Why Scope of Work (SoW) is not Scope of Services (SoS) and why that matters

Scope of Work

We talk and have written many times about the importance of scope of work in regards to setting or benchmarking agency remuneration based on productivity and not simply the cost of resources. But there is often confusion in regards to what is meant by a Scope of Work. The most common confusion is that the Scope of Work is the same as the Scope of Services or Schedule of Services found in most agency contracts. But there are some very fundamental differences between a Scope of Service and a Scope of Work for the agency.

Why it is so important to have an agency scope of work

This is the final in our series of articles on agency scope of work management. Managing the scope of work for your agency is possibly the easiest and fastest way to increase the buying power of your marketing budget by removing the duplication and uncertainty as much as possible from the agency work. In this way you are able to get more for your agency budget without simply driving down the rates and prices.

The impact of economies of scale on scope of work cost

This is the second in a series of articles on agency scope of work management. Managing the scope of work for your agency is possibly the easiest and fastest way to increase the buying power of your marketing budget by removing the duplication and uncertainty as much as possible from the agency work. In this way you are able to get more for your agency budget without simply driving down the rates and prices. There has been a dramatic increase in the outputs agencies are producing for their clients these days, especially due to content marketing, social media and digital advertising. The multiplier effect on the scope of work can inflate the agency fee without the allowance for economies of scale. But economies of scale must be applied carefully to avoid undermining the process.

How to define an agency scope of work to deliver increased value

This is the first in a series of articles on agency scope of work management. Managing the scope of work for your agency is possibly the easiest and fastest way to increase the buying power of your marketing budget by removing the duplication and uncertainty as much as possible from the agency work. In this way you are able to get more for your agency budget without simply driving down the rates and prices. But why is specificity so important? Anyone that is involved in manufacturing, construction or technology knows, by clearly defining and specifying the actual requirements upfront you are better able to plan and execute the construction/manufacturing process more efficiently and effectively.

Beware the dangers of the cookie cutter approach to benchmarking agency remuneration

One of the topics that regularly occupies conversations with marketing services and procurement teams is benchmarking their existing agency arrangements. This of course is something that we have been doing for more than a decade across multiple regions and markets.But also across multiple disciplines including media, digital, public relations, social media, shopper marketing, event marketing, sponsorship management and even call centres.

Why adjusting an agency scope of work requires careful consideration

An advertiser recently called with an issue that had lead to a dispute with their agency. The advertiser had a 30% cut in their marketing budget due to falls in sales and they had tried to negotiate a significant cut in the agency retainer to reflect the cut in the budget and hopefully a corresponding cut in the scope of work (but more on that later). The agency had refused any cut in their retainer on the basis that they had recruited a number of resources specifically for the account and they maintained it would be unfair to cut the retainer as this would require the agency to terminate some of these resources as they could not be redeployed within the agency.