Insights

What shape will your agency be in?

It probably depends on what shape the recession will be. I’ve heard talk of the recession being like a V-shape, a U-shape, a W-shape, an L-shape, a Nike swoosh-shape (from Martin Sorrell a few months ago) and now an F-shaped recession from Mark Ritson – someone who says it as it is. He doesn’t mince his words. To quote Mark…

“This recession looks F-shaped to me. A big brutal fu***r that will run deep into the markets we all operate in for many months to come. Tesco is right to plot its contingency strategy. You should do the same. The panic of the virus now diminishes and the bastard face of the recession is revealed. It was always the scarier of the two threats that 2020 presented.”

If Mark Ritson is right, which he probably is, this means most agencies need to get ready for Armageddon.

Clients will be putting more pressure on you than at the bottom of the Challenger Deep – the deepest part of the Pacific Ocean. Client CFOs will be putting massive pressure on their marketing teams to cut spend. Subsequently your marketing clients will be putting massive pressure on their agencies. If their spend with your agency is seen as ‘non-essential expenditure’ by their CFO and CEO then get ready for an unpleasant conversation. What will suffer? Agency profitability and so much more.

Now is the time for agencies to develop their Negotiation skills.

Now is the time to build those senior client relationships and have real business conversations with them to help make a real difference to the client’s business. Every aspect of agency finances and client management needs to be reviewed by agencies. Agency fees, rates, scope, who works on which client, which clients to invest in, which to push back and your business impact for clients should all be under the microscope.

Let’s imagine for a moment I’m being over-dramatic then what have you got to lose? If anything your agency could be fitter, smarter and more effective for when we finally come out of recession, whenever that might be. And it might just be that your agency survives the coming months.

Agencies need to protect their business.

They need to anticipate and plan for the tsunami that’s on the way. Gyms aren’t open yet but agencies need to get fitter, leaner and smarter. We’re all in the same storm but we’re not in the same boat. There will be winners and losers. Which will your agency be?

If I can be of help then contact me at Chris@spring8020.co.uk