You need to spend pennies to save precious pounds
You don’t need me to tell you that times are tight.
With inflation, wage demands, climbing cost of raw materials, cost of living, high energy prices and more, it would be an understatement to say that the collective impact on both consumers and businesses is significant.
We’re all having to trim costs.
Consumers by spending less – potentially on your products. Businesses by pushing down supplier costs wherever they can.
It’s a particular problem dealing with agency partners, because the road to getting more for less from your suppliers may be coming to an end. They are facing precisely the same problems as you are in terms of cost pressures and wafer thin margins, plus an added dose of pain from slashed budgets, and little in the way of wriggle room to make any profit at all.
They’ve manged to do it so far by putting more juniors on the business (in case you wondered why the work wasn’t so good) but even that is becoming less of an option as CEO’s quietly let people go so they can pay the bills – relying on freelance to plug any problem gaps.
And these issues of course will be common across the roster of agencies that you’re using, so the pain of negotiation with one agency will simply be repeated with the next. And the next. And the next…..
All of these agencies costs are built in the same way – billable staff, and the unseen elements such as back office staff, tech, rent and rates, heat and light etc. So when it comes to paying your agencies you need to be aware that you’re duplicating the unseen costs (generally 40-50% of the total agency fee invoices) across the number of agencies you’re dealing with.
It doesn’t take a PhD in higher maths to see the solution. Fewer agencies will result in less overall payment for overheads. And less time spent on repeated negotiations.
But moving from an existing roster to a slimmed down version isn’t straightforward. It’s not simply a matter of culling a load of suppliers and forcing what they did into the remaining ones.
You need to make sure that the structure of any new roster reflects the strategy of the business. You need to be sure where the talent lies – and how to secure it. And what the ways of working should be to ensure the new arrangements are working at maximum efficiency.
And there’s a problem here. Whilst procurement might see the benefits (and the way that might ease the pressure on budgets), marketing have never been more under pressure. The absolute last thing they need to do is spend time sorting out the wheat from the chaff agency-wise, working out who can do what, and whether they can deliver on cost, quality and efficiency.
And at the end of the day, they may the experts at dealing with their agencies, but they are not the experts in the way in which agencies work.
So to reap benefits down the line, you need specialist help. And with that will be the need for hard pressed budget.
But by spending the pennies now to save pounds in the future you could be reaping the benefits rather more quickly than you thought.
Why not take a look at our agency roster modelling services