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Why is Agency Relationship Management worth doing?

Lucinda Peniston-Baines - Observatory International Lucinda Peniston-Baines Co-Founder & Managing Partner, London March 24, 2023

Given the scale of investment brands and companies make in the selection, engagement and activation of work with their agency partners, then ensuring the disciplines of best practice agency replationship management are in place to realise the benefit and value of that investment is key.

In our work with clients in many geographies and industry sectors we see a fundamental shift needed from what marketing does, to how marketing is done, such as:

– improving skillsets and capabilities

– a more effective use of resources

– the right mindsets, connections and behaviours.

Effective agency relationship management is just one component in achieving that – but an important one.  We see effective agency relationship management focused in three areas:

  • People
    Marketing and procurement professionals trained and experienced in best practice agency relationship management
    Clarity on roles and responsibilities
  • Processes, tools and templates
    Consistent ways of working and mechanisms to help all parties navigate the communications process efficiently and effectively
  • Behaviours and values
    Strong, long-term client agency relationships built on mutual trust, respect and open transparent communications
    A motivational partnership between client and agency teams collaborating to deliver brand growth

Top Tips for effective agency relationship management

For all clients, but particularly those under budget and performance pressure, the opportunity for greater efficiencies from their agencies, driven by improved ways of working and greater levels of efficiency, will deliver more bang for your buck. Here’s some top tips to ensure that you create the most friction-free, optimised agency relationships to stretch your budget and give you the competitive edge:

  1. Fit-for-purpose briefing – a good brief contributes significantly to creative excellence, whereas a poorly drafted and badly communicated briefs inevitably results in frustration, delays and escalating rework costs. Briefing is a core and fundamental skill and marketers should first be trained and then reminded what ‘great looks like’.
  2. Creative Evaluation – is a skill that needs to be practiced. Like a muscle the more you exercise it the stronger it gets.  Recognising and encouraging a good idea helps deliver competitive advantage and therefore it’s a skill well worth investing in.
  3. Performance measurement – issues will inevitably crop up from time-to-time in most agency relationships. Regular agency performance evaluation programmes are absolutely key to maintaining strong long-term relationships through the early identification of issues and also by highlighting best practice.  They also provide tangible data to feed into payment-by-results mechanisms.
  4. Remuneration – the best remuneration schemes are built around collaborative approaches – the desire and ability to genuinely manage the financial aspects of the relationship, monitoring it and discussing it with all stakeholders on a regular basis. Properly constructed and managed remuneration is the cement to the relationship and should be mutually beneficial to drive growth.
  5. Contracts – a contract provides a safeguard in the event of a dispute, setting out the terms of the relationship. Be sure to discuss and agree prior to agency appointment and make all key stakeholders aware of the key terms.
  6. Transparency – as well as simply having a contract in place, it’s valuable to ensure compliance to its deliverables by conducting an audit systematically and regularly to provide cost transparency and unearth hidden inefficiencies, especially from any ‘out-going’ agencies.
  7. Scope of work and budget – enable the agency to assign appropriate capability and calibre of resource, and the team size to fulfil the client teams requirements.
  8. KPIs – should ladder up to brand communications and business objectives, and are therefore important in helping to drive brand and business growth. KPI constructs should be simple; comprise hard, robust and soft measures be fair, measurable and agreed to by all parties.
  9. Embed best practice – senior marketers and procurement teams invest a lot of time in creating the right agency model, and then populating it with the best resource.  That investment is wasted if the organisation then doesn’t know how to get the best from that resource.  Best practice agency relationship management can be embedded in the organisation through Ways of Working manuals; Segmentation of the roster; defined roles and responsibilities between marketing and procurement; dedicated resource to manage the relationship; and training the teams to get the best from their agency partnerships.

To find out more about how we can support you with your Agency Relationship Management please click here.

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