new style of engagement with clients.
The Q&A that followed confirmed that many agencies are looking for actionable ways to innovate their business model and client relationships. Here’s a subset of the topics that came up and some longer answers than I was able to provide during the session:
Many consultancies are starting creative arms. How do you see this impacting creative agencies?
It actually impacts all agencies because it blurs the distinction between management consultancies (MCs) and agencies. Most agencies possess a different organizational DNA than consultancies, and the two types of DNA don’t combine well. The larger concern here is that the management consulting model is a far deeper type of partnering than agencies typically do: their ability to create broad and deep connections, often having multiple people working together – co-creating business results – from both organizations shifts the client’s perception of partnership in profound ways. And then they wear the “I’m an agency, too!” hat and that becomes very hard to compete with. The point of the webinar and the advice in it is that agencies can engage like the consultancies – they just need to adopt that mindset.
How do you start spreading this consultancy mindset of a more strategic approach within an agency team?
Part of an agency’s DNA is the ability to relentlessly ask “why” – this is a core skill in divergent thinking, one of the big differences that agencies should tout. Get to know the “why” behind what your clients are buying from you and find out what challenges they are having. Find the questions that they are not asking but should be—and do that with your teams, not just a few of your account people or leads. You’ll then deepen your team’s ability to understand the client, as well as expose them to some new questions or at least new people that want to know more.
Won’t changing the relationship also require retraining clients?
They are the same thing! You can’t be a different partner unless you change, but that also means that you’ll need the client to change as well. That means that it is critical that the changes that you drive are aimed at the client’s new needs – the strategic capabilities they will need to move into a more competitive future. The change for the agency is from selling commodity-style to selling strategically, using a set of principles that I referred to in the webinar as relational strategic selling. Some of the key techniques include:
- Selling on ROI/value versus features
- Broadening team relationships with the client, creating multiple connection points
- Making “forward investments” in the areas that the client values
- Creating deeper integration in the way you develop and deliver work and projects
You mentioned the need to create a brand out of your people as one way to help form more strategic relationships with clients. Can you explain how to do that?
Basically, agencies have amazing people … all of them. The act of branding is that of identifying differentiations between the company/product and its competitors in a way that ascribes value—and you can do that with your people. For example, Sean may have done some killer work for millennial-targeted beer marketing. His experience has value for some clients – but they will never know unless you tell them. Market them like the fine wines that they are!
How should you evaluate the qualitative strategic value an agency can provide a prospective client with (versus an existing client)?
I want to be clear about one point – when you shift, you will lose some clients. Not everyone will want to go there…but we believe that many will, and this really comes down to how long you cling to the last tree on a shrinking island before you decide to swim to the new one rising from the sea. That said, the best new client is virtually ALWAYS your existing client. They know you, trust you and already value your capabilities. You also have a much less costly learning curve with them.
Can you talk a bit about a transformational shift from a studio model to an “onsite, be-at-the-table” model?
It is much easier to do than it sounds. A simple format is a string of all-day workshops: You work on things together and occasionally apart, but in the end, you are creating the results together. It’s absolutely a shift internally but we’ve found the team and the client love it because it allows for the subject matter experts doing the work to have closer communication to the clients, and the increase in transparency creates better work, faster delivery and happier employees and stakeholders. We’ve seen a lot of shops try it out in a test-and-learn model, without changing their whole shop.
Wouldn’t it be more effective to grow a separate consultancy business, with all new staffing and comp structure in parallel with the existing agency, but not an agency division?
My opinion is that it is probably better to build it from within and connected to the agency, so that the consulting mindset pervades other discussions. Agencies have a strong culture and tend to think differently, where consultancies tend to do the same thing over and over. Stick with that unique agency DNA and make strategic thinking a natural extension to the organization, starting with the strategy and analytics departments. Consider investing in data scientists so that you can bring that enterprise marketing thinking to your team as well.
You advise agencies to be teachers. Wouldn’t this cannibalize the expertise that our agency brings to the table?
Teaching is a really good business, and teachers learn far more than students do. The consultancies know this and build their business model around that idea that creating smarter clients means creating better clients. Keep this in mind as well: Your clients are hierarchical organizations, they usually aren’t good at innovation, which is why they hire agencies. They’ll never become you. Your client will not turn into a creative agency; they have many other things to worry about within their organization. And if you don’t help them, who will? Oh yeah, those consultancies – satisfy, rather than resist, your client’s needs and it will strengthen the relationship.
Agencies needs to shift to enable a different way of thinking. It’s very hard to be strategic and forward thinking when you’re apologizing for being late or missing the ask. Back-footed account people never have time for the more strategic discussions. (You can learn more about this “contagion problem” in my other Hightail-sponsored webinar, The Agency-Client Blame Game is Killing Your Productivity: How You Can Work Better Together.) It takes a shift … just working to show up more and find new ways to create value inside your client’s organization. Talk about the future, rather than the present or what’s due tomorrow. Take the time to just ask: “What other service, what other capability, what can we do to be more strategic for you?”
Jack Skeels is CEO of AgencyAgile, an agile transformation and coaching firm that helps agencies, marketers and other complex service organizations empower their teams to greater results and satisfaction. He formerly was a senior analyst at RAND, where he developed an approach to flat organizations and workplace inclusion that in the words of one publication is “successfully transforming adland.”