Can your agency business model thrive and withstand changes as CMOs tighten belts and bring more work in-house?
New research from Forrester suggests that agencies are coming under the gun as CMOs bring more work in-house and tighten their budgets. For marketers and agencies alike, it’s important to evaluate whether your current business model will keep you competitive in these changing times. Here’s a closer look at how the top agencies are staying on top of changing trends and remaining valued partners by even the most conservative companies. In addition, here are some specific tips to help you stand the test of time.
Transparent pricing: It’s easy to look at the economy and think that a thriving overall economy means reckless spending. However, today’s leaders are tracking every dollar, and businesses are increasingly demanding transparent pricing. Transparent means more than competitive; it means providing insights into what you’re charging for and ensuring that policies are fair.
Demonstrating return on investment (ROI): In addition to transparent pricing, the agencies customers return to time and again generate a strong ROI and demonstrate that. Your work creates value for customers. Have a plan to report on that value, and regularly present it to your client contact. When the value you create for brands is top of mind, it’s easier for even the most cost-conscious marketing leaders to justify the expense of keeping an agency on board.
Enhanced capabilities: Certain skill sets are needed on demand or impractical to have on board full-time. In some cases, they’re only needed on a project basis; in others, the talent with those skills is prohibitively expensive. Agencies can secure a coveted spot over the long term by identifying those gaps in marketing and sales organizations. Build practice areas around providing those skills sets, and help customers understand the price differential. Areas to consider include creative strategy, data skills, and technology, in addition to more traditional areas of marketing execution.
Value-added technology: Another area where agencies are standing out is by producing value-added technology. From attribution-management technologies to streamlined media-buying software, today’s top agencies are augmenting their value to clients with technology. When your offering includes tools, expertise, and execution guidance, a technology-based bundle helps increase your organization’s unique value proposition. Think about the processes and value you already deliver. Could new or existing technology tools increase the value that you deliver and make your services even more difficult to replace?
Agencies play a significant role in helping businesses achieve their goals, and CMOs are increasingly under the gun to find cost-effective solutions. For agencies, this raises for bar for delivering value and creates opportunities to rethink their business model to stay viable in the long term.