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Agency/Client Relationships

From BMA Knowledge Base

Through its ability to deliver carefully prepared messages to target audiences, advertising plays an increasingly influential role in all sectors it impacts. Complex and ever-changing, it has evolved into a vital communications system for both end-users and marketers. The increased demand for sophisticated information about goods and services will put even greater pressure on agency/ client relationships as both parties strive for greater return on investment, creativity, prospect response and credibility.
Guidelines for Maintaining Healthy Agency/Client Relationships 

Through its ability to deliver carefully prepared messages to target audiences, advertising plays an increasingly influential role in all sectors it impacts. Complex and ever-changing, it has evolved into a vital communications system for both end-users and marketers. The increased demand for sophisticated information about goods and services will put even greater pressure on agency/ client relationships as both parties strive for greater return on investment, creativity, prospect response and credibility.

Ideally, both advertisers and agency management look for practicable, peaceful and profitable partnerships. Nevertheless, the 'us vs them' syndrome seems to apply no matter which side of the desk you occupy. The agency/client world is very different from even a decade agoCand yet, little has changed. The dilemma the two parties have always faced is the same, only more so today. The average cost of a b-to-b sales call continues to escalate, making the need to get a sales message out to buying influentials greater than ever before. With many options available to business marketers, finding the best avenue or mix for these sales messages is difficult.

All of which makes a 'practicable, peaceful and profitable partnership' an absolute necessity today. Survival depends on this partnership's ability to target pre-worded messages to pre-selected audiences. And good advertising does this more effectively than any other form of communications. It has become the principal communications artery for advertisers of every ilk.

Narrow Windows, Short Curves
Unfortunately, there is a fly in the ointment. Two flies. The window of marketing opportunity for virtually all advertisers is narrower today, and the growth curve often shorter and sharper. Why? Because technology moves ever faster, products have shorter lives before changes in needs or preferences come into play, and thus. cash paybacks often lean towards early recovery of a manufacturing/ marketing investment. A good agency/client relationship is imperative, otherwise everyone loses out.
In creating this ideal partnership it helps to understand the various ins and outs of such a marriageCand 'marriage' is precisely what it is. Let us assume a normal situation where conditions are right for such an effective working relationship. This means that:

  1. The client has made a methodical, detailed evaluation of alternative agencies before selecting the one best suited to his / her needs.
  2. The agency's assessment of the client was that it was a source of attractive new business consistent with profit and growth objectives.
  3. The agreement reached was formalized in a clearly written contract or final working agreement, covering details of agency services to be provided, legal responsibilities, a compensation plan, a termination policy (because nothing is forever), and so forth.
  4. The possibility of strains and pains is recognized. Even healthy beginnings, once operational, can develop them. They usually fall into four categories:

"Interpretationa1 Differences"can evolve from a buzz phase such as 'adequate involvement' meaning one thing to the agency and something else to the client. Another flawed working relationship is born.

"Externally Imposed Changes" usually come from the client side. expressed as complaints about the seemingly endless turnover in agency personnel assigned to their business. of course, similar patterns on the client side can be equally troublesome.

"Problems in Personal Relationships" surface when an AE finds that he or she is being regarded as a high-priced delivery person by either the client or their own agencyCor both. Inevitably, this results in the AE being unable to provide the level of service he or she is capable of providing. Yet. with both camps leaner now, assuring productivity (and happiness) in these relationships is more critical than ever before. With so many facets bigger and faster paced, the risk of error is almost certainly higher today, which makes any failures in relationships, and programs, more expensive.

"Slow or Ineffectual Reaction to Problems and Needs" occurs on both sides of the desk, lingers like a carelessly abandoned campfire until ready to burst into its full destructive force. and invariably burns agencies, not clients. Some problems are likely to be kept under wraps and, even if brought into the open, may never be resolved due to a lack of a mutually agreeable mechanism for doing so.

Now let's consider these four categories one by one.

Interpretational Differences
A 4A's survey showed that the average client / agency relationship lasts 7.2 years. However, indications are that there can be wide swings in this average for b-to-b relationships; high tech accounts, for instance, tend to change agencies in about half this time frame. "It's a trusted partnership . . . we have no secrets," one respondent said. The agency knows the markets, priorities and goals as well as the client does. Yet agency people often complain that when they begin talking about gathering information from the client's people, they're asked "Why do you need to know that?"
If there's a ready answer to that question, it is: Give your agency the benefit of the doubt early on in the relationship. In fact, don't restrict your largesse to 'early on" because changes in fast-moving markets must be tracked constantly. Keep the agency fully informed. Give them as much slack as possible. More knowledge = better understanding = more positive results. Clients need to provide their agencies with vehicles that allow them to effectively become 'totally involved' in the business of their businesses.

Sometimes there are security problems, or corporate policies against letting out certain kinds of information. Follow them. While keeping in mind that to do a better-than-adequate job, every agency needs as much information as it can digest. Let the agency be the judge of what it doesn't need to know, or cannot use. Agencies sell themselves on knowing more about communications than advertisers. True, but there is a flip side to this. Clients should remain constantly aware that no agency will ever know all the ins and outs of their business as well as they do.

Remember the ad manager? More frequently now we encounter a Manager of Marketing Communications or Marketing Manager. The new titles usually come with a broadened set of responsibilities and a much larger voice in all pertinent facets of management decision-making.

Bypassing Committee Kill
How well someone with these responsibilities functions is usually up to the individual. Communications planning by committee is becoming more frequent in this age of restructuring, according to many sources, even though there are few instances of its ever being truly effective. To bypass this danger, the person must be a strong, informed individual. He or she must be a party to the corporation's complete picture, otherwise there's a risk of setting erroneous goals that don't reflect the consensus of top management.
One blessing of B-to-B advertising is that the advertising or marketing department, if one exists, often deals directly with a high level of management. The real problem occurs when top management is not conveying sales or corporate objectives to the concerned people at a lower level. The best solution seems to be to compile a comprehensive questionnaire and get it to top management. (Such a questionnaire is, simply put, a means to conduct a marketing audit so as to better understand corporate goals and objectives.) once management understands the intent and value of a proposed advertising mix, they will require that subordinates enumerate these objectives.

This approach is invaluable in helping new marketing or communications staffers, and media people, to quickly orient themselves.

Ideally, such questions are answered when an agency and client first get together. But it's a good idea to go back on a regular basis, perhaps annually, better yet every six months or even quarterly, depending on the nature of the business, and have client management define and sharpen its goals again. The dynamics of the marketplace and the agency's capabilities and intelligence, and whether such factors as buyouts or corporate compression have altered the overall picture, will impact on the regularity of these reviews.

In short, pertinent and timely input = effective communications.

Who Pays for Travel and Time?
Client input is only one interpretational problem area. Another can be travel. Still another the amount of meeting time devoured by the client. No agency can anticipate all these factors. Consequently, they should be covered by preliminary discussions. But when they aren't, what's the best way to handle them?
Initiate ongoing face-to-face meetings. Sure this is more time and more expense and maybe more travel. But all well invested, because the more informed an agency is, the more solid day-to-day judgments it can make. Which in turn reduces the need for a lot of travel and a lot of meetings. Where there's inadequate access to people and facts, the cost of doing business goes up.

Going deeper, it's vitally important for the agency's creative people to get to know their accounts. sometimes even intimately. Too often they are isolated and don't get a firsthand opportunity to know and understand clientside people. Make key marketing, engineering and management personnel available to the marketing communications team; this level of interaction invariably leads to personal concern about the welfare of the account or campaign, to greater agency insight and to broader thinking about possible solutions to a need. That's human nature, the kind of involvement that moves advertising budgets from expenditures to investmentsCand gives clients a better ROI.

In short, every agency needs sound input to become a pro-active member of any marketing team.

After all this groundwork has been covered, it's important that the results be put in writing and copies sent to everyone involved. That way there's little chance of misinterpretation, unless it isn't read. At the very least, an annual, written Marketing Communications Plan is an absolute must.

In a perfect world, this kind of information-gathering and reporting never ends. A good agency approach to client service is to think of it as continuing education. Some professionals consider startup times and learning curves to be antiquated concepts. Yet, how can either side benefit if guesswork predominates and blue-sky thinking and creativity supplant plans and executions based on facts?

Recaps Are Vital
Serious thought should always be given to the discipline of having a written Client Service Report covering every personal contact that is made. At a minimum, all agreements on items requiring either side to spend time or money for completion should be documented. Client people review CSRs 48 hours or so after the meeting in question and can readily tell if the agency has the right idea, understands the needs, and is on the right track. Many times both parties think they understand each other. Instead, they're prime examples of the FD&H scenario: fat, dumb and happy. Without formalized follow-up action confirmation, a little glitch could go on for weeks, snowballing and affecting other facets of the work in progress. Then someone on high says, 'oh, we forgot - didn't you hear us say so-and-so?' The result is a lot of wasted time, effort, money and morale. Possibly even the planting of a seed of doubt about the agency's capabilities, even though the agency might be quite innocent. At the very least, conference reports - CSRs - are evidence of concern and progress.

One of the key functions of an agency account supervisor, no matter what title the office actually carries, is to call or meet with the client periodically, sit down with him or her, and ask candidly how things are going. If there is a weak link in the agency chain, this is where it should be identified, examined and strengthened. And of course, vice versa. Clients forge weak links, too.

Another consideration: Are you making productive use of telephone conference calls? Are you using them at all? Why travel to awkward out-of-town meetings when so many phone systems have conference capabilities? Give-and-take meetings where no one has to move from a desk or locale where everything's at hand can be extremely economical and productive.

Let's Do Lunch
A longtime, sometime bugaboo that can benefit from interpretation is client entertainment. Too little can hurt feelings on both sidesCbut historically, the client sideCwhile too much can appall budget watchdogs. often it's simply a matter of becoming familiar with a particular client's tastes, attitudes and policies, or perhaps agency policy governs this aspect right from the outset. A professional agency wants to be considered on the same level as attorneys and accountants (except, perhaps, when it comes to charges), respected for professional ability instead of wining and dining skills. Sensible socializing initiated from both sides of the desk can only help foster team spirit . . . and that is going to produce better work and make more money for everyone.
Every agency should make its clients aware of what goes on behind the scenes, and when outside suppliers are vital. The best solution for agencies is to give clients a list of agency fees, or other charging options, with time frames attached. This gives clients a rule-of-thumb for estimating job costs, and can save explanations and headaches later on. A production estimate for every job, approved (and signed) before the job is begun, will greatly reduce the need to justify costs after the work is completed. It will also assure that budget parameters are adhered to. (See two different job estimate forms attached.)

A friendly remedy for unrealistic deadlines is a document that shows client personnel the potential differences between the cost of a project completed in a realistic time frame vs having everyone on overtime due to what might be construed as unnecessary changes. Such a time-cost overview gives both parties time to think, to reconsider and to work with known quantities. It also supports account management when they tell a client, 'Listen, we can do that. We can do almost anything, because money is the key to getting jobs done. If you want a 4-color brochure printed in a week, fine - but be prepared to pay big for it."

Externally Imposed Changes
The primary problem here is personnel turnover on both sides. But agencies often get the bigger rap, perhaps because advancement in the agency business is viewed as hinging upon a number of judicious moves over a 'reasonable' period of time. (Who says it's any different on the client side of the fence?)
For agencies, the important thing is to ensure that there is continuity on every account, no matter what its size. often this means avoiding entry-level hires in key contact roles. There should always be a senior executive who can serve as a backup if a key member of the account team leaves. This should be established at the outset.

Documentation comes into its own here, too. This way new people have all the information they need at their fingertips. Otherwise, from the client's standpoint, the agency loses momentum on a project, and learning curves have to be repeated. High tech accounts particularly cannot afford that kind of black hole. If changes are inevitable Cand they areCthen fast restarts are imperative. Being unable to implement them can be a major obstacle to effective client service in many relationships. And that can put account retention on the line.

On a workaday level, agencies should have two key people involved on important accounts. Perhaps an AE and a supervisor, or an AE and the account's copy group head; whatever works in each situation. One tells the other what's happening, right down to routine phone calls. It's equally important that clients have similar backup arrangements. Making sure someone with answers is always available is a stabilizing force.

Another externally imposed 'problem" for agencies can be the unforeseen workload. Reorganizing or staffing up an account group is the obvious solution, but the transition period can be uncomfortable. Either formal machinery deals with this possibility, or the agency tries to stay flexible and 'do what has to be done.'

Problems in Personal Relationships
The age-old gripe from account service people is that they aren't treated as the professionals they really are. An AE's image tends to go hand-in-hand with the corporate communications manager's. If this individual has little or no stature within his or her company, it will likely reflect on the AE. Conversely, a strong client produces a high-profile AE; often, a high-profile agency team.
Inevitably, these relationships are bi-directional. Consider two potential scenarios. The marcom manager isn't forceful enough, so the AE goes over his or her head to seek direction or information - not exactly a diplomatic move. Conversely, an overly assertive marcom manager might make all the decisions the agency was hired to make in the first place, thus running the risk of poor work or having the agency search for a replacement account.

A common thread in good relationships is for the agency to make recommendations, documenting every step. If a program later goes sour because such recommendations were ignored, the agency is on record as having been against the direction adopted. Realistically, though, such an outcome doesn't guarantee a warm feeling all around.

Don't Sell Good Vibes Short
Many accounts are lost, not because of unacceptable work, but because of unacceptable personality clashes. People chemistry is critical to successful and profitable relationships. Both sides have a responsibility to avoid such conflicts. Cautious hiring practices are the obvious answer. A lot of grief can be avoided by working with psychologists to weed out personality types who are not destined to be good, flexible communicators.

In the best of all possible worlds, every agency/client relationship is mutually beneficial and profitable. If yours isn't, then potentially good work is being neutralized. Decide on the best and most palatable solution and implement it, because procrastination never pays dividends

React to Problems
Clients want guidance on costs and budgeting. That's one reason why they have agencies. Agencies, meanwhile, have at least two ways of approaching profitability. One way is to say they are responsible only to their bottom line. The danger here is that eventually clients know that when the agency walks in the door, click, the flag goes down and the meter starts ticking.
At the other end of the spectrum is the long-term philosophy that says when clients are successful it rubs off on agencies more often than not, anyway. The reality is probably somewhere in between, often foreshadowed by a cost accounting system at the agency. Admittedly, no one can predict how many hours it will take to dream up and polish a creative idea and subsequently, the finished advertising vehicles that spring from this genesis. Yet account managers are responsible not only for forecasting but also for developing profit plans that go right down to how many hours, how many people it is going to take in the coming year to meet a company's needs, so that a 'fairly accurate" income and net profit projection can be drawn up.

If these annual situational analyses pinpoint problems, then senior agency management should call their client counterparts and ask for shirtsleeve meetings to resolve such problems. These should be businesslike presentations, with printouts and similar documentation detailing precisely why costs are up. No one likes cost increases, but they can't refute facts.

When Candidness Counts
What about if either the client or the agency is unresponsive to a problem? For some reason it is too awkward to handle? Perhaps it's a manager whose performance is suffering because of marital or other personal problems, or an AE who is overly fond of long lunches. When such problems aren't addressed promptly, the resulting lag time can be damaging to the whole agency/client relationship.
Whatever problems might arise in this area, they can best be solved by open channels of communication at several levels - channels that are regularly used by everyone involved to the two-way activity of the account. There is no more risk of an agency losing an account through candidness than there is a risk of losing an account's respect because the agency didn't bring the problem to a head early enough.

So . . . advertising is a reflection of the society we have created, or inherited. It is increasingly influential. And it is increasingly difficult for those who practice it to achieve a greater ROI, more creativity, improved prospect response and credibility.

Patently, it's not solely an agency's responsibility to keep a relationship healthy. Clients must also manage and nurture these relationships by openly sharing information and remaining attuned to their agencies' needs. Schedule regular performance reviews. Have the presidents or COO's meet one-on-one, informally, to discuss the relationship. What a wonderful venue for unvarnished communication you'll be creating!

Long established relationships have mutual advantages. Plus one big danger: Complacency. The agency can avoid this by treating each account as if it were a new account each year, with something new and even more worthwhile to sell. And give this worthier product or service perceived value for the money it is spending: A livelier creative idea, useful information on competitors or the overall marketplace, applicable research findings or refined media recommendations.

Summing up, consider these 10 factors that contribute to successful agency/client relationships:

  • Personal Relations: This has always been a dominant factor. People chemistry is the catalyst that makes other things gel.
  • Interest in Business Problems: Agencies are no longer simply ad-makers, but marketing consultants and resources.
  • Service: It must be comprehensive, consistent and one step ahead of every client's requests.
  • Qualified Personnel: Vital to both parties. Make sure they interface.
  • Mutual Respect: (See above.) Isn't it part of everything covered here?
  • Realism: All recommendations won't win client acceptance and all programs won't win big in the marketplace.
  • Give and Take: Welcome each other's ideas
  • Annual Marketing Plans: These re-orient everyone and avoid complacency.
  • Teammating: Take your agency into your confidence, and watch the payback. Also works conversely.
  • Confidence: (See 1, 5 and 9.) Say no to solicitations. There is nothing more demoralizing to an agency than knowing its client is forever listening to the blandishments of other shops.

Three Golden Rule
Some years ago a major advertiser summed this paper's subject up when he said, 'We expect to find in all the services of an agency the very best and most disinterested counsel, even to the point of advising us not to advertise if the facts so warrant. This frequently happens, believe it or not.'
One account executive has said that his main functions are to anticipate, to administer and to represent. On the other hand, then, a client's responsibility is to advise, to adjudge and to acknowledge. Obviously, those are oversimplifications, but together they are a pretty good recipe for a healthy agency/client relationship.

Adopt them, adapt them, and add to them, and see how well they benefit you.
Click here for the white paper (PDF).

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