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Improving the Marketer-Agency Model
Companies are just as much to blame for bad marketing relationships
For the rest of the June 2017 issue of CRM magazine please click here

The current marketer-agency operating model is broken, and both parties are to blame, according to a report from Forrester Research. While outside agencies often fail to deliver customer-focused strategies for their clients, marketers’ organizational and budgeting constraints inhibit agencies, leaving both parties—as well as end customers—unsatisfied.

“This is a two-way relationship, and it takes two to tango,” says Brigitte Majewski, vice president and research director serving B2C marketing professionals at Forrester. “Even if agencies improved everything, the clients have quite a bit of work to do themselves.”

According to Majewski, many companies simply aren’t asking their outside marketing partners for the right things. “When you don’t ask for the right thing, no kidding, you’re not going to get it,” she states.

The report identifies five ways in which marketers are contributing to the problems of the current operating model.

First, they frequently work in silos based on different channels, which are often reflected in the organization of agencies.

Second, they reward short-term thinking by prioritizing pitches over building lasting partnerships and encourage agencies to staff to a desired fee instead of to the actual cost of doing the job well.

Third, they squeeze agencies on price. As the number of marketing channels has increased, so too have the number of creative assets, the need for more complex executions, and the need for more diverse skills, but marketers still want to pay agencies less than they did when advertising consisted of fewer channels.

Fourth, although marketers have doubts about agencies self-assessing their value, they note that measuring marketing results is challenging, leaving agencies with no ways to validate their value.

Finally, they make agencies play by different rules. Consulting firms can work with more than one company in a single industry, but marketing firms can’t do that. This prevents them from building repeatable, industry-specific intellectual property and limits their operational efficiency and expertise.

The report proposes a four-part approach for marketers to improve the current model. First, marketers have to change what they need; they need to adapt their approach so that it aligns with the continuous flow of customer data, strive to create contextually relevant experiences for customers, and implement systems that enable them to measure the business value of these changes.

Second, marketers should change how things are done. This means that marketers need to challenge the status quo to shift the focus from creative, media, and measuring results in hindsight to an emphasis on the strategic combination of insights, experience strategy, and performance.

Third, they should adjust responsibilities, bringing data strategy in-house while simultaneously providing agencies with improved access to data and broader company strategies.

Fourth, marketers need to change how they pay for agency services. According to the report, measuring milestones in hours stalls agency innovation and stifles creative problem-solving. Instead, marketers need to establish a business environment that prioritizes, budgets for, and incentivizes investment in data, technology, and strategic hires.

“It’s easy to blame the agency; it’s much harder to look in the mirror and say, ‘What can we do better?’ First reckon with yourself, and then call your agency to task,” Majewski adds. 

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