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How to... get more from agenciesFeel as though your agency is on another planet? Or perhaps the client is

always on the warpath? Heres how to avoid an expensive parting of ways

Clients are from Mars and agencies from Venus: that is how recent research

from matchmaker AAR characterises the often turbulent relationship that

develops when marketers outsource to consultancies.

It certainly isnt the first time someone has compared the client-agency

relationship to that of star-crossed lovers, prone to misunderstandings and

cultural differences. As AAR chief executive Kerry Glazer points out, the

relationship is one that all too often ends, prematurely, in tears.

Clients, she says, are inclined to dump agencies after two or three years,

knowing others will line up at its door once the account comes up for review. And

this is despite the fact the relationship is usually far from broken.

I dont think we would review nearly as often as we do if the market wasnt so

over-supplied with very good agencies, Glazer says.

What the Mars-Venus gap in perception means is that while clients generally

attribute the breakdown of a relationship to agency output failure, agencies

generally put it down to a difficult or demanding client.

Should this matter to clients? Yes, says Glazer. Agencies are not the only ones

losing out as a result of these premature break-ups. In a break-up scenario,

clients lose the expertise the agency has accrued in the time spent working on

the account, and face the time and expense of holding a review.

Nuts and bolts

The first step a client should take in building better relationships is to look at itsown processes, as well as those of the client, Glazer argues. To expand on the

point, Martin Nieri, chief executive of direct marketing agency Clark McKay and

Walpole (CMW), points to Magic and Logic, a report by the Institute of

Practitioners in Advertising (IPA) and other bodies, which looks at procurement

and at relationships between clients and agents.

It suggests that agencies think that about 80 per cent of a relationship is about

magic: the creative side, says Nieri. Whereas the client will think 80 per cent is

about logic: the nuts and bolts. I think there needs to be more of a balanced

perception of whats required.

For Nieri, getting the logical side right means paying attention to detail at thebeginning of the relationship. In our experience, relationships dont break down

over strategic differences or big creative issues. They break down over details,

he says. For example, a client may complain that theyre getting status reports

in late. If those things are laid out in a service agreement, each side knows what

is expected of them and this is much less likely to happen.

Glazer adds: There is always a lot of talk about how agencies are going to get

paid, but not much about factors such as who will do the briefing, who holds

decision making power, who signs off the brief, and how progress will be

reported. However, given that 90 per cent of work presented at a pitch never

sees the light of day, it makes sense to go with an agency when the personal

chemistry feels right, concedes Glazer.

A personal touch

Finding the right chemistry means clients need to ensure that the people

presenting the pitch are the same ones who will work on the account not just

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managing directors and directors lending their gloss to the pitch.

Another frequent bugbear for clients is when treasured staff working on an

account leave the agency or are promoted. It can be time consuming and

stressful to bring a replacement up to scratch.

You have to recognise that there will be changes to an account team. You need

to agree on how you will deal with those, says Glazer. That could mean holding

three-month reviews of new personnel, or specifying what kind of an induction

process a new member of the account team will undergo.

Robert Prevezer, executive chairman of The Communications Agency, believes

the surest way for a client to find the right people is to choose the right sized

agency.

One should look for an agency whose principal staff will be actively involved in

your business, because those principals are not leaving and should be able to

contribute hugely, based on age and experience, he says. Clients sometimes

opt for the perceived security of a huge agency without understanding that they

are unlikely to get the principals of the agency involved in the account.

Prevezer also believes that clients should take a longer-term view and quizagencies on their strategic vision for the future of the brand. He cites his

companys 16-year relationship with Disney as proof that clients do not need to

repeatedly switch agency in search of freshness of approach.

Dont get TUPED

In many cases, freshness in the form of new faces and a clean slate is

precisely what the client is looking for. However, recently introduced employment

laws mean that clients hoping to see new faces when they switch providers may

be in for a nasty shock.

Under the 2006 TUPE (transfer of undertakings) regulations (see The Marketer,

February, Legal eagle, p17), a company changing agency may be obliged to

employ the staff of their previous contractor, says Anna Montes, associate at

law firm Osborne Clarke.

Already clients are f inding themselves saddled with unwanted employees

because of TUPE. While it is not possible to opt out, there are cases where the

regulations do not apply, such as where the contracted activities will be carried

out in connection with a single short-term event or task: organising a conference,

for example.

For TUPE to apply, there must be an organised grouping of employees (though

this can mean one person) whose principal purpose is working on behalf of the

client.In order to minimise TUPEs impact, Montes recommends that any agreement

should specify whether the client or agency will bear any costs incurred as a

result of these regulations.

Montes suggests that contract terms in general should always be negotiated up

front rather than once the work is underway. Issues that often need clarification

include copyright. Clients may be accustomed to owning the copyright, but when

they commission work from an agency, the agency will own copyright by default

unless otherwise specified in the contract. Fortunately most agencies are

prepared to forfeit copyright in agreements.

An open book

Of equal, if not greater importance, is the question of audit rights. Alison

Sanderson, partner at client audit specialist Firm Decisions ASJP, says that

many clients do not understand the workings of an advertising agency and can

"Ensure thepeoplepresenting the

pitch are thesame ones whowill work on theaccount"


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Case study: Building a relationship

A sound understanding of the business proposition is what counts for SMEs

when it comes to hiring agencies

Henry Mayes, marketer at 30-strong building services outfit Maleon, has found

that mid-sized agencies often provide a better service on a smaller account.

Mayes has been the first to use agencies at Maleon since his appointment as

business development manager two and a half years ago, contracting agencies

to handle the companys collateral needs, web design and direct marketing.

lose track of their real advertising spend.

Typically, an agency provides a budget estimate for third-party services but

then saves money by obtaining the services more cheaply. Often the agency is

providing the higher estimate in good faith, to ensure that the clients budget can

meet the cost.

What frequently happens next, however, is that the client fails to reclaim the

difference between what was estimated and what was spent. In 99 out of 100

audits, we find that clients have left money behind, says Sanderson. Morefar-sighted clients might have an agreement in place allowing them to withhold a

percentage of the agency fee until a reconciliation process has taken place to

identify any such shortfall. But even then clients often do not take advantage of

such contractual terms, says Sanderson.

Another nefarious practice that auditing can help to uncover is the short-changing

of clients via what is known as a rebate or volume override. This is where a

media buyer approaches a TV network or magazine publisher and offers to buy

in bulk. In return the buyer receives either a cash rebate, goods or services but

fails to pass on the savings to the client.

What makes the practice so controversial is that it provides the potential for aconflict of interest, by tempting the buyer to place adverts with an eye on

receiving a rebate rather than with outlets that would best suit the client.

The word on the street

While such practices are a concern for all clients, many smaller businesses dont

have the resources to appoint matchmakers or auditors and simply want to find

the right agency in the first place.

Often word of mouth is the best option. Such was the case for Go-Electrical, a

medium-sized electrical retailer specialising in premium brands in the Yorkshire

Dales.

When the arrival of the internet led the companys sales to plummet overnight,

Go-Electrical made the decision to move into e-commerce.

The daunting task of finding a combined web design and marketing agency that

would understand the business was made much simpler when an IT provider

recommended Leeds-based Kilo 75, says Go-Electrical managing director John

Garnett.

Garnett was impressed by the agencys long-term approach and its

understanding of factors such as the need to strategically tailor marketing to

seasonal events such as Valentines Day.

Since appointing Kilo 75, Garnetts turnover has increased fivefold, bringing the

company back to pre-internet margins. The two companies have formed sostrong a bond that, Garnett says, Kilo 75 co-director Monica Tailor is now like

another member of his team. Our strengths are in our products, so having a

good marketing partner is absolutely vital for me, he says.

Dos and donts

Do ensure that the team

you meet during the pitch

process consists of the

same people that will beworking on your account.

Do ensure you get a

guide to fees and budget

estimates early on in the

pitch process.

Discussing these matters

later puts the client at a

disadvantage in

negotiations. It may also

emerge that the most

sought-after agency is

too expensive.

Do draft legal

agreements before work

starts, covering issues

such as copyright, audit

rights and whether TUPE

agreements apply

Do select an agency with

specialist expertise.

Check that its expertise

is up to date and stillpresent within the

company. An agency

may, for example, have

gained its reputation

because of the skills of a

particular member of

staff who has now left.

Don't hold pitches with a

shortlist of more than

four agencies. Pitching is

expensive and timeconsuming for agencies

and they are less likely

to make an effort to

respond to the brief if

they think there is little


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After the account for collateral was awarded to a company that had come to

Maleons attention by word of mouth, it was the search for a web design

agency that proved most instructive. Around a dozen agencies were initially

considered and Mayes narrowed it down to a pitch of four. The results, says

Mayes, who stresses the importance of quizzing agencies to check they have

understood the client business proposition, varied hugely.

Surprisingly the big London agencys pitch was one of the worst. They werent

really interested in what we were doing and didnt listen to the brief, he says.

Maleon is largely concerned with building design and the provision of services

such as water and heating to buildings. So Mayes staff need to liaise witharchitects, planners and developers, and the companys marketing needs are

very different to those of an FMCG business.

Any agency has to make a bit more of an effort to understand what we do

and what our USP is, says Mayes. It became apparent that Maleon would get

better service from a mid-tier agency that valued the business the contract

would bring. Were a smallish project for a large agency, but for a smaller or

mid-tier agency we have some hitting power and we tend to get a much better

service, says Mayes, who hired mid-tier agencies Lighthouse and Radical Cat

for web design and telemarketing respectively.

Andy Allen is a freelance writer for titles including People Managementand

Supply Management

chance of winning.

Don't hold a pitch for its

own sake if you already

have a clear favourite.

Don't choose a large

agency just because of

its name. A smaller

agency that values yourbusiness will often give

you more attention.


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