CASE STUDY: Agency Remuneration Negotiation

Client Category: – Beverage Company

Challenging Problem: The client had a process of annual negotiations where the agencies would respond to a scope of work with a proposal of resources and costs. But a recent rationalisation of the roster had seen and increase in agency proposed fees rather than the fall due to the desired economy of scale. The negotiations had reach a virtual stalemate with an insurmountable disagreement with the agencies on the level of remuneration.

Creative Solution: Taking the marketers scope of work, we applied our resources benchmarks to calculate the agency resources required and the associated costs. This created an independent reference point to compare the agency proposals as we went into the negotiations.

Process: The scope of work for each brand and each agency was provided and benchmarked for resource level, mix and cost. This was compared to the agency proposals and the result discussed and the preferred end position of the negotiation agreed with the marketing team before negotiation recommenced.

Timeline: The benchmarking across all of the brands and the various agencies took 4 weeks before the negotiation process continued.

Result and feedback: The final negotiation delivered savings on the agencies original proposals that in excess of a 40 times ROI on the TrinityP3 cost. This was achieve by moving the focus from the fee alone to the resource level and mix required to deliver the scope of work.

Cost: Contact TrinityP3 for details

Related Posts Plugin for WordPress, Blogger...

About Darren Woolley

Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com
This entry was posted in agency remuneration / compensation, case studies and tagged , , , , . Bookmark the permalink.