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In a constrained operating environment, agencies have had to get creative in delivering more for less to clients. They have also had to become more aligned to their clients’ business goals, says Avatar CEO and co-founder Zibusiso Mkhwanazi.

“What makes an agency a business partner rather than merely a supplier is understanding the customer and appreciating their business,” he says. “It’s about solving a business problem and allowing our customers to stay competitive rather than just coming up with a creative idea.”

Remaining competitive is going to become even more important, says Mkhwanazi, as the economy is further hit by ratings downgrades, drought-related inflation, a falling rand and increasing austerity measures. Marketing budgets are usually the first to be cut when times are tough, which is why it’s so important agencies get the most bang for their buck.

Good ideas and solving problems need not be prohibitively expensive. Ineffective work that doesn’t achieve its objectives is an unnecessary expense. The key to producing effective work lies in the channel strategy and achieving the right amount of frequency and impact, says Mkhwanazi.

In spite of being something of an outsider and what he calls a challenger agency, Avatar was recently awarded the Chevron South Africa account. As a result of the win, the agency will be opening a Cape Town office.

Challenger agencies by definition need not necessarily be the top performers in their category and are often considered underdogs to a degree. But they are committed to turning their position into an advantage and embracing new thinking – attaining success by attracting clients in competitive environments and delivering measurable results.

“We enjoy being an outsider,” says Mkhwanazi. “We’ll enter the market as an agency with an intimate understanding of digital and conventional media, but we also appeal to companies that want to create meaningful relationships with their customers.”

Relationships are the cornerstone of the industry, he says, regardless of the state of the economy. “Adaptation to a constrained business operating climate relies on how good client and agency relationships are. Agency structures and methods of executing work should be driven by what customers need, and the only way to know that is to strengthen relationships,” he concludes.

The big take-out: Tough economic times call for agencies to be challengers and align with clients as partners to find solutions to their business problems.