This data will help you think through how you want to position yourself with prospects and what kinds of clients are the best fit for your agency model.
This is a guest post written by Drew McLellan. He’s a friend of mine who heads up the Agency Management Institute (AMI), an association of small to medium sized agencies that has been helping owners grow their agencies since the mid 90s.
This past summer AMI partnered with research firm Audience Audit and Luth Research to conduct an original study exploring the reasons that CMOs and business owners hire agencies, what they’re looking for and how agencies can position themselves for relevance with their target customers.
Some of the key findings of the study include:
- 81% of respondents (regardless of segment) work with more than one agency
- The most loyal segment is also the segment that spends the least
- The big spenders think of agencies as vendors
- All of the segments believe agencies should have a depth of expertise in their clients’ industries (translation – no generalists, please)
Our goal was to understand the key attitudes driving substantially sized groups of marketing services purchasers and to identify those groups by shared needs, beliefs and behaviors. We also wanted to understand the differences between those groups, so prospects could be categorized accurately.
Ultimately, we wanted to understand what agency prospects valued, needed and how they chose to meet those needs, so that agencies can determine their best prospects and how best to reach and resonate with them.
Responses to a series of attitudinal questions revealed three segments within group of marketing decision-makers in our survey. Each has a very different perspective on the role they want their agencies to play, how they choose the agencies they work with, and the aspects of agencies they find most valuable (and most frustrating)
All of the segments generally agree that a key value of agencies is to conduct marketing activities their own staff doesn’t have time to tackle, that the best agencies need to specialize in a particular aspect of marketing, and that finding the right agency is mostly about a good personality fit.
Segment 1: Looking for Love (29% of respondents)
Respondents in the “Looking for Love” segment value agencies as a critical partner for business success. For this group, agencies are a key participant in strategic planning efforts, a trusted source of new ideas and insights about marketing trends, and a tactical partner across a wide range of marketing services and expertise. They feel it’s important to develop a long-term relationship with an agency, and expect that if their agency doesn’t have an answer they’ll know where to find it.
Segment 2: Playing the Field (38% of respondents)
The largest segment by a slight margin, this group sees hiring a marketing or advertising agency as a necessary evil to gain specialized expertise. They prefer to work with subject matter experts, and feel it’s important to change agencies periodically even if they’re doing a good job.
Segment 3: Single and Satisfied (33% of respondents)
Respondents in this segment feel their organizations are fairly self-sufficient when it comes to marketing. They believe that they have clear marketing plans and know exactly what they want. When they do use agencies for strategy, it’s as a source of ideas that can be executed by the organization in-house.
What prospects all agree on
One of the most surprising outcomes is that there is no difference between these groups industry, organizational maturity, size and annual revenue. From the outside, they look exactly the same. So agencies will need to learn how to screen their prospects before talking about strategy when they should be talking a vertical expertise or lead generation tactics.
While they are all very different, the three segments are unanimous on a few things:
- Agencies need to stop being pushy. This was the number #1 response
- Agencies need to communicate more often, providing regular updates and listening.
- Agency costs need to be more transparent.
- A guarantee, examples of specific results for clients and recommendations from someone they trust create the most positive impressions.
- Agencies are clearly favored over freelancers with regard to strategic thinking, expertise and being client focused.
To learn more about the research and the results, you can download a free copy of the 13 page research report.
Additional articles that may be of interest: