If great relationships grow stronger over time, then why is it that the American Association of Advertising Agencies reports that approximately 650 agency reviews are conducted annually?And more noteworthy is the fact that incumbents retain the business less than 10% of the time. So why do clients continually include them in the process, even though their chances are so low?
After managing agency reviews for more than three decades, we’ve heard many variations of what boils down to three basic reasons incumbents are asked to participate in reviews: respect, obligation and of course, the mandated review—a.k.a. the period line review—often required by procurement or corporate mandate. With the exception of the mandated review, it has been proven that most incumbents have a “snowball’s chance in hell of winning,” according to Tom Finneran, executive VP of agency management services at the 4As. We can bear witness to that observation: Of reviews managed by AAR Partners over the last decade, only one incumbent retained the account—and it was a mandated review.
The agency review is typically a multifaceted process not intended for the weak at heart. It is time-consuming and pressure-filled, knowing that a critical decision lies at the end of a two- to three-month search. When another layer is added with regard to using the incumbent as not much more than a litmus test against which to gauge other contenders, there is a loss of time and loss of focus. Both have a negative impact on what is already a big investment in time and resources. Not to mention the costs incurred by the incumbent even though they’d have little chance of retaining the business.
So how does a marketer decide whether or not to include the incumbent in the review process? Ask yourself three simple questions and be brutally honest with your responses.
- If the incumbent has become complacent, it’s time to say goodbye. “The agency is very strategic and creatively sharp but they don’t worry about my business the way I do day after day,” said past VP of marketing at La Quinta. So many times an agency starts out strong, providing critical thought leadership, anticipating—and solving—challenges before they occur, truly being an equal partner. Then, over time, they start to get too comfortable; you find yourself pushing them for ideas, rather than having them proactively provide insights and recommendations. Those are the telltale signs of complacency, and they should not be rewarded. There needs to be an equal share of passion and commitment. If not, better to cut the cord early and avoid the inevitable.
- Has a sense of arrogance or entitlement set in over the years? “I know when it’s time to think about changing agencies. A sense of arrogance sets in where the agency doesn’t feel as if they need to listen to my concerns. It’s as if the agency thinks they know my business better than I do,” says Gord Kerr, past director, advertising and planning, at RBC Financial Group. Listening is one of the most crucial factors in successful relationships. It enables you to remove yourself from the issue and hear the other party’s strength. If it is apparent that your current agency is tuning you out, it’s likely not worth your time—or theirs—to include them in the review.
- Is the incumbent investing in its own people in order to stay on the cutting edge, to be more innovative, integrated, engaging and differentiated, not just by its capabilities but by its distinct position? “I want to know how the agency will continue to keep the momentum, passion, and ideals (not just ideas) alive after the honeymoon is over…typically it’s part and parcel to an agency team that believes in the client’s mission and vision and not just in the brand being sold,” says John W, VP of marketing at [Anonymous] International.
These are some of the key questions you should ask yourself once you decide to proceed with a review. You will save yourself and your team a tremendous amount of time and angst by recognizing that the relationship is not what it should be—that the agency did not maintain the passion and high standards they represented and demonstrated when they came on board. Severing ties is never easy, but inviting incumbents into reviews out of nothing more than respect or obligation is neither advantageous nor beneficial for the agency or the client. What’s worse than dragging out the inevitable? Spending more time and resources on it than necessary.
For more information on how AAR Partners could potentially help you with your next agency review, please call or email Lisa Colantuono at 212-400-1470 / Lisa@aarpartners.com.