This post is by Darren Woolley, Founder of TrinityP3. With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.
I was prompted to write this following answering a question on the phone app Quora. Quora is a question-and-answer website where questions are created, answered, edited and organised by its community of users.
The question asked was, “Is it normal for my agency to charge by the hour for attending meetings? If there are two people attending a meeting for one hour at $100 per hour each, should they charge me $200?”
Quite a few people answered that as time is money of course the agency would charge for their time, after all the agency is recovering their cost with these fees. If the agency were pitching for business this would not be charged, but that is a different discussion. I was more intrigued that their agency had clearly, from the example given, not deployed the Client+2 strategy.
What is the Client+2 strategy?
This is an artefact of the industry service mentality, where resources equals services. In practical terms it equates to the fact that at every client meeting the agency will send along one person for each client attending, plus at least two more. Therefore if there are two clients the agency will send four people. If there are six clients the agency will send eight people and so on.
You could argue it is strength in numbers, but it appears to be more about the demonstration of resources to deliver the service expectation and the depth of resources available to the client.
Where is this most noticeable?
We first noticed this in the pitch meetings. When we provided the agency with the list of clients attending the meeting, the agency would then respond with the list of agency staff attending which is always at least client+2. It is sometimes comical at the chemistry meetings, especially when held in a smaller room at the client’s offices. In comes a huge contingency from the agency and there are not enough chairs or space for everyone. I know many clients ask to meet the team that will be working on the business, but sometimes this becomes ludicrous.
It also becomes noticeable when we are benchmarking an incumbent agency remuneration model. We will often find the level of account management that is more than double the benchmark expectation against the delivered scope of work. In conversations with the client and agency on this, it became obvious that the weekly WIP meeting was often indicative of the Client+2 strategy at work. The client would complain about the fact that every week the WIP would not only take 2 or 3 hours across all of the brands, but the agency would have more people in the meeting than there were clients.
Who are these people?
This is an incredibly telling observation. When the agency loads the meeting using the Client+2 strategy, the type of people added is instructional as to the purpose or objective of the meeting.
If beyond the core account management team, the agency group has senior management in the meeting, say the CEO or the CFO or both, then clearly there is a major issue or crisis that needs to be addressed. It is interesting that most marketers naturally detect that the arrival of the senior management of their agency means there is some crisis, even though at the time of the pitch they were promised these people would be intimately involved in the oversight of day-to-day operations.
If on the other hand the additional resources are, (like the unnamed, mute henchmen from an Austin Powers Movie), simply making up the meeting numbers, then it is likely the agency is trying to either justify their current fee or preparing to ask for an increased fee based on the number of hours being over the allocated level.
How to counter the Client+2 strategy
One of our clients simply walked into the meeting room and counted the number of agency people there before asking each of them to tell him their role in the meeting.
Okay, a little confrontational, but the solution is not that far from this. It is simply a matter of discussing with the agency your expectations. If you want a one-on-one meeting, tell the agency, otherwise you will get three turning up, or more. If Work In Progress becomes a Who’s Who of agency personnel, let them know who you expect to be there and who not.
The agency is not a pack of hyenas roaming the client hallways looking for a fresh kill. It is more driven by their desire to demonstrate and deliver a level of services. In a service industry, where people are the delivery of that service the best way of doing that is bringing more people to the meeting.
But if they are not adding value in the meeting, then the best way is to arrange for them not to be there. Not hard really, is it?