by Amy Stobie, Commercial Director at AgencyUK
Organisations invest in marketing because it has the power to create value for their brands. And the work agencies are commissioned to undertake for these brands is becoming more measurable by the day. When marketing communications works it’s the most powerful way to quickly build a base of customers and drive sales. But that’s not to say that agencies and their campaigns can work in isolation.
Most agencies today aim to be as commercially viable as possible – mindful that they are engaged with clients and their brands in their world, and their goal usually centres around making a profit. Historically for advertising agencies this was a concept seen as foreign, out of kilter with a creatively flourishing ecosystem. But times have changed. Now the most valuable client/agency relationships are based on clear commercial understandings. It’s an obvious thing that successful agency work will build client trust, build agency reputation and bring other greater mutual benefits. Most agency owners I know subscribe to the “if you grow, we grow” partnership model.
So being “commercially focused” is the key and it starts by getting your agency teams to think commercially on behalf of your clients, understanding risk allocation, developing strategic partnerships, and applying commercial expertise when meeting their business objectives.
With this in mind, here are my top tips to keep you and your team commercially focused, and your client/agency relationships strong.
1. Understand risk allocation
Often overlooked in smaller agency outfits and particularly pertinent when working on projects within your team that involve third parties, it’s critical to be able to understand and evaluate where the project risks lie. If you understand them you can fairly and equitably allocate them between your client and your agency. Understanding the risk ensures alignment of both your expectations, and it enables accurate and reasonable pricing of risk.
2. Implement a peer review process
No matter how senior the individuals are or how strong their commercial acumen skills are, it is human nature to make mistakes. Therefore when costing up projects or preparing a proposal it’s important to get someone independent to commercially evaluate your work.
3. Understand how your business and your clients make money
The main objective when pricing a proposal is to ensure it is competitive as well as providing you a reasonable return. It’s also important to understand the pricing models that your clients/suppliers use to make money as this will enable a commercial assessment of whether they’re making fair margins and if the services they’re providing represents fair value for you.
4. Manage your projects to deliver on agreed outcomes
Agencies over deliver, and usually take pride in it. But that’s not always good business and a reasonable balance needs to be struck. After you’ve planned your project for success it’s essential you ensure all the good work that was done upfront isn’t lost during the project delivery. It is critical to define and assign roles and responsibilities. Find alignment in each of these between you and your client’s team. Remember to continuously measure and monitor the outcomes to ensure you stay on track.
5. Keep your end goal in mind
Knowing the big picture for your agency is as important as understanding your clients’ business. Use this to understand the higher level strategic objectives and find alignment between them.