I'm writing in response to your October 2001 "Smooth Waters" column written by Andy Birol on advertising agency/client relationships.
You seem to imply that the relationship is necessarily adversarial and that agency and client interests are inherently contradictory. My experience at local, national and international agencies, as well as time spent as a client, all demonstrate the opposite. As counterpoints to your arguments:
- You talk about a compensation structure in which agencies make money not on their ideas, but on "revenue-generating production services." In fact, that mode of compensation is outdated and inaccurate.
Most agencies are compensated at least partly on a fee basis, not on production and media commissions. This provides the correct incentives to both agency and client -- agencies are compensated for their expertise in idea and strategy generation and clients receive "media neutral," unbiased production and media recommendations.
- By virtue of the above compensation structure, there is not a short-term financial incentive for agencies to engage in plots to "control" and "invade the world of business strategy" to "reap the profits" of executing tactics. Nor is there a long-term incentive.
Agencies thrive as our clients thrive, period. Therefore, to recommend strategies which benefit the agency at the expense of the client is the fastest way for both to go out of business. Not only would that be unethical, but also stupid.
- Finally, you state that small- or mid-sized clients are "not too profitable" for agencies, unless we can convince them to run a large program (implicitly, too large for what they need). Again, this thought is based on an archaic view of compensation and partnership.
Our smaller clients often find us invaluable extensions of their marketing departments. Not only do we bring strategy, ideas and passion to growing their business, but we have great depth and breadth of marketing resources -- sometimes more than they do.
Our small clients often grow to become large clients. Again, as they thrive, so do we.
I encourage you to talk to us, talk to other agencies, and most important, talk to clients. I feel confident you'll gain a different perspective.
VP, Marketing Strategy
How can your company walk the talk of being customer-focused? Here's a recommended course of action:
1. Involve your customers in defining programs and their ideal experience.
2. Understand your customers' definition of a job well done. Understand what they consider unacceptable, a must-do, a nice-to-do and what would wow them. Do this before you roll out a CRM program or an e-commerce site.
3. Keep the customer involved throughout the ''define and design'' stage. This will help you hone the program and work out the kinks in a preventive way, before the program or service is introduced.
4. Remember that customers at different stages of their relationship with you should be treated differently. Communication with your customers is like dating: They find you or you find them. The first interaction you have with them -- e-mail, in person, on the Web, or over the phone -- is pivotal.
5. Learn from others. Great information on best practices for e-mail marketing, customer loyalty, Web site development and CRM is readily available from books, magazines, conferences and on the Web.
6. Focus on continuous improvement. Track what is working and what isn't with your customers. Understand their priorities and identify three things you can do that would most dramatically improve your customers' satisfaction, repurchase habits and loyalty (and your bottom line). Make incremental and regular changes. Show customers you are listening and learning from them.
CRM initiatives can affect all aspects of provider behavior and related customer behavior. Costs can be reduced and revenue increased. If your efforts can influence even a single behavior or customer-related metric, the payback can be enormous.
Your investments in CRM initiatives will result in exponential returns, provided they are executed well.
I always thought this was an interesting way of putting it. This allows the country to withdraw its forces and reorganize while saving its dignity.
The same strategy can be applied to business. Some are withdrawing so they can reorganize to better face these tumultuous times. Since the inception of this magazine, I have never seen this kind of a business climate. Consumer confidence is lacking, fear is in the air and businesses are not sure what to do.
For some companies, this is a time for survival mode, while others try to preserve what they have and move cautiously forward. The tragic events of Sept. 11 pushed an already struggling economy over the edge.
So what are we going to do about it? We are going to fight. We can never give up, regardless of our circumstances. This is a time when we must all work together.
In his inaugural address, John F. Kennedy said, ''Ask not what your country can do for you, ask what you can do for your country.'' The same goes for us. What can we do as business owners to help our country and our economy?
One of the first things all Americans did after the Sept. 11 terrorist attacks was to connect with someone. We either made a phone call to a friend or family member or shared with someone at work.
This is because we are wired for relationships. It's these relationships that will see us through these difficult times, and it is relationships that will keep the economy going. As business people, we need to understand that we need each other. No person can be an island.
This is a time when we need to reach out to a fellow worker, family member or friend and share what we are going through. It is a time to reach out to other businesses and our associates to establish new relationships and solidify old ones.
Here are four reasons we should reach out to others regardless of our circumstances.
1. Wisdom comes from an abundance of counselors. The more people you talk to, the better idea you'll have of what needs to be done.
2. What goes around, comes around. Lending a helping hand in both your business and personal life now means others will help you when the need arises.
3. The best things in life are not things, they are relationships. Relationships are what define us as people and what move our businesses forward.
4. God opposes the proud and gives grace to the humble. Don't let pride dictate bad decisions. Performing your own strategic withdrawal in order to reorganize for another fight may be necessary to survive difficult economic times.
The world is a different place than it was a few months ago. The best way to get through these tough times -- both personally and professionally -- is to work together. People are the foundation upon which we should rebuild, because nothing can wreck a solid relationship.
So let's lend a helping hand and do our part to rebuild our fragile economy. Fred Koury (firstname.lastname@example.org) is president and CEO of SBN Magazine.
Reinhard, Kopko, Keller & McDonnell Inc., a CPA and consulting firm in Canton, has acquired D.C. Lemon & Associates, also of Canton.
Diversified Marketing Concepts has purchased the former Redicon Building in Jackson Township.
Akron-based All Aboard Promotions has merged with Think Abacus Inc., a Massillon-based business solutions provider. Steven Zeneri is the new president and CEO of the organization.
Avalon Distributing, a wholesale foodservice distributor in Canal Fulton, has been awarded the contract for 50 TCBY stores in a four-state area. Avalon Distributing is a wholesale distributor of food, paper and cleaning products.
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