Long Read: The secrets of a great client/agency relationship

What makes a relationship between an agency and client great is not only determined by transparency, creative alignment and freedom from fear. 

It’s knowing and understanding how to pitch value to a client who wants to cut the budget.  

And it’s navigating restructuring, particularly as the tenure of CMOs hits an all-time low. 

Many organisations and marketers are currently under significant cost pressures, pushing for a lower fee for the same services.  

“Unfortunately, many agencies comply to this by offering what appears to be the same calibre and number of people at a lower cost, which exacerbates the industry race to zero on fees,” says Darren Woolley, founder and global CEO of TrinityP3. 

“A better approach is to offer improved value, rather than just lower cost. This comes in two forms and the correct approach depends on the level of sophistication of the client.” 

Woolley says the first is the approach of increased deliverables or outputs and improved productivity.  

“This is particularly relevant in the production area for high volume clients either through streamlining and rethinking the service delivery model or the use of technology to provide greater economies of scale. These clients see improved value in getting more work done for less," he said. 

“The second approach is linking agency fees to the results delivered for clients that have the sophistication to be able to measure the results of their marketing either through attribution or econometric models. These clients are more focused on getting a better return on their agency investment.” 

Industry insiders noted that on brands looking to cut costs and for those seeking a better deal, procurement will generally have a target of 10-15% reduction.

These industry sources also told AdNews that the average length of contracts before they come up for re-pitch is three years for non-project type engagement, with an option for one or more one-year extensions.

Outside of price, other changes to key trading terms or procurement as budgets tighten include "extended payments terms that are increasingly popular with 60 and 90 days becoming more common".

Findings released by Spark Foundry Australia in October this year revealed that marketers view strategy and specialist skillsets as the most valuable contribution agencies can make to their business. However, many agencies believe that data and seniority are at the top of the most critical list for clients.

The results come from the recently released ‘Finding the Holy Grail: The Quest for the Ultimate Client Agency Model’ report – a qualitative and quantitative study of agency and marketing professionals across disciplines.

The studies found that while 80% of client and agencies agree that longer-term relationships made for stronger brand performance, the average pitch cycle is as frequent as two years and the average tenure of a CMO has dropped to 2.4 years.

According to the report, 46% of marketers also reported the greatest pressure they receive from non-marketing stakeholders within their businesses is substantiating why agency investment is required.

While 62% felt that longer lasting relationships generated greater creativity and innovation, the industry agrees it takes 3-9 months to onboard a new partnership, the report states.

For creative agencies, there are a few qualities they give credit for in establishing, growing and successfully maintaining a relationship with a client while navigating these industry challenges.

The starting point for those relationships is the leadership of the two teams, says Jules Hall, CEO of The Hallway. 

“At The Hallway that means one of the partners - myself or Simon Lee (CCO) - is accountable for every client in the agency. Because that’s what makes us different from the leaders of the multinational agencies: We are owners, they are caretakers. We can make whatever decision we need to take. They have a boss examining spreadsheets, in another country,” said Hall. 

The foundation of great client/agency relationships is a shared alignment on what ‘great’ looks like, he adds. There must be alignment on both the what and the how.  

“The what is the brand and work you aspire to create together, and the how are the ways you’ll collaborate to create it. That doesn’t mean processes, it means the sort of relationship you want to have - the values and behaviours that you all buy into," he said. 

Steve Maciver, head of marketing & communications at GWM ANZ, said with multiple stakeholders often spread across borders or time zones and with sometimes differing viewpoints, the importance of having the right conversations at the right times with the right people can’t be underestimated. 

He believes clear communication of the desired objectives, budgets and timelines at the start of any new project is the basis upon which successful outcomes are built. 

“Yes, there can be times when challenges and difficulties arise along the way but being able to look your agency counterpart in the eye and honestly discuss the issue and potential solutions is the most effective path forward,” said Maciver. 

Marijke Spain, associate creative director at Leo Burnett, agrees on this alignment, as well as the power of trust. 

This can be built in various ways, she says, but once there’s that foundation, the ability to sell in and make good work is a significant advantage.  

“There needs to be an alignment on creative ambition. If each party works to a different end game, there will be friction and, more than likely, not the best creative outcome - not to mention the angst that comes with it,” said Spain. 

For Robin Marchant, marketing director at Shopify APAC, the connection between an agency and a client needs to be an actual relationship.

"If it becomes transactional and without human communication, you will only ever get what you ask for. A true relationship should always ask the hard questions, challenge the status quo and never, ever be precious about a specific idea or concept," he said.

Honest feedback is also essential between the agency and client - both good and bad, notes Marchant.

"Stating clearly 'why' you liked something and also why you didn't. All of this needs to be underpinned by clear outcomes, goals, and success metrics. If you're both aligned, and open and keep each other accountable on the why and the outcomes required, you have yourself a team," he said.

For Rogers, pitching value to a client who wants to cut the budget comes down to the notion that value is in the eye of the beholder. 

She says pricing is important, but often not the sole decision criteria by which value is judged. It’s in these three principles.  

“What's the value of this work done well? Has time been spent on identifying the problem and a strategy first before jumping to cost-specific solutions? Usually when an agency can articulate the core problem, the solution comes in many cost and time forms,” she said. 

Which pieces of work is the client going to place its bets on?, she questions. 

“Experience is the most undervalued component of value. There are always going to be cheaper providers out there; small agencies, freelancers, Uni students, Fiverr, interns, you name it. But are they the best for the job at hand? Value is when someone is asking the right questions for the problem at hand, and a trusted, experienced team to execute, with a reasonable fee,” she said. 

Stephen O’Farrell, co-founder and managing partner at The Royals, believes freedom of fear is at the forefront of a client/agency relationship. 

“One of the great lessons that a mentor of mine, current chairman emeritus at DDB Worldwide, instilled in me as essential in any great relationship; benefit of which is being able to say (seemingly) stupid shit and not have it held against them,” said O’Farrell. 

Regardless of budget the same rules apply, he says. Be choiceful about opportunities to double down on and be brutally honest when underinvestment is going to compromise results.  

For O’Farrell, a lot of this boils down to the fact that the best client/agency relationships extend well beyond the CMO.   

He says a great agency should have contact with product owners, sales teams, the executive, technology and HR.   

“Many clients will restructure four and five times over the course of a relationship so ensuring you have trust established - across the enterprise and based on a solid track record of results - is key,” he said. 

It’s the importance of mutual respect for Tom Phillips, co-founder and CEO at Connecting Plots.  

“I remember in the early stages of running an agency, I asked a client to present a day in their life. It was a real aha moment for me & the team realising just how many responsibilities clients have outside of what we work with them on and gave them so much more respect for our clients’ time,” he said. 

“Conversely, I think clients often underestimate the pressures and challenges of managing an agency. When I’ve taken the time to share the implications of delayed feedback or cancelled work, it’s made them so much more empathetic.” 

On pitching value to a client who wants to cut the budget, Phillips believes its about managing expectations and working with the client to find an outcome that still achieves some or all of their goals in a way that works for everyone.  

“That may be reframing or reservicing the opportunity, reducing outputs or helping them work out what to cut elsewhere. It’s important to understand the context of the cuts and what they're hoping to achieve. Is it connected to the economic environment? Is it due to business performance? Or is it something to do with our relationship?,” he said. 

It's widely believed that a new CMO isn't a great thing for any incumbent agency, says Phillips.  

“And in our experience, I'm inclined to agree. All we can do as an agency is do great work, orient ourselves around the clients’ business goals, ensure the service experience is consistent and make sure every other relationship within the business is robust & productive,” he said. 

Al Gounder, head of brand and creative services at Chartered Accountants, says agencies must take the time to really get to know the customer, their challenges and those of the broader business.  

“I see this to be a fluid process that happens over time, not just at the beginning of the relationship and takes constant communication - texts, calls, WIPs, face to face,” he said. 

For Gounder, it’s also about getting inspired – it's easy to get caught up in the day-to-day churn so taking time out to be inspired and stimulate new thinking is so important, he says.

“With Connecting Plots we've done inspo sessions, chatted blue sky ideas over beers and more. It's about stepping out of the day to day projects from time to time to remember the bigger picture and broader possibilities,” he said. 

Katie Barclay, founder and CEO at Hopeful Monsters, said relationships built on mutual trust and respect are the ones that lead to the most effective work - where agencies can have those honest conversations and push the work, and clients, to think differently.  

“Our relationship with Converse globally is the perfect example of that. We started it here in Australia and it’s grown to be a global partnership across 32 countries around the world. How? Simply because we have a solid, trusted relationship based around doing brilliant work that delivers against their brand mission,” said Barclay. 

Dave Dullens, head of brand and consumer, Conquest Sports at Converse License ANZ, when there is an agency partnership with a deep understanding of the brand and strategic direction, built over years, they can truly become a valuable extension of a team.

"There’s a real care that’s built in these relationships – for the brand, and for the people; for the plans and projects; and for the success in what we build together. Our partnership with Hopeful Monsters is a deep one, when both parties ride the ups-and-downs and ultimately share the pride in the wins – it makes a great team where everybody wins," he said.

Barclay said nine times out of ten when a client wants to cut the budget it’s outside their control.  

“Global mandates or CFO pressures often means their hands are tied. If a budget cut means the campaign or work won’t be effective, it’s about being honest with the client, even if it hurts the agency’s bottom line,” she said. 

“If on the other hand a client wants to cut the budget to invest in an area that isn’t going to deliver value (or just result in a short-term win), often it’s about educating them on the value of long-term brand growth vs short-term gains.” 

When a new CMO comes in, says Barclay, it’s only natural they want to evaluate their agency partners - she would too if in their shoes.   

“But if you’re a high-performing agency that consistently delivers great work and has good relationships across the board (not just at the CMO level), there’s no need for any change,” she said. 

When it comes to doing the work, the magic can’t just come from the output. Great work is a result of great relationships, not a way to make relationships great, says Tim Kirby, partner at Galore Creative.   

“Attitude is everything, so agencies need to have an insatiable attitude for enjoying problem-solving, regardless of the challenge. We should be having fun. This industry should be fun! And clients should feel that spark in everything we do.” 

Galore’s foundation client, Sally Baker at Pernod Ricard Winemakers, said it’s great to be able to do away with any of the pretence and ego that sometimes comes with agencies.  

“Being able to trust an agency partner to understand your business, but still push your thinking outside your comfort zone - that’s where the magic is for us,” said Baker. 

Kirby said the agency has built a flexible model to ensure its clients know they're always getting great value.  

“No client ever wants to cut their budget, and the best way to handle it is to work with them to ensure we can all still deliver work that delivers what they need. It's a creative business, and this is the time when you need to get to your most creative," he said. 

To maintain the relationship if the CMO departs or changes, Kirby notes it comes down to the agency working in the people business. 

“But it’s people, not person. It’s the obvious answer of course, but the magic should happen across the team and not be focused on an individual relationship,” he said.