Insights

It’s time for research agencies to step up

Chris Merrington assesses recent worrying findings for advertising agencies and the relevance of these findings for research agencies. Early in 2015 the IPA explored the state of the client-agency relationship. The findings showed “a concerning rift…agencies enormously frustrated while clients are negative in their feedback about agencies. The chasm is significant” The impression given by 25 companies including Unilever, Premier Foods and Diageo was that agencies were doing nothing right. I appreciate that the IPA research looked at Advertising agencies however having worked with more than a dozen leading research agencies I am confident that parallels can be drawn and that the IPA’s findings are relevant to research agencies. I believe that there is a huge challenge ahead for research agencies. Yet this also provides wonderful opportunities for research agencies (and probably the other agency disciplines) to reflect and consider how they can step up to improve their client-agency relationships.

Other findings in the research highlighted that clients believe that agencies “don’t understand the numbers and can’t build business cases…” There are also new competitors on the block, Deloittes, Accenture and IBM. It was also found that clients are taking more stuff in-house. Clients want “faster, cheaper, smarter and better are just given.” Is this not also true for research?

If research agencies ignore these findings, what is the likely result? I suggest that your main client contact will move down the food-chain, your work will be increasingly commoditised with a corresponding reduction in value perception and correspondingly drop in your price and profitability. These changes become hard to reverse.

On a broader level business is changing rapidly. Clients have more choice than ever. The future is harder to predict. Surely this is where research agencies can help predict the future? Research agencies will become insight agencies predicting the next bend or two in the future for clients. Research agencies need to become business advisers as well as research specialists. In my work with research agencies I can see that only the smartest are responding and adapting to the new realities. Some are stuck in a time-warp and likely to be left behind.

Relationships are never static. They are always in a state of flux, either improving or declining. It is dangerous to assume that tomorrow will be like today. It is not realistic to assume you can continue to sell and deliver what you’ve always sold and delivered. So how do we step up for the future? There is no simple silver bullet. It will require serious effort and fresh thinking. Here are my top 10 suggestions:

1.     Stop, think and plan for the new future. Review your client relationships. Which see you as true business partners or solution providers or transactional providers which are bought predominantly on price? Are you dealing with senior decision makers who appreciate your value or are you working with research managers who are promiscuous and buying from the cheapest ‘supplier’?

2.     Segment your client base into those you should invest in, those with potential and those you shouldn’t invest in. This should be based on the relationship, your impact on their business, their spend and potential spend.

3.     Raise the quality of your conversations with those senior clients. If you want to be a business partner or trusted adviser your conversations need to reflect this. Start by having business conversations not simply going straight into research conversations. If you want to have ongoing conversations with the client senior teams/C-suite then you have to speak their language otherwise you’ll be passed down to who you sound like – ie the research manager.

4.     Review what you deliver to clients. Which elements are commodities and which are specialist services offering real value where you are seen as the gold standard, the best of the best. How do you need to upgrade your services for the new future?

5.     Don’t just focus on what you DO, focus on the RESULTS of what you do. Senior clients especially are interested more in value and impact and are typically less price sensitive.

6.     To your client do you sound like every other research agency? In my work talking to research agencies, both clients and prospects, there is frequently a lack of real differentiation. If there is no clear differentiated value proposition why should a client pay a premium?

7. Too often businesses are too focused on topline revenue. There needs to be an increased focus on bottom line profitability. Growing revenue without growing the bottom line is NUTS. A profitable business will have more confidence to do break-through work, charge premium prices and have peer to peer relationships. An unprofitable business is more likely to do the opposite and being desperate for business will chase after any opportunity rather than being selective.

8. Don’t simply pursue being “liked” by your client. It is more important to be “respected”. Your clients have enough ‘mates’. They need business partners who can give them a competitive advantage and help take their business forward. If you are really respected by your client for your expertise you are more likely to retain that client long term.

9. It all starts on Day1 in a relationship: ensure there are rules of engagement which both parties sign up to. If you are simply ‘yes’ people and unprepared to challenge the client, this is unlikely to be a long term sustainable and profitable relationship. Are you a DO agency or a THINK agency?

10.  A critical aspect of a robust client-agency relationship is the client brief. Turn your client’s average brief into a great brief by asking incisive questions, pushing the client’s thinking and listening. Of course you need to briefed by a senior decision maker. If you are briefed by a junior you have a train crash in the making!

Perhaps one final thought is to ask your clients how you can best help them adapt to their changing customers, competitors and market.

So how will your research agency step up? Or will you be out of step and left behind?