Earlier this month, a client invited me to join him for coffee. During our meeting, he challenged me to more closely align our pricing model to his company’s growth. Typically, we’ve found it best to operate based on a fixed retainer because it shields our cash flow from a client’s operational readiness or general enthusiasm for a project.
But this was a good client who was open-minded and quick to execute, so I agreed with his suggestion and added a performance component to our cost structure.
I’m still skeptical. The opportunity cost is pretty high. But I’m also proud: after all, I would never have considered rev share if we:
- Hadn’t built a useful reporting system with plenty of client input and buy-in.
- Didn’t feel comfortable challenging them.
- Didn’t believe in them – their people, their products, and their processes.
It seems obvious that a marketing agency would strive for these things, but like most things that require time and effort, they’re rare. We work really well with clients who check these boxes, and have a tough time when they’re missing.
So, here are three questions that you can ask to improve the dynamic between you and your marketing agency.
Are Your Insights Useful?
The best insights provides clues about what to do next. With a few exceptions, simple performance reports lack the context and perspective required to inspire meaningful change.
For example, consider a brand who knows their audience demographics really well, but their demographic-based targeting doesn’t provide good ROAS in terms of view-through conversions. They already know this, so delivering a report that shows ROAS by campaign isn’t very helpful. However, what they didn’t know was that intent-based targeting can provide a 20% lift in ad recall over demographics alone. This insight, coupled with a report that shows web traffic by inferred intent, is far more useful if they want to truly improve their campaign.
Reports are cheap. It costs marketing agencies a lot to produce useful insights. Usually this requires that an experienced analyst interviews the client and takes the time to understand their product, market, and the competitive landscape. Then they can translate the clients’ goals and ambitions into metrics and dimensions in the form of a report or data visualization. Season with insight, and then you have something actionable.
Have You Challenged Me?
Probably the most undervalued benefit of taking on a marketing agency or consultant is the fresh perspective they bring to the table. At Plura Interactive, every time we find something that works for a client, we add it to our playbook and try to imagine how to apply the same tactic to other accounts. Pushback is not uncommon and is usually tied to budget, so we try to come with a plan to test our new ideas without changing scope.
It’s important not to confuse challenging you with selling you services because marketing agencies must sell to survive. We literally have to be excited about new advertising products and campaign ideas because that puts food on the table.
Challenges are usually big-picture stuff: to think broadly about your brand and what it means to your customers, to embrace the long game, or to target a whole new audience, market, or competitor. These ideas aren’t the quick wins or low-hanging fruits that we already strive for – rather, they’re investments that usually carry a low probability of success, high reward, and/or can lead to an alternative way of thinking that provides for even better ideas.
In order for your marketing agency to feel comfortable challenging you, its important to convey a sense of open-mindedness and be receptive to change. You can still have high expectations for your bread-and-butter campaigns while also showing a willingness to embrace new things – even if they’re not exactly new. They might still fail, but they’ll probably fail for different reasons than you did.
Do You Believe In Me?
Marketers are people. People like different stuff based on individual experience. A decent analyst can usually gauge which markets are vulnerable to disruption, which products are viable, and whether a funnel will work. They can also guess whether and when a person, team, or process will fail.
Savvy agencies consider these things internally with respect to client retention and cash flow, but probably won’t share unless you ask them to identify potential points of failure.
Back to the first client: their products are great and their people are skilled, but their processes needed improvement. Because we believed in the first two, we invested time in helping to change their project management style and tools so that we could improve communication, expedite timelines, and generally work in harmony towards achieving our mutual goals.
In considering whether to alter our pricing structure for a particular client, we happened upon three facets that really define the agency-client dynamic:
- Establishing a reporting capability full of useful insights.
- Feeling like we can challenge them with new ideas.
- Believing in them and fixing what we didn’t like.
By exploring a performance-based pricing model, I had the opportunity to think critically about the value exchange between our marketing agency, our consultants, and our clients. While this model in particular may not work in all situations, I’d still encourage both brands and other agencies to adopt this line of thinking when considering whether to take on a project.