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Exploring alternative commercial models to help build more valuable client relationships

By Mette Davis, Founder

ouragencyvalue

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The Drum Network article

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September 30, 2019 | 3 min read

Last week, Shaun and I chaired another event for the South West Drum Community, kindly hosted by the folks at Six. As voted by previous event attendees, the purpose of the session was to explore different remuneration models.

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OurAgencyValue hold event supported by Six.

We kicked off by revisiting some of the challenges that clients and agencies are facing in our industry, including outlining specific client needs when it comes to their agency relationships – many of which are connected in some way to remuneration.

We then explored the models in more detail, including the principles, benefits and pitfalls of each. We started with more traditional models, before diving into newer models including Performance Related Pay/Performance by Results (PRP/PBR) and Zero-Based Budgeting – and how they might apply to different channels and agency specialisms.

Our break-out brief focused on helping agencies to think differently about the way they approach remuneration with their clients, and encouraged them to embrace the relationship with both procurement and their marketing clients, working together to effect change.

Based on the models discussed, and the break-out brief, we agreed that in many ways, the traditional models are no longer fit for purpose. But, that as an industry, both clients and marketers still seem reluctant to change their approach. Is there a way that we can balance the sales-focused short-term behaviour with a longer-term brand building approach? A ‘two-speed approach’ as Mark Ritson calls it.

Key take-outs

  • Don’t be a stranger to innovative ideas when it comes to remuneration. We are creative businesses after all, and coming up with creative solutions to complex business challenges is what we do – Julian Barclay, Six.
  • Have more up front conversations with Procurement teams to understand their drivers and objectives, and then work out how you can create more value for their businesses – Doug Nestor, Great State.
  • Be more consistent with your approach and settle on what works best, rather than trying multiple different models – Emlyn Davies, Bomper Studio.
  • Take the initiative with clients on value-based conversations and alternative models, and suggest working it out together with both Procurement (or the FD in smaller client organisations) and direct marketing clients – Shaun Cooper, OurAgencyValue.
  • Start having more KPI-related conversations with clients – Lee Nathan, StudioVine.

We agreed to collectively try and find some success stories from clients and agencies who had implemented elements of value-based pricing, and that we would all start to have more meaningful, value-based conversations with our clients. We also agreed that these sorts of conversations would help us build deeper client relationships and deliver even more effective work.

Mette Davis, Founder at OurAgencyValue.

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