Shareen Pathak at Digiday recently quoted the co-president of one the oldest agency search consultancies in the business as saying that they’re becoming a commodity. The consultant said, “One big reason is because we’re all pitching on price.”
The article goes on to talk about how search consultants are expanding their services to adapt with the times, and how much of their job is about providing an objective third-party perspective between agency and client (read: guidance counselor). But the quote from Lisa Colantuono at AAR Partners is what caught my eye, because why are we pitching on price??
The purchase decision a corporate marketer makes when selecting an agency is a decision with significant emotional and financial consequences. It requires research and time to consider options. It requires the input of multiple stakeholders. Simply put: choosing an agency is a highly considered purchase.
With a considered purchase, it’s important for the buyer to take into account the difference between price and cost. The price of the purchase is simple: it’s the dollar amount required to obtain the product. But cost is more complex, and has far more significant implications.
What is the ultimate cost of a failed marketing campaign? What is the expense of conducting another agency review, bringing a new team on board and getting everyone up to speed? It’s more than the dollars and cents on the page, that’s certain.
Conversely, what is the return on investment of a long-term partner who intimately understands your business and brands? Or better yet, consider the positive financial impact of a highly successful effort with measurable business results. It’s no exaggeration to say that a strong agency relationship, based on a shared mission and true chemistry, is worth far more than what you pay for it.
Selecting an agency based on price can have a significant cost. My advice is that marketers approach their agency selection as a considered purchase, truly examining the financial and emotional consequences of the decision. And agencies need to pitch on value and outcomes versus focusing on the budget line. In the end we’ll all experience a better return on the investment.