How to form strong, long-term client-agency partnerships
TBWA\SA and Spar share insights on how they’ve beaten the industry statistics to celebrate their successful 50-year relationship
Creating relationships with new clients and customers may be the recipe for business success, but most creative agencies find it difficult to maintain ties that last for five years or more. Agencies should examine how long-term relationships can be improved and nurtured in the industry.
TBWA\SA CEO Luca Gallarelli is the right person to ask, as his agency and retailer Spar recently celebrated a rare golden anniversary — cementing a 50-year partnership.
“Maintaining a strong client-agency partnership involves three main ingredients: Trust, care and ongoing value contribution. Naturally, trust is foundational, but it compounds over time like any relationship. It is essential to work from the position that both parties want to succeed and have an active role to play,” says Gallarelli.
Research in the Agency Scope 2021/2022 SA study indicates the average length of a client-agency relationship is 4.3 years for a creative agency, and 4.5 years for a media agency.
Wimpie le Roux, MD of TBWA\Hunt\Lascaris in KZN and lead on the Spar account, says these poor industry statistics highlight the need for a mindset shift across the industry.
“A short-term switch after a three-year retainer means wasted time onboarding a new agency; immersing them in the values and culture; and ensuring the business is fit for purpose in the fast-paced digital age. Never mind the extensive costs associated with the initial pitch.
“What makes the TBWA\ and Spar relationship different is that the agency provides the business with a window into the broad SA market, consumer behaviour and opportunities on the horizon. Spar’s focus and priorities are inwardly focused. But the agency keeps an objective eye on the market, and on the levers the partnership can pull to remain relevant and resonant with customers,” says Le Roux.
Spar’s group marketing executive, Mike Prentice, says working with a vested agency partner helps drive success and growth.
“Due to the tenure and understanding, the agency has been instrumental in bringing many innovations to market — Tops and Build It as stand-alone business propositions are two good examples. To unlock this value and long-term sustainable business impact would be difficult to achieve in a three-year cycle.”
The Agency Scope study says to achieve success and build better partnerships, client and agency relationships should be optimised through regular performance tracking on an annual basis, unless there is a major reason to conduct these more frequently.
The Agency Scope says clients and agencies make the mistake of only conducting relationship management exercises when the relationship is in trouble. It recommends a proactive approach so performance can be maximised on both sides and monitored. That is the optimum way of managing these relationships over time. Le Roux says the value contribution has to be ongoing.
This way, costly, time-consuming and unnecessary short-term agency turnover and pitches can be prevented, or at least circumvented. Research shows the pitching process, whether strategic or creative, requires substantial financial and time investment by agencies — all which are hard costs.
Agencies don’t have the luxury of dedicated new business teams and regular pitching puts a strain on existing resources. An agency will often put their best teams, strategic intent and creative output on the line, which could lead to loss of focus on existing clients and potential loss of business.
Emotional costs are also something to consider. As pitching and new business are the lifeblood of agencies, they put their hearts into pitches and are devastated when they lose.
Mathe Okaba, CEO of the Association for Communication and Advertising (ACA), the official industry body, says the relative cost associated with pitching for work has been a long-standing proverbial thorn in the side of the profession.
“While the cost is variable and dependent on the size of the business being pitched for, the reality is that for small to medium agencies, the investment required becomes prohibitive. This results in the exclusion of smaller agencies from participating in the pitch process,” says Okaba.
Historically, the ACA recommended a pitch fee of R50,000 be paid to unsuccessful agencies in lieu of the costs incurred. But in most instances this did not cover the cost of the exercise.
The ACA now recommends clients consider a shortlist of a maximum of five agencies, (allowing for small through large agencies to participate) in the final stages of the pitch process. This provides all participants a greater chance of success, and for smaller agencies, an opportunity of being part of, and building, a more diverse and equitable playing field.
The key to longevity, symbiosis and healthy client relationships for an agency, as a consulting partner, is ensuring it has a voice from the start and that it is heard when it matters most.
“Due to the power dynamics in a client-agency relationship, clients are sometimes positioned as all-knowing, which could negatively effect creativity, strategy and decision-making. However, knowing when to give and when to heed agency inputs — as long as those inputs add value — is a critical component to achieving success and cementing a relationship that reaches its golden anniversary,” says Gallarelli.
This article was paid for by TBWA\SA.