Value-Minded Clients Can Be Good for Your Agency

Let Them Sweat Small Stuff and Pay You for Big Ideas

Posted by Tom Martin on 09.30.08 @ 11:56 AM

Tom Martin

It's budget time. And chances are you're sitting in the same meetings I am with a client asking you to do more with less. Over the last 60 days, I've probably sat in half a dozen of these meetings. You might think that would get moderately depressing, but actually it has been inspiring.

In virtually every one of those meetings the client's goal wasn't necessarily to spend less money with our agency, but for the client to receive more value and impact from the dollars it was spending with and through us.

And along the way, two very interesting themes have emerged.

The first is the notion of high-value vs. low-value agency services. Traditionally the AOR relationship included a client using agencies for their high-level strategic, media, public relations, interactive and creative firepower but also for the routine grunt work. This grunt work includes things like resizing print and banner ads or simple (often factual) copy changes. Everyone knows it isn't rocket science and truth be told, the agency adds very little "value" in these transactions, but it was just easier (and sometimes less expensive) to outsource all of this to the client's AOR agency.

But in today's rocky economic world, savvy clients are beginning to re-examine how they work with their agencies. In some cases (retail for instance) clients are seeing that it might actually be cheaper for them to have an entry-level designer on staff to handle the routine. In fact I had this very conversation with a client just a week ago. Yet, rather than be upset that our firm might lose billings, I'm excited. Why? Because he doesn't want to just let the savings drop to his bottom line. He wants to invest some of that savings with us in the utilization of high-level thinking. He wants to open projects designed to solve strategic problems and have our agency's best thinkers assigned to those projects.

In other words, he wants to invest his dollars in the unique agency capabilities that he cannot do himself or afford to bring "in-house" because it would just be too expensive and used too infrequently. Thus, everyone wins. He saves money and gets to hire a resource that can do the routine faster and less expensively than we can and we get to offload the mind-numbing drudgery type work that none of our designers actually like doing anyhow. And the whole thing represents a cost savings for him and is revenue neutral for us because we're redeploying those low value hours to new clients or high value hours for this client.

The second interesting theme is the movement from mass media to micromedia planning. For most of our firm's clients, media spend is the single biggest expenditure in the budget. So it's the first place their bosses look to make cuts. Thus, clients want more efficient media plans that show quantifiable results. Because while their bosses are demanding expense cutting they aren't lowering expectations or goals for the coming year.

Initially, you might find yourself instinctively recoiling at the idea of helping a client decrease their media spend when you think about the loss of income associated with such a drastic move. However, what I'm finding is that here again, clients aren't just dropping all the savings to the bottom line. They're asking us to think about how we can create more efficient and effective marketing outreach programs. We're being given the opportunity to move mass media spend into micromedia channels like online, social marketing and direct outreach or events. Here again, the net net is the client is spending less while getting a more effective plan and the whole thing is revenue neutral for us. Another win-win.

So as you begin to work your way through the upcoming budgeting process with each of your clients, ask yourself what the value versus cost equation of your recommendation/contract looks like and if it isn't the best it can be, fix it -- proactively. You'll do yourself and your client a great service and likely ensure a longer lasting relationship.