Why clients outsource to agencies, and 3 ways to win the work you want

Outsource, In-House

In 2018, Susan Baier of Audience Audit Inc. and Drew McLellan of Agency Management Institute decided to take a deeper look at a trend they were seeing: “There’s not an agency, big or small, that hasn’t suffered from clients bringing work in-house,” McLellan said, during a recent Adweek webinar sponsored by OpenText Hightail.

To assess why client-agency collaborations were seeing a shift in the industry, they asked 500 agency clients—of varying roles, revenues and marketing budgets—questions around what triggered them to either give work to an agency or to bring that work in-house.

Why clients outsource

Instead of segmenting their research by demographics, Baier and McLellan decided to group respondents exclusively in terms of the attitudes they have about outsourcing, agency relationships and marketing strengths and capabilities within their organizations. McLellan added, “We’re not suggesting that one of these groups is bad or one of these groups is better. But absolutely some of these groups are going to be bad or better for your agency. Part of what we’re trying to do is help you identify clues so that you can figure out how to prospect and identify which of these groups is one that you want.”

They were eventually able to identify three distinct groups—as well as recommendations to win work with each of them:

– Resident Experts (52% of respondents) – These agency clients have big budgets and big teams and consider themselves smart marketers, but they have no faith in their organization’s own marketing efforts. They rely on partners because their organizations don’t prioritize marketing or do it well. They outsource as often as possible, with 28% wishing they could outsource everything and 80% working with more than one agency. The upside of this group is that they do outsource a lot, but the downside is that they never trust an agency more than their own ideas and worry about getting the attention from their agency that they feel they deserve.

Recommendations – “They do have a vision for where they want their organization to go, and they need partners who are willing to help that come to life,” Baier said. She also added that it’s important to respect their ideas and make it easy for them to give you work.

– Take the Reins (23%) – This group has tight budgets, small teams and no expertise. They don’t have an in-house team or the time or know-how—and they turn to agencies as often as they can afford. They tend to prefer trusted partners, with 40% of them relying on only one agency. The upside of this group is that they value expertise and won’t question yours, and they therefore are more likely to give you all of their work when they can. The downside is the tighter budgets and smaller projects they have, and that they simply can’t afford to do everything you want them to.

Recommendations – Show your smarts without being condescending, demonstrate how you can manage their full program and identify cost-saving opportunities.

– Specialist Seekers (25%) These clients are at organizations that have strategies, trends and tactics well under control, but need specialists to handle items that are outside the norm. They outsource as little as possible, with only 29% outsourcing more than half their marketing work. They also tend to work with familiar agencies, and they are less likely to use freelancers because they worry about confidentiality. The upside of this group is that they outsource “juicy, complex projects” and value your expertise. The downside is that you won’t set strategy and won’t get the “bread-and-butter” work.

Recommendations – Identify targeted services they don’t do well; pitch specific, specialized capabilities and address potential confidentiality concerns.

3 tips to winning more work

In addition to the insights on the three groups, Baier and McLellan also offered some general recommendations based on their research and expertise:

Know who you want. Understand which segment is the best fit for your agency, then align with the right prospects and develop targeted messaging and content specific to them.

Stop going on about your strategic insight. Only 16% of respondents said they wanted strategic insights, so Baier and McLellan said to focus instead on your ability to do difficult work quickly with minimal oversight, as well as potentially promoting “fresh ideas” or “audience understanding.”

Understand their battles. Many potential clients want to outsource to agencies, but 84% say key decision-makers are actively trying to keep work in-house. Think about how you can help them get leadership on board.

Across all three groups, the most important qualities clients were looking for in marketing partners and providers were being able to get work done quickly (45%), handle difficult or complex projects (41%) and work with minimal oversight (41%). All of that, McLellan said, suggests the need for a communication process or tool, such as Hightail, to collaborate with clients and “get a client and agency to come together and streamline communications.” He said it’s also important to manage expectations up front and “walk clients through ‘here’s how we work together, here’s what we expect from you, here’s what you can expect from us—and then have the tools in place to allow that to happen as seamlessly and quickly as possible.’”

He added, “The easier you can make it on the clients, when you’re waiting for approval or a ‘go-ahead,’ whatever tool you’re using, the easier that makes it, the more likely it is that they’re not going to feel friction. And at the end of the day, for all of the segments, it is the friction that gets them to go, ‘You know what, it’s easier to do it myself.’”

For more information on the research, watch the video on demand.


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