Calculating Agency Compensation And Resource From The Scope Of Work

How many agency account managers, strategy planners, creative copywriters, art directors, production managers, producers and coders do you need to deliver your marketing plan?

This is a fundamental question facing most marketers when they are either appointing a new agency or about to engage in the annual negotiations with their existing agencies.

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I have previously talked about the ideal scope of work (SOW)

With a granular or detailed scope of work, TrinityP3 is able to calculate within 5% accuracy the level and mix of resources, across creative, account management, strategy and production, required by the agency to deliver that scope.

What this means for our clients is that by providing us with the scope of work we can:

1. Calculate the FTE levels in each area of services the agency provides.

2. Discuss the mix of the quality of the resource within each discipline based on their strategic requirement.

3. Provide the level and mix of resources to the agency (or in the case of an agency search / tender – agencies) for completion.

4. We can benchmark the agency costs against the level of resources and market rates.

5. We can ask the agency(ies) to also propose their own suggested resource mix and benchmark this for cost and market value.

We developed the Scope of Work Calculator seven years ago because we had a marketer who had reduced their scope of work (SOW) by around 50% in quantity of projects, yet the agency resource plan reduced year on year by only 15%. They were in a dispute that after 6 weeks of discussion was not resolved.

We reviewed and benchmarked the SOW delivered and resources utilised in the previous year and using our calculator were able to enter the proposed SOW for the coming year and demonstrate the change in resources to be 35%, due to the change in the complexity of the mix of projects and not just the number of projects.

This has been demonstrated time and again over the past 7 years with up to 60 projects per year across all marketing categories and all agency types including direct, digital, search, media and the like.

We have also applied the SOW Calculator across up to 18 countries across APAC and found that the resource metrics are proven while obviously the cost of resources varies from market to market.

Each application provides increased insight and refinement to the process to the point we have a very high level of accuracy across almost all variables.

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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
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