We analyse the relationship ups and downs marketers have with their agencies in our first ever survey of how B2B clients use agencies. Joel Harrison analyses the findings
Client-side B2B marketers are expecting to rely more and more on marketing agencies over the next 12 months, to take advantage of improving economic conditions. But B2B agencies need to continue to raise their game in order to keep their customers satisfied.
These are some of the key findings from the first survey of B2B clients’ use of their agencies, which will be included in the 2013 B2B Agencies Benchmarking Report – along with extended league tables and agency performance data (a snapshot of which will be published in the November/December 2013 edition).
The aim of the client survey was to uncover key trends in evolving client/agency relationships in order to help clients maximise the impact and performance of their agency partner (or partners), and for agencies; a chance to better meet client requirements. Over 100 client-side B2B marketers took part in this survey, of which 44 per cent were B2B leaders (team leaders with job titles including director, head of, CMO, VP) and 33 per cent were marketing managers. They represented a broad range of industry sectors, the biggest of which were IT/telecomms and financial services. On average, respondents spent £300,000 per company on agencies, which works out at £100,000 per agency (again, on average).
The full results of the client survey will be published in the B2B Agencies Benchmarking Report (produced in association with Circle Research) in November, but here’s our analysis of the key themes.
1. Clients are promiscuous
Only a minority of clients (17 per cent) work with a single agency, and almost half like to retain a roster of active agency relationships – 43 per cent work with three or more agencies (see figure 1). This means that although a few clients may have migrated to using agencies more as a long-term strategic outsourcing partner for marketing services, many still prefer to maintain a variety of agency relationships, probably for tactical projects, and requiring various partners to jockey for position on different projects, as they arise. Fifty one per cent of respondents said they work with agencies on a continuous basis, while the remainder regard their relationship with agencies as more ad hoc.
Access to multiple agency options obviously has its benefits, but so too does having a single trusted partner with a highly integrated and harmonious relationship. However, the failure of more brands to migrate to a single agency may be as much the fault of agencies failing to offer this kind of service as it is for clients for failing to demand it.
Commenting on the findings, Justine Arthur, head of communications and campaigns at BT Expedite & Fresca, says: “It’s a huge investment (both time and budget) orienting an agency into your brand values and design guidelines, particularly in B2B. But more important is educating them and transferring technical knowledge on the products and services we provide. I don’t think clients are promiscuous by nature but where there is equal commitment or ‘love’ between the two parties you can grow and develop together. If additional skills and services are required and can’t be provided by the agency, then again, it should be a team effort to find a suitable additional individual or partner to join the relationship – but all working within a core agency approach.”
2. It’s a people business
Digitisation of marketing has changed much about how agencies work, what they do, how they do it and how they engage with clients. But one thing that has not changed, according to this survey, is the importance of relationships and interpersonal contact and communications when working with clients – both in terms of winning new business and retaining existing customers.
By far the most popular means used by clients to identify potential new agencies to handle their marketing was personal recommendations by colleagues, as specified by 90 per cent of respondents.
This was higher even than previous suppliers, which was only specified by 79 per cent of respondents – suggesting that marketers would be slightly more inclined to start again with a new agency that came recommended than adopt the ‘better the devil you know…’ approach to agency management. The third most popular response (55 per cent) was to choose a company met at an event/tradeshow. It’s important to note the top three means of agency identification all involved a direct interpersonal interaction. By contrast, techniques of selection that did not involve direct interaction (including internet search, online directory or previous cold call/DM) were all seen as less important.
Interpersonal relationships were also important when it came to ongoing relationships between clients and agencies, with one third of clients saying they would seriously consider switching agencies if a key contact left the agency. The onus is clearly on agencies to ensure key personnel are well motivated and secure in their jobs, in order to minimise client churn.
3. Creativity cuts through
An agency’s creative credentials and output are the best means for it to differentiate
itself. In other words, despite all the changes that have impacted on the agency landscape over recent years, creative is still king. Respondents were asked which of a series of factors would be important to them when it came to choosing from different agencies, and to categorise these factors as ‘not important’, ‘important but expected’ and ‘would make a difference’.
According to 68 per cent of respondents creativity would make a difference in their agency selection, just ahead of ‘results of their work’ and ‘understanding of strategic objectives’, which were both identified as making a difference by 66 per cent of respondents (see figure 2).
By contrast, ‘location’, ‘good budget management’ and ‘ability to meet deadlines’ were the factors least likely to make a difference – cited by six, 21 and 27 per cent respectively. The apparent indifference to location is interesting and may be a reflection of the growing use of online meetings and productivity technology, and also the belief by clients that if the agencies want the work hard enough, then distance to travel to meetings will not be a factor.
4. Digital skills found wanting
The survey asked clients to rate their current agency (or agencies) on a range of key criteria to demonstrate their level of satisfaction with these aspects of the services offered. According to the results, agencies were performing best on staff friendliness (which had a mean score of 8.2), hitting deadlines (7.4) and results (7.2), which suggests they are generally pretty good at getting the core job done, on time, and achieving a reasonable result.
The areas where B2B agencies are being less successful, according to the survey, are value for money (with a mean score of 6.9) and sector specific expertise (6.8) and digital expertise (6.77). Being seen as cutting edge in the digital sphere is difficult in the B2B sector. However, there is evidence that many B2B agencies are failing to effectively provide some of the established digital channels – including email and the web. Proving digital credentials will doubtless remain an ongoing battle for B2B agencies in the coming years.
5. Opportunity knocks
Far from monopolising clients’ marketing budgets and maximising the number or size of projects they could be working on, only half of respondents spend more than 20 per cent of their marketing budgets on or with agencies. This suggests there is significant further potential for additional work and revenue generation for B2B agencies – this may be in the form of additional projects or new services that previously they have not provided to projects. If agencies can learn to act more like long-term, strategic partners to clients, rather than tactical service providers, there are significant rewards they could reap. This approach may demand new agency models, structures and skills, and the ability to recognise and adopt these may be the primary barrier for agencies seeking new types of client relationships.
Appetite from clients to rely more on agencies appears to exist. In the last 12 months 10 per cent more clients significantly increased marketing spend on agencies than decreased it by the same margin. And in the year ahead 27 per cent more clients expect spend on agencies to increase slightly than those expecting it to decrease by a similar amount.
Speaking from an agency point of view, Nick Jefferson, managing director at Gyro, says: “I think this is perhaps the most revealing insight, and underscores the gulf that exists between client needs and the ability of most agencies to service those needs. Most of our clients are Western corporations who, in a post Lehman world, subject to the pressure and commoditisation driven by the rise of Asia and the disintermediation brought about by digital, need to reinvent themselves, on a fundamental level. Creative thinking, when coupled with genuinely insightful and grown-up business strategy, is the only way to do that.
“That kind of blend of logic and magic doesn’t come from the McKinseys and the Bains. They don’t – and can’t – do it. We, the agencies, can. But only if we fill our businesses with Renaissance men and women, natural dot-joiners, people who are creative in the genuine, broadest sense of the word; not bag carriers and jobsworths. The opportunity, if as an industry we get it right, is infinite.”
Dynamic collaboration
The client/agency relationship has evolved significantly in recent years, in response to dramatic shifts in the economic and marketing landscape, but remains one of the key factors impacting on the success of B2B marketing activity. Despite highlighting faults in agency’s activities and behaviours, this exclusive survey suggests this axis remains overwhelmingly positive and mutually beneficial. For both parties to continue to thrive, they must work together to ensure this dynamic collaboration remains productive and continues to develop in the right direction.
Look out for the annual agency league table next month.