The subject of regular agency performance measurement can polarise clients into two camps.\u00a0 The advocates speak of the benefits of having their finger on the agency\u2019s pulse, the benefits of spotting problems early, being able to track performance over time \u2013 and for two-way evaluation programmes \u2013 of giving their agencies a voice to feedback on the client team itself.<\/p>\n
The detractors complain of the complexity of the available systems and see performance evaluation tools as yet another cost for the client to bear on top of the fees they are already paying the agencies.<\/p>\n
However, at The Observatory International, where over the years we have worked with both advocates and detractors, and across several performance measurement tools, we have identified five clear hard costs to an organisation of\u00a0not<\/u>\u00a0measuring your agencies\u2019 performance. \u00a0\u00a0They include:<\/p>\n
The downward spiral to expensive re-pitching<\/strong><\/p>\n Lack of regular performance measurement and the chance it offers to \u201ccourse correct\u201d can lead to expensive re-pitches if the client organisation has to replace the agency.\u00a0 The average self-managed pitch consumes around 44* client days in needs assessment, market trawling, RFI assessment, agency meetings attendance plus commercial and legal considerations.\u00a0 Indeed, the first commitment of the recently launched Pitch Positive Pledge by IPA and ISBA is \u2018Be positive a pitch is required.\u2019 \u00a0Spotting problems early and fixing them in real time, before they become major problems will not only keep the quality of the agencies\u2019 output high but save the cost of a pitch process, and the risk it can put your business or brand at during that period of distraction.<\/p>\n The cost of managing a \u2018bloated\u2019 roster<\/strong><\/p>\n When your rostered partners aren\u2019t performing well (and it\u2019s not being measured and resolved) there can be a temptation to go off-roster and work with other agencies to deliver short term solutions. \u00a0This has the potential to create inconsistencies in terms of brand and campaign quality, as well as add to the organisational cost of agency management (multiple touchpoints, contracts etc.)<\/p>\n Inefficient Campaign Performance<\/strong><\/p>\n \u2018Test and Learn\u2019 is an attitude that can be applied to agencies as well as to the campaigns they produce.\u00a0 The speed of change in the communications agency landscape means you need real time monitoring of your resource \u2013 is that agency still the best fit to deliver the task at hand? \u00a0Your PR agency may have got that social campaign out of the door, but was it done as effectively and painlessly as it could have been?\u00a0 Has your Digital Agency delivered social better and faster?\u00a0 Should you make the switch?\u00a0 Your choice of agency needs to be fast, flexible and adaptable, as does their output. Without more than an accidental water cooler conversation about which of your many agencies are doing well, you could continue to deliver campaigns inefficiently, and the campaigns will likely deliver inefficiently too.<\/p>\n Only measuring your retained agencies can mean a large, leaky bucket is left unchecked<\/strong><\/p>\n The move by many businesses to project-based fees for their agencies means many business-critical agency relationships are no longer considered \u201cstrategic\u201d and worthy of performance measurement.\u00a0 It can be considered an unnecessary expense to monitor project-based agencies.\u00a0 Yet this \u2018long tail\u2019 of unchecked project specialists may be delivering a high volume of critical work.\u00a0 Many small increments of inefficiency will be adding up to an expensive pot of money.<\/p>\n