Most managers in Strategic Relationship Management (e.g. Marketing Agencies or Strategic Suppliers) can list a fair number of reasons why relationship evaluations should be conducted on a regular basis. A typical list is shown below. The problem with these sorts of lists is that the benefits are all a little theoretical and lack direct practical relevance. Forget the theory, how do relationship evaluations really help? What practical help can I get from them?
Learn how to apply Business Intelligence to Marketing Procurement and Agency management in our new E-book. If you are an executive who works at a large advertiser, who has responsibility for managing relationships with marketing & communication agencies, and are looking for new ways to optimize those relationships, then this eBook is for you.
Agencies are valued partners in advertisers’ evaluation programs. They act as respondents in the relationship surveys our clients conduct, often they’re invited to play a role in shaping the program, and certainly they will engage to act on the findings.
Late last year the WFA and Decideware partnered to deliver a seminar to WFA Sourcing Forum members in Singapore.
All aboard? Why it's critical you have a formal on-boarding program for your agency partners and internal stakeholders!!!
Which president is this quote attributed to... "Complaining about a problem without proposing a solution is called whining"?
So what can you do to get the comments you need from your agency evaluations for meaningful action planning?
Are you simply using the "volume control" for your scopes of work? Or are you making sure you have the right mix?
How will you avoid the evaluation black hole?
You are about to embark on your agency partnership road trip. What's the most important thing you need to take with you?
A few years back I attended an excellent ANA course in San Francisco. The day's workshop, 'Optimizing the Client/Agency Relationship', focused on relationship management and was run by Joanne Davis, a leading light in this space. One of the key learnings I took from the day was how important it is to be a 'great client'! So how does this apply to agency evaluation?
This year's Procurecon Marketing conference was held in Nashville, with just under 200 agency management and marketing procurement practitioners in attendance. The size of the conference was perfect for networking, and we had the pleasure of hosting our first Agency Management Leaders dinner, with 20 marketing procurement directors and senior managers getting together to trade ideas and make new connections. Much of the value of these industry conferences occurs outside the official sessions, so it was a pleasure to help facilitate some of these discussions in a less formal environment!
I was recently researching the "people-centric" aspects of Agency Relationship Management, especially focusing in on how and why to collect feedback. I found a great definition for success.
http://www.ana.net/committee/meeting/id/MFWC-SEP15
At a recent ANA West Coast committee meeting, Olga Payne (Nestle Purchasing Manager) and Richard Benyon (Decideware Inc CEO) presented a one hour case study on how Nestle has successfully applied Business Intelligence to their Scope of Work program.
Back in 2007, Adweek highlighted the 50 year relationship between Publicis Groupe’s Leo Burnett and insurance giant, Allstate.
At a time when so much is written about the decline of long term client - agency relationships, this one receives plenty of interest.
The article reveals the five things Lisa Cochrane, Allstate EVP of integrated marketing and Nina Abnee, Burnett EVP of account management learnt from having survived and subsequently prospered from a difficult period in 2003.
They identify 5 important learnings to building a successful long term client – agency relationship:
This is the second article in a series inspired by a book published by Harvard Business School Press called "Managing Performance to Maximize Results". It is a compilation of articles, all based around Human Resources Performance Management - and in many cases the ideas and practical examples have direct parallels in the area of Strategic Relationship Management.
I am currently reading a terrific book by Harvard Business School Press called "Managing Performance to Maximize Results". It is a compilation of articles, all based around Human Resources Performance Management.
What drew me to read it was to investigate parallels between HR Performance Management and Strategic Supplier Relationship Management.
A great deal of theoretical research and practical study has gone into the manager/employee performance management process and I believe we can leverage this body of work to apply to the domain of supplier relationship management.
I was recently researching the "people-centric" aspects of Supplier Relationship Management, especially focusing in on how and why to collect feedback. I found a great definition for success ...
"Creates and/or reinforces focused, sustained behavior change and/or skill development in a sufficient number of individuals so as to result in increased organizational effectiveness."
Here are some tips that were elicited from research performed by the Multisource Feedback Forum. Carol Timmreck and David Braken created 11 guidelines for initiating and sustaining 360 feedback in performance reviews.
As part of the Scope of Work survey, the WFA & Decideware explored the entire Scope of Work process, including skills gap, approval, budget, rate cards and process standardization. Below is a summary by the WFA of peer recommendations regarding Scope of Work management:
What recommendations/ watch-outs would you give to peers managing the SOW process?
For more information please contact Steve Lightfoot s.lightfoot@wfanet.org
A well-controlled Scope of Work program is an integral part of a robust framework for planning and communication between client and agency.
Probably the most contentious part of the SOW process is when it comes to extrapolating the fee and determining whether it is set at the correct level. There is probably more press on this topic than any other in the agency management field.
As part of the Scope of Work survey, the WFA & Decideware explored the Scope of Work process, including rate cards. We looked to explore rate card usage as well as the level of detail agencies provide for cost. Below are the results as well as commentary from the WFA regarding the findings:
Have you negotiated rate cards on the following?
A well-controlled Scope of Work program is an integral part of a robust framework for planning and communication between client and agency. Most rational clients understand that if they want the “A” team then they have to pay for it!
So in order to optimize budget spend the SOW should clearly articulate which aspects are highly strategic in nature and thus need a “heavy firepower” agency team to be deployed on that work. Similarly they should also identify those that are lower priority and probably more tactical. Again this allows an appropriate resource mix to be applied.
As part of the Scope of Work survey, the WFA & Decideware explored the Scope of Work process, including standardizing the process. We also looked at the existence of a centralized database to store scopes. Below are the results as well as commentary from the WFA regarding the findings:
Does your company have a standard company-wide method of executing their Scope of Work process, i.e. using templates with standardized values, contracts, etc.?
A well-controlled Scope of Work program is an integral part of a robust framework for planning and communication between client and agency.
While looking into the elements of a Scope of Service and Scope of Work program, one aspect found in good SOW programs is consistency of terminology. One recommendation is to create a “dictionary” of terms for your organization. The goal of this "dictionary" is to break down the overall SOW into manageable and consistent building blocks. This allows new team members to more quickly understand the components and to learn the language and nuances of the organization. Below are additional elements to guide you through this process.
As part of the Scope of Work survey, the WFA & Decideware explored the Scope of Work process, including Scope budget and reconciliation. We also looked at the reporting that the agencies provide. Below are the results as well as commentary from the WFA regarding the findings:
Which approach to SOW management fits best with your organization?
A well-controlled Scope of Work program is an integral part of a robust framework for planning and communication between client and agency.
Although there is a wide variation in client SOW’s, there are some common building blocks that appear in many programs (though the terminology and order may vary).
As part of the Scope of Work survey, the WFA & Decideware explored the overall Scope of Work process, including the scope approval process. Below are the results as well as commentary from the WFA regarding the findings:
What are the duration types on your scopes throughout a fiscal year?
A well-controlled Scope of Work program is an integral part of a robust framework for planning and communication between client and agency.
As with other professional services categories the Scope of Work process is becoming ever more important in managing marketing spend. A well-controlled Scope of Work program is an integral part of a robust framework for planning and communication between client and agency.
As part of the Scope of Work survey, the WFA & Decideware explored the Scope of Work process, as well as potential skills gap in the management. Below are the results as well as commentary from the WFA regarding the findings:
Do you feel your organization has a skills gap in SOW management? How important are the following?
Do you feel your organization has a skills gap in SOW management? How well do you do the following?
As part of the Scope of Work survey, the WFA & Decideware explored the Scope of Work process, as well as overall participation. We also wanted to look at the role Marketing Procurement's involvement in this area. Below are the results as well as commentary from the WFA regarding the findings:
Who owns the SOW management process?
“Nothing ever happens after the assessment is finished.” This is worst practice! The whole point of relationship evaluations is that they result in actions to address identified issues – either building on strengths or fixing weaknesses. Yet a recurring criticism by participants in may agency relationship evaluation programs is that nothing ever happens after the assessment phase.
The World Federation of Advertisers, in conjunction with Decideware, conducted a survey to provide a better understanding of how major advertisers manage their scope of work programs.
The survey was conducted as a partnership between the WFA and Decideware in early summer 2014. Nineteen companies took part in this global research with responses coming mainly from marketing sourcing specialists. While results are not statistically relevant, they are indicative of the thoughts and actions of global multinationals within WFA membership.
In an eight part series, we will overview the results of the survey as well as concluding commentary from peer WFA members.
The World Federation of Advertisers created an overview of the survey and concluded:
All respondents feel that there is a skills gap in terms of SOW management.
The whole purpose of relationship evaluation programs is to get useful, trustworthy reports into the hands of the right managers so that they can then take appropriate action. This is a fundamental goal of any evaluation program. However, we hear repeatedly that established programs deliver patchy reports, late, and often to the wrong people!
A common frustration among participants in relationship evaluation programs is that the processes are opaque and that outcomes along the way are not immediately available. As a result, confidence in the program is undermined. And if participants in the program lack confidence in it, the effectiveness and the value of the program will be undermined.
Should the performance of the Client be included in the relationship evaluation program? This is a hot question at the moment.
The issues are implicit in the heading from another Decideware White Paper – “Can You Handle The Truth? Using 360 degree Feedback As Part Of Your Agency Evaluation Program”. But underlying this issue is the reality that the client ultimately leads the relationship (briefing and budgeting) and has the final say (approval).
Many of our clients these days set specific performance objectives for the year. They are often integral to incentive compensation calculations and payments. However, a common frustration is that the relationship evaluation program cannot accommodate measurement of performance against the set objectives. Nor include their level of achievement as a component of the overall outcome.
These days it is unusual if the Agency does not participate in the evaluation program. Benefits of their participation include:-
Low levels of participation by potential assessors often undermine relationship evaluation programs. This is a problem for 2 important reasons:
A basic goal of an agency relationship program is to uncover views at all levels and touch points in the relationship, an objective that is ever harder to achieve as issues of geography and devolvement come into play;
High levels of participation in the program enhance its value and credibility.
This ANA Thought Leadership magazine features 2 new articles from Decideware.
“Similar But Different, the Unique Challenges of Marketing Procurement” by Richard Benyon explores the key similarities between Marketing Procurement and Procurement – and argues that while there are distinctions in the marketing environment there are tools and techniques that can be successfully applied across both business environments.
“Making the Most of Your Production Spend” also by Richard furthers the argument that value and not lowest cost should be the goal of successful production spend management, and that access to reliable, timely production spend data is necessary to allow reliable analyses.
Decideware 's paper Beyond Costs and Rates - a practical guide to understanding value, discusses the cutting edge of Marketing Agency Management - i.e. measuring Agency Cost, Resource Planning and Agency Performance data to determine Agency Value.
This release in Decideware's "Innovation Series" looks at the important issue of using Scope of Work to manage agency value, and how to understand if you are getting the most from your agency spend.
In what must be one of the most unusual CMO presentations I've had the pleasure of listening to, Matthew Jauchius, EVP & CMO, Nationwide Insurance, provided insights as to how he has used marketing efficiency to drive the effectiveness of their advertising budget.
"Optimizing Agency Teams: A Decade of Change" by Richard Benyon explores the new models for managing multiple agencies to ensure that there is one voice for the client across all consumer touchpoints. The article also touches on the key processes that can assist in the implementation of these new agency models.
"How to Build an Effective Briefing Program" also by Richard Benyon explores the argument that the better the brief, the better the work that will come out of your agency. The article touches on the three key elements for creating a successful briefing program as well as key traits that comprise a quality program.
We would like to thank the Association of National Advertisers (the ANA) for asking us to author their new Insight Brief, Building an Agency Performance Management Program.
Written by Richard Benyon and Steven Wales of Decideware, this paper addresses 10 key topics topics:
This article introduces a tool we use to map agency performance - the Relationship Matrix.
The Relationship Matrix helps clients visualize the two key dimensions that all agencies must deliver on - Product and Process.
This is a powerful tool to deliver deep insights into performance, quickly. As such, it's a terrific "C" level report.
ANA Business Intelligence Webinar Details
Learn how leading companies are using data visualization techniques to uncover new insights and make more effective decisions in managing their marketing spend. This webinar, presented by Richard Benyon, CEO – Decideware, Daniel O'Brien, Global Business Analyst – Pfizer, and Diane Gibbons, Global Procurement – Pfizer, will look at how to apply business intelligence tools to analyze agency budgets and performance using the wealth of available marketing procurement data. Understand how well-constructed dashboards can assist you to better explore this data, distribute critical knowledge within your organization, and optimize all areas of agency management (including agency selection, scope of work, performance evaluation and production budgeting).
In an excellent article in M&M Global, Steve Lightfoot (senior manager, global marketing procurement, WFA) debunks some of the negative myths around marketing procurement - specifically research into 5 key areas that drive value.
With the high velocity of growth in this area, and the fact that leading advertisers are investing in quality staff and training, it is little surprise that over the last 5 years we have seen such fundamental change in how marketing procurement thinks and acts.
This is the second article in a series inspired by a book published by Harvard Business School Press called "Managing Performance to Maximize Results". It is a compilation of articles, all based around Human Resources Performance Management - and in many cases the ideas and practical examples have direct parallels in the area of Strategic Relationship Management.
I recently reading a terrific book by Harvard Business School Press called "Managing Performance to Maximize Results". It is a compilation of articles, all based around Human Resources Performance Management.
What drew me to read it was to investigate parallels between HR Performance Management and Strategic Agency Management.
A great deal of theoretical research and practical study has gone into the manager/employee performance management process and I believe we can leverage this body of work to apply to the domain of agency relationship management.
In developing agency relationship evaluation scorecards, many advertiser now want to define specific performance objectives for the year and accommodate that data into the overall assessment framework.
Questionnaires (or scorecards) are one of the most important elements in an agency evaluation program. Designing good questionnaires requires skill and effort but will contribute to a more effective program.
One area in which we are seeing a rising level of interest around agency selection is Capability Management, where large advertisers are seeking to capture the intellectual property of what specifically their agencies can do for them (i.e. the services they provide and areas they specialize in).
In the past this information has generally resided in each marketers' head, but with the involvement of procurement and the desire to optimize the portfolio of agencies, organizations are now looking to formally capture and utilize this data.
A common problem we encounter with relationship reviews is that participants at all levels are often unclear about the purpose of the program, and how it is implemented. Typically this problem occurs when a program has been in place for a number of years and has taken on a life of its own. The problem with this state of affairs is that administrators, evaluators and the agencies all become disenchanted and therefore reluctant to participate.
Many organizations find it so difficult to administer and manage an agency relationship management program that they end up skipping the most important phase – Action Planning. The goal of the evaluation process is not simply to gather opinions and information for storage! Rather, the purpose of the program is to develop actions that lead to constant improvement.
In a recent survey by the Association of National Advertisers "2013 ANA Trends in Agency Compensation, 16th Edition" one of the key trends is the inexorable rise in compensation agreements to use labor-based or fixed fees as the primary basis for agency compensation.
This year 81% of all client-agency agreements are fee-based, up from 75% in 2010.
This is even more pronounced in larger advertisers (spend > $500 Million) where a full 94% use fee-based compensation as their primary model.
This June 2011 issue contains two articles:
"Beyond Cost and Rates: A Practical Guide to Understanding the Value of Agency Relationship" by Steven Wales, which overviews the value of agency relationship and looking beyond the traditional theory of cutting costs. The article explores the "value equation" which views the overall worth of each individual agency relationship.
In "Driving Performance: Key Insights on How to Maximize an Agency Evaluation Program", Richard Benyon interviews Ken Lloyd, author ofPerformance Appraisals and Phrases for Dummies for his perspective on agency evaluation programs and how to maximize the evaluation process.
A few weeks back we had the pleasure of presenting a paper to theANA Financial Management Committee in New York.
We were also extremely fortunate to have two of our champions, Kim McMillon (who implemented at Hanesbrands) and Zac Belcher (key driver of the global roll-out at Procter & Gamble) provide their stories and insights.
A key message of our presentation was that an effective Agency Management program can be used as a lever to improve many aspects of financial performance.
We attended the AAAA Financial Conference in New York on Wednesday and much of the debate was again around the issue of Value-based compensation. This in the well publicised context that agency margins have been under considerable pressure as the basis of remuneration has swung away from commissions towards ‘cost plus’ pricing.
With the AAAA being the peak agency body it was interesting to contrast their views with those from the client side which we have been party to recently.
Please excuse the inflammatory headline, above because I am guessing that a lot of people, including myself are very interested in the opportunity to incorporate metrics of 'value' in agency compensation arrangements.
Click here to read/write comments