Company Category: Global FMCG
Challenging Problem: TP3 were asked to review the remuneration arrangements with its two creative Agencies. These relationships had been in place for many years however there was a sense that the rates may have been above market.
Creative Solution: TP3 benchmarked the rates and also the level of resources supplied by both agencies. Against benchmarks it appeared both the mix of resources provided and the level were excessive. In addition the head hour rates were well above market.
TP3 recommended a restructuring of the remuneration model to be an “all inclusive retainer” which allowed the client to buy the same level of resource currently on rate card at a cheaper price. TP3 also assisted in the rationalization of the agency roster as there was no apparent benefit having the work spread across two agencies.
Process: TP3 benchmarked to client “Scope of Work” for the following year and asked each agency to submit a remuneration proposal based on the Scope and new remuneration model. TP3 then assessed the responses providing advice to the client’s procurement team on the appropriate negotiation strategies.
Timeline: This project had 3 phases which were completed within 8 weeks
Result and feedback: The client achieved significant monetary and efficiency savings over the current model and has been used as a model for the company in other regions where we have assisted in delivering the same outcome in Hong Kong, Malaysia and most recently Japan.