What hinders fair remuneration?
“We sourced the best price for you”… “We’ll provide you with a reconciliation of resources used”… “We’re losing money on this”…
Sound familiar? These are some of the more common phrases we’ve heard from agency folk recently, via their clients. Designed to make marketers feel comfortable with the agency investment, they don’t always represent the truth. This is why consultants like us are called in for benchmarking, compliance, and value review services.
While pacifying comments like the examples above are communicated, complaints from agencies about clients have become much more regular.
From the agency perspective, some of the most common complaints we hear centre on the following themes:
- Lack of inclusion in key updates
- Poor briefing – either convoluted or sketchy
- Unrealistic timeframes – showing a lack of knowledge of agency processes
- Unrealistic expectations – about inclusions and exclusions
- And (the biggie) unfair approach to remuneration.
So on one hand, the agency soothes the marketer to alleviate concerns. And on the other hand, agencies are complaining about unreasonable client behaviour. Are agencies enabling bad client behaviour by not addressing identified problems? Is it a case of ‘don’t bite the hand that feeds you’? Does bad behaviour then proliferate?
Unsurprisingly, the dominant complaint is about money. So often we hear agencies complain that clients aren’t fair when it comes to negotiating remuneration. Words like ‘ransom’ and ‘unprofitable’ are used. Apparently marketers don’t pay fairly and are more interested in getting the cheapest supplier (muwhahaha… laugh the villains).
If this is true, what prevents clients from being fair and reasonable in terms of remuneration? Is it simply greediness, or budgetary pressures? I can’t help but think it’s a trust issue. Marketers may have a bad taste in their mouth from when they were taken advantage of by former agencies. Agencies were often not transparent with their costs, by:
- Refusing to divulge individual or specific rates
- Refusing to be honest about third party mark ups
- Participating in skimming
- Charging exorbitant fees for small projects
- Lying on timesheets about how long a job has taken.
Agencies can’t be held to ransom by clients who aren’t fair and reasonable – that is absolutely accurate. But given the marketers experience historically, it’s worth encouraging agencies to do the following:
- Prove your worth – make it hard for marketers to complain.
- Don’t say yes to unprofitable business, and then try to make up for it by overcharging your next client – it’s ok to say no!
- Practice what you preach – in order for marketers to be fair, agencies need to be transparent. The onus is on both parties.
And for marketers, do your research on market benchmarks, and source counsel as needed. Talk to your agencies about setting up systems and service agreements which are fair and sustainable. And to rebut those agency woes, endeavour to give agencies a chance to prove their value – set them up for success. How? Get in touch to find out.