This is a question that has perplexed us for some time. It arises from a number of recent conversations we have been involved in, and concerns marketing agencies of all disciplines that offer services to directly competing organisations within the same marketplace.
How does the agency decide which of its competing clients gets the best ideas? Is it done on a rota basis? Is it done on a size of retainer basis? Perhaps it’s done on the basis of which client is most likely to move agency if they don’t get the best ideas.
Whatever the reason, it simply defies logic. Unless the agency has sufficient personnel that it can deploy a whole account team, from management to creatives per client then knowledge of the other client’s campaigns and strategy will bleed across. We have heard that some agencies claim to have paper walls between clients, but paper is notoriously thin, easily perforated and hardly soundproof.
In their very successful book of 1995 - ‘The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market’, Michael Treacy and Fred Wiersema set out three winning positions for organisations to adopt - that of lowest possible cost, of maximum innovation or of customer intimacy. Clearly for any marketing agency it is the position of customer intimacy that is desirable if they are to be effective in delivering for their client. That position requires the agency to become so close to their client that they understand every nuance and effect of what they are proposing, how it will influence the market and how changes within the market will affect their client. To achieve this requires an open and honest relationship being built between the two organisations and that can only be founded on trust.
So, if trust is an absolute requirement for and effective relationship between the agency and the client, how can the agency also be working for a competitor to their client? Quite simply they can’t, and here’s an example of why not:
Competing clients A and B are working with the agency, let’s assume at this point they are retained at the same level and, because they are competitors, they are targeting the same markets. The agency creative team come up with what appears to be a winning campaign concept that would work to build and drive the success of either of their clients, how do they decide which client to present it to? If they give it to client A, how will they keep the trust of client B once client B realises what has happened?
Is the division of ideas based upon retainer value, length of time as a client, greatest potential to become a bigger client, closeness of personal relationships? If it is any of these then client B should be working with a different agency as their marketing is being compromised
It may sound like an oxymoron there are ethical agencies and you deserve to work with one, and agency with a set of values that includes not working with your competitors. Being industry specific is great, it allows a deep understanding of the marketplace, the position of the players within that market and the interdependencies. However, working with competing companies will always mean that someone receives second best at some point. The sales pitch from agencies that reads “we work with your competitors so we should be working with you” is a busted flush, much better is the pitch “We work in your industry and we don’t have a client in your niche”, then let the creativity and great ideas start to flow.