As the next decade approaches, the relationship between marketing agencies and their clients is evolving. On the surface, the goals of marketing agencies and their clients are the same: to attract more leads, customers and sales for the client. But when you look past shared good intentions and see how the traditional agency-client relationship operates, you’ll see that what incentivizes them is often at odds.
Let’s take a look at what savvy marketing directors and business owners need to consider as they evaluate their current agency providers and seek to maximize their marketing investment in 2020 and beyond.
The Old Paradigm: We’re In This Together … Mostly
In the current model, marketing agencies are contracted to do X amount of work per month, or to complete a project-based contract such as a new website or product launch. The model is deliverables-focused. Why? Because an agency has to know what they’re producing and how much they’re getting paid for it in order to manage costs and logistics.
Clients, on the other hand, are results-focused. They’re less concerned with how many blog posts or emails or social posts their agency produced this month and more focused on how many leads and sales they got from their investment.
After all, the whole point of marketing is to drive sales. For the client, marketing key performance indicators (KPIs) are leads and conversions. So ideally, from the client perspective, an agency should be compensated based on KPI results that prove the investment with the agency was worthwhile. And in a way, that’s what’s happening already, since a client isn’t going to renew their contract if they’re not seeing results.
Agencies know this, and they want to get results for their clients, both so they can keep the contract and because they take pride in their work. But there are a few challenges that make it difficult to realistically hold agencies fully accountable for KPI results.
Challenge #1: Factors beyond the control of the agency can influence results.
The fact is not all the factors that result in leads and conversions can be controlled by the agency. In most cases, the client has in-house marketing staff that is also partially responsible for meeting KPIs. There might be other agencies or contractors who also make contributions. Most marketers are too busy implementing projects to do the work of tracking who gets credit for what. Market fluctuations independent of the agency or the client also influence results.
There’s always a certain amount of risk in business: You come up with a great idea, you try it, and then you find out if it works … or doesn’t. And sometimes it doesn’t, despite the best intentions and hard work of everyone involved.
While agencies can promise to put their best effort into a project, they can’t guarantee it will have the desired result. This leads agencies to be focused on the thing they know they can guarantee: deliverables.
Because of this reality, it’s important that clients and agencies talk openly about what is and is not in the control of the agency, and the client.
Challenge #2: Results can take time to manifest.
Especially in today’s content-saturated marketplace, both online and offline, it can take months or even years to break through the noise and show up consistently enough to gain the trust of consumers. Oftentimes, clients will jump ship before campaigns have had enough time to gain traction. On the other hand, some companies keep doing the same thing over and over, hoping to see results that never come.
So clients and agencies need to begin their conversations not just by setting goals, but also by having a candid discussion about:
- How long a campaign will be given to achieve results
- How much money the client is really willing to invest in a project (it almost always takes longer and costs more than you think it will).
There are usually many more great ideas than there are resources to implement them, so clearly defining the top priorities is essential for managing budget and expectations. Investing in a few assets and giving them adequate time to produce results is usually a superior tactic compared to trying to do everything right away.
Challenge #3: Innovation is risky.
Clients want agencies to be innovative and come to them with out-of-the-box ideas … but those types of ideas are risky and don’t always work. If an agency’s compensation is tied to results, then it isn’t necessarily in the agency’s best interests to take risks. This happens with in-house marketing teams as well. By default, everyone is incentivized to play it safe. This also reinforces an emphasis on deliverables.
If clients want their agency to come to them with innovative ideas, it’s important to talk up front about how the risk will be handled, keeping in mind that both parties have to maintain profitability.
It’s also wise to have a process in place for vetting and prioritizing innovative ideas, and making sure there is a balanced mix of tried-and-true strategies with new strategies being implemented.
The New Paradigm: Fully Aligned Marketing Agency and Client Interests
To overcome these challenges and become truly aligned, marketing agencies and their clients need to focus on improving communication and expectations in four key areas:
1. Realistic Expectations Regarding Results-Based Performance Metrics and Goals
As mentioned previously, it’s important at the beginning of an agency-client relationship to:
- Clearly define the client’s KPI goals
- Discuss realistic timelines and budgets to achieve those goals
- Clearly identify who has control over what (and which factors are out of both the client and agency’s control)
- Make sure the correct metrics are being measured
It’s important to discuss which metrics will be tracked, what information can be gleaned from those numbers, and ensure that those metrics directly influence or result from the big picture marketing goals. Just because a metric is available does not necessarily mean it is valuable.
2. Monthly Budgets with Flexible Deliverables
There are some tasks that need to be done regularly each month, and there are times when flexibility is needed to capitalize on timely opportunities. At Eminent SEO, we often see opportunities we can take advantage of on behalf of our clients, but sometimes it’s not in the budget.
For this reason, we’ve begun working up front with clients to establish flexible budgets that can be used for a default deliverable, such as weekly blog posts, but which can also be channeled (in whole or part) into another area if a better use for that budget presents itself. For clients with limited budgets, the entire budget may be flexible, each month focusing on the next priority in the queue, starting with the low-hanging fruit.
This allows us to pivot quickly based on sound strategy, take full advantage of the creativity of our team, and keep everyone alert for opportunities to make the most of our client’s marketing dollars.
3. Collaboration and Mutual Respect for Multiple Perspectives
In-house marketing staff members are experts on the company brand and immersed in the day-to-day reality of their industry. This gives them an insider perspective, yet it can also make it difficult for them to see their organization the way others do. Agencies provide a valuable outside perspective that can help identify opportunities to hone messages and marketing activities.
Close collaboration between the agency, the client’s in-house team and any outside contractors is essential in order to achieve success without tripping over one another and working at cross purposes.
Within an agency, there should be team members who are experts in the client’s brand and voice, so that the client doesn’t have to expend resources redoing work submitted by the agency. At Eminent SEO, we have our writers, designers and strategists assigned to cross-functional teams that specialize in messaging and production for each client we serve.
4. Balance of Risk-Taking and Safe Marketing Methods
Do you want your agency to manage your day-to-day marketing activities, implement innovative new campaigns, or both?
Clients who answer this question up front and communicate it to their agency will see better results from their agency because it sets clear expectations. Consider the following:
- Manage day-to-day marketing activities – Success is measured by high-quality work delivered consistently on schedule, using techniques that are already known to be effective.
- Drive innovation – Success is measured by finding new tactics that get results, with the understanding that there will be more failures than successes, but that successful new tactics can be amplified over time by moving investment into those areas.
- Both maintenance and innovation – Separating agency activity into separate budgets for routine work and innovative work allows for more accurate tracking and expectations of ROI.
Together at Last
It’s natural for a client to expect its marketing agency to be accountable for results. By shifting to a more collaborative approach in setting expectations, and working with an agency like Eminent SEO that takes this same collaborative approach, clients are more likely to see the results they’re looking for, including:
- Agency efforts aligned with client’s business goals
- Clear expectations for all involved
- More effective use of marketing budget
- Results-oriented reporting
- Increased innovation
- Faster response to market opportunities
- Stronger working relationship
Read more about price-structure flexibility and six other traits of an evolving marketing agency: