Diane Young, director of the Recommended Agency Register (RAR) argues there are strong parallels between the world of high finance and the business of choosing an agency. And the chief amongst these is that sentiment is the most powerful part of the equation.
Last year I decided it was time to finally grow up and give myself a financial education. I felt that at my stage in life, I should really have some sort of understanding what a unit trust or an exchange traded fund is.
So I got myself on to Amazon and bought myself The Financial Times Definitive Guide to Investment and the Financial Markets. It’s a hefty tome and an excellent cure for insomnia.
I made it to page 302 – just about halfway through.
But it was slow going and feeling more confident, and perhaps a bit impatient, I thought I would step things up to the next level and I bought, Dr Van K. Tharp’s “Trade Your Way to Financial Freedom”.
And on this one I actually managed to get right through it to the last page – 453 pages of volatility strategies and position sizing.
Am I now financially free? Unfortunately not, because to follow the advice of the book, I couldn’t have any other life apart from watching share prices.
However there was something in Van Tharp’s book that was stated in the first few pages and repeated again at the end because it is the foundation of every other bit of content in between. It struck me as highly relevant to the way that agencies and clients come together and how agencies go about developing their business.
You cannot trade the market. You can only trade your beliefs about the market.
What does that mean? Well shares might go up or down in the future, past trends may repeat or Black Swan type events might affect everything. No-body really knows. There is no absolute truth. So all anyone can do is work out what they believe and then take action based on that.
Now Dr Tharp is talking about shares, but I think this holds true for the selling and buying of marketing services.
Agencies can only trade on what clients believe about them. And clients can only choose agencies based on what they believe about these agencies.
So when you are trying to win new business and engage with new clients, strangely, it may not be the reality of how good you are that matters. All that matters is to what extent clients believe you are good.
That is where services like RAR, which has collected over 11,000 ratings can be really valuable to both clients and agencies.
For clients, choosing agencies based on ratings gives more intelligence on which to base their decisions than just vague beliefs. They get an insight into what it’s really like to work with an agency, from those who know best – the agency’s other clients.
And recommended agencies have got a much greater ability to influence the beliefs that clients have about them. They’ve got third party endorsements of what they are really good at and it’s made available to clients in a manner that allows them to compare their options fairly and with a great deal of insight.
Recommended agencies can get access to a summary of their ratings via an online report, giving them a clear idea what outsiders believe about them. Where there is room for improvement, changes can be made and where ratings are glowing, they can be used to back up credentials. And then other clients can develop their beliefs about the agencies based on evidence. Customer feedback has become a valuable currency in almost every area of business, and marketing is no exception.
By having third party-collected ratings, agencies can help to shape beliefs about them and then use those beliefs to trade their way to their own financial freedom.