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.
Marketers will often initiate a pitch or review because one of their agencies is under-performing. It appears all they can do when their roster is under-performing is complain.
The fact is that many marketers will have methodologies for managing individual agencies, but they are now challenged with the task of managing an increasingly growing roster. This is different to agency relationship management, which is about managing the performance of an individual agency.
Agency roster management goes beyond this to developing a collaborative environment, with all agencies on the roster aligned to the strategic requirements and collectively delivering high performance results as cost and time efficiently as possible.
There are typically three common flaws in the way marketers manage their roster of agencies that are counter to collaboration, alignment and performance. Each of these can be implemented to remedy existing roster issues or to establish a high performing roster.
1. Defining roles and responsibilities
Often agencies are added to the roster without a clear definition of their roles and responsibilities. Many marketers feel that these are implicit in the appointment, but without it explicitly communicated and recorded, it leads to territorial battles with agencies competing for influence and revenue.
By clearly defining the functions to be provided by each agency, all agencies have the security to operate within these requirements and not be concerned with other agencies on the roster eroding their position.
While the traditional scope of work is usually specified in the contract, this is often mistaken as being enough. But these are usually too general and largely lost and forgotten once the contract is signed.
2. Aligning remuneration and rewards
Most remuneration practices reward the agency for the amount of work they do and not the value they contribute. This means that for agencies to increase revenue they need to take on additional work, usually at the expense of other agencies on the roster. This competitive environment is counter to collaboration, which requires trust between the parties.
The problem is that the agencies not only want security, but they also need financial growth as a business and performance rewards as motivation. Therefore the remuneration model needs to also provide certainty in revenue, opportunities for growth and recognition on a rewards for results basis.
The solution is to identify the key strategic agencies and to develop a performance based bonus scheme that rewards the agency. Rather than having different KPIs for each agency, all share common KPIs based on value creation to share in the performance they deliver together.
3. Provide regular structured, open, honest and collective feedback
Many marketers will fall for the trap of providing feedback to the agencies on an ad-hoc basis. The problem with this is that it will focus on immediate issues and problems and rarely addresses any long term or underlying issues.
A regular (quarterly or six monthly) structured review with all agencies participating allows all parties to participate in addressing issues and identifying opportunities for greater efficiency and effectiveness.
Most marketers are inclined to make thisa one-way score card approach, where they provide feedback to the agency on their performance. But any Human Resources professional will tell you that this approach is limited. Other marketers have embraced many of the systems available that facilitate a two-way assessment, often mistakenly called a 360-degree process.
But in managing a roster, it is important to collectively participate in the review process with a true 360-degree evaluation. This means assessing each of the agencies and having them evaluate the marketers and then having the agencies evaluating each other.
This provides a common set of criteria that all parties can be assessed against. In a collaborative environment, this creates a level playing field.