We need a new breed of disruptor agencies to compete with consultancies

According to The Economist, traditional agencies are struggling to remain competitive and provide digital innovations that help brands deliver a memorable, personalised and deeply engaging customer experience. Now agencies are up against consultancies in the fight for work.

In the last month, Grey Group has announced it is launching a consultancy arm. If this isn’t a direct response, I don’t know what is. So what’s changed and do agencies now need to fight back?

Agencies, led by the big groups and advertising world, have long positioned themselves as the disruptive force within and for business. They found ways to ‘own’ insight, and create propositions that allowed their clients to zag when everyone else was zigging, driving first mover advantages and a share in the spoils. They received a place at the top table. But a mixture of complacency, lack of pace and/or investment in digital have led to an about turn. The expansion of consultancies sees the likes of Deloitte and Accenture now competing with them, flipping the tables and disrupting the agency sector.

These consultancies are showing how they can connect with consumers better using their tools – data, machine learning and service design. Turned off by the lack of agility, talent, innovation and business understanding in the digital space, clients are turning to consultancies or are increasingly looking to insource business analysts, CX experts, design teams, innovators and product managers, setting up scrums and launching garages to accelerate success. Agencies are being challenged at their ‘own’ game.

This, coupled with the big 4 coming ‘downstream’ into the activation of their business strategies, where once they handed them over to agencies, is seeing a further squeeze in this perfect storm. Clients are searching for partners who understand their business and technology and beyond this, who can truly drive digital transformation. They don’t want tactics anymore.

Agencies need to get back to doing what they do best, to survive and thrive in this current cycle of disruption. Here are seven actions to enable agencies to put up the best fight:

1. Build business cases, not websites

Don’t rush to solutions. Work with the client to understand the business strategy, customer needs, strategic/experience solutions, pricing and ROI scenarios to prove the business case. Consider recruiting analysts, and consultants from the consultancies themselves to add weight to credentials in this area.

2. Get proactive and creative

Prototype and build your own products and solutions. Prototyping is as much about understanding techniques and tools as it is about introducing new ways of working and behavioral shifts. Incorporating prototyping into everyday processes can lead to teams being more nimble, resourceful and curious.

3. Quantify the impact of experience enhancements

Identify what can be measured and when, and agree these measures of success. New research from KPMG finds that 72% of leading UK chief executive are frustrated by board pressures to show short term ROI from digital transformation with the majority thinking three to five years is a more realistic timeframe for measurement. Set up monitoring early.

4. Work to outcomes, not outputs and consider commercial models reflecting this

Work with clients to build value frameworks and be rewarded for accelerating business success.

5. Create a leaner experience of delivery for clients

Speed to market is critical and agencies need to recognise that things don’t need to be ‘finished to the edges’ to launch. A more agile approach to driving MVPs and a process of backlog management and iterative releases should be more widely adopted.

6. Be at the forefront of AI and machine learning

Identify how this can both drive efficiencies within business and enhance customer experiences through creating more personalised products. Don’t just consult on this but build intellectual property (IP) to be licensed. Machine learning can also improve efficiency within the agency. Rudimentary tasks like data collection, processing and reporting can be automated, with more time for people to focus on strategic planning.

7. Build a culture of intrapreneurship

Attract and retain the best talent by building a culture that allows for staff autonomy and multidisciplinary, cross-functional teams to work together. This will help enhance the sense of empowerment, ownership and belonging as well as fostering agility and creative problem-solving.

Technology is undoubtedly disrupting entire business models and creating more competition than ever before for the agency landscape. To stay relevant and future-proof, agencies must adapt their culture, skill sets and models to get truly disruptive once again.

Paul Vallois is managing director of Nimbletank

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