At some point most marketers managing a significant sized budget will question if they really do need all of the agencies and suppliers they have collected on their roster. It is only natural. In fact a common question we often get asked is “how many agencies should I have on my roster?” The next questions is usually “What is the best way to structure and manage them?”
Getting your agency roster right will improve the performance of your agencies, increase the value of your advertising budget by eliminating duplication and bottlenecks, and allow you to focus your investment and optimise delivery. But no matter how you go about rationalising your agency roster you are bound to meet some challenges both within your organisation and externally from the agencies themselves and the industry.
How do you make all of the marketing capabilities you need fit into the minimum number of agency buckets? Strategic Supplier Alignment.
It is important before undertaking an agency roster rationalisation process you are aware of these challenges and have made plans to address these, otherwise your efforts may either stall or be completely undermined or undone.
What is roster rationalisation?
Roster rationalisation or roster alignment is the process of reviewing your agencies and marketing suppliers to ensure you have the most optimal number, type and mix to deliver your marketing needs. While there is no ‘one size fits all’ solution, there are a number of criteria to ensure you achieve the optimal outcome.
- Define the capabilities required
- Assess the capabilities of the existing agencies
- Match the agency capabilities to the requirements
- Achieve the maximum capability delivery with minimum agencies
There are several ways this can be achieved. A common procurement approach is to define the number of capabilities required and then to run a selection process to fulfil the best agencies to deliver these ‘buckets’ of expertise.
Over the years we have developed a more strategically aligned approach that takes a qualitative and quantitative approach with stakeholder interviews both within the organisation and with the suppliers and spend analysis to determine value of the process against possible outcomes.
This approach, we call Strategic Supplier Alignment addresses many of the challenges we highlight here.
Challenges Internally
Agencies and suppliers are on the roster because someone appointed them. That person may or may not still be in the marketing team. The reason the agency was selected may or may not still be relevant. It is important to remember this when planning to review and rationalise the agencies on the roster.
There is also the fact that for some marketers, they will spend more time with their agency or marketing suppliers than they do with any other stakeholders, especially in the marketing communications / advertising area. This means the marketing team will often have established and close relationships with some of the agencies on the roster at all levels within the marketing team.
Focusing just on the most senior marketing managers means you will often miss the power of the relationships at a grass roots level. Focusing on the more junior marketers means you will obtain a very operational and functional view and miss the more strategic connections and relationships between the agency and the marketers.
It is only by talking with a representative selection, if not all of the marketers that you get a comprehensive understanding of the current relationships and the perceived performance of the agency roster.
These relationships are important to the marketers and to their agencies and must be defined and acknowledged before you can undertake a review. When you talk with the marketers it important to explore the depth and strength of these relationships and the underlying reasons, both rational and emotional.
One of the problems when these discussions or interviews are undertaken by an internal team is the conversation is usually focused on the rational or practical considerations. Yet it is the emotional connections and relationships between the marketers and the agencies that are the most enduring and powerful.
We find as third party consultants, with a deep understanding and experience with these types of relationships, we are able to elicit and assess the underlying causes and strengths, defining the more valuable and powerful client / agency relationships.
We also find that to save time, some people are inclined to hold these discussions in group meetings. But again, our experience has found that we obtain a more personal and deeper understanding of the relationships and how they function in one-on-one interviews. While it does take time it is certainly more insightful as you avoid the inevitable group speak dynamic that occurs when facilitating group discussions of this type.
We find that understanding that these relationships can be more than transactional and deeper than simply commercial it is important to identify and understand this before making any recommendations.
Challenges externally
Obviously agencies are very concerned when told by their clients that they are undertaking a review of the roster, especially if procurement is involved. After all procurement is often only involved when there is a tender and the agency has the possibility of losing. Therefore it is important to frame the process correctly and to focus on the upside of developing clearer and stronger arrangements across the roster, without promising there will be no change.
Even then the agencies will often try to influence the marketers they work with and have deep relationships with to either protect their position or to provide them with the inside advantage by providing information on the process.
Agencies will also try to undermine and weaken the positions of the competitive agencies on the roster through all means possible including rumour, gossip and innuendo. You may or may not be surprised at some of the things agencies have said to try and disrupt either the process or their competitors on the roster.
Again, we have found that with a clear and articulated mandate form the senior marketers and in our role as totally independent advisers, we are able to build a high degree of trust with the agencies and provide a positive framework for the process with the focus on the more effective outcome for all involved.
A smarter approach to rationalising your agency roster
Our Strategic Supplier Alignment process is based on establishing a high level of engagement and understanding with all stakeholders in the process – marketers and their agencies and marketing suppliers.
It is through this qualitative understanding of the current roster and the quantitative assessment of the current spend data that we are able to provide a detailed and compelling recommendation that achieves the buy-in of all involved.
Yes the process is time consuming and detailed, but the relationships within the roster are important to understand and are not simply a commercial arrangement to be based on the performance of a tender process.
Essential to the outcome is a high level of stakeholder engagement. As independent consultants with almost two decades of managing this process we understand the importance of getting this right and delivering the outcomes required for our clients.
Our Strategic Supplier Alignment service helps you to untangle your supplier roster and understand its strengths and weaknesses to improve your performance. Learn more
