The Importance of a Regional Company and Its Agency’s Relationship

Why do mid-market companies look to make agency changes?

Regional companies compete against national brands. One edge they have, if utilized correctly, is their nimbleness to shuck and jive and geo target their individual market media campaigns, instead of throwing a national media net over their customer base. They’re in constant pursuit of unique ways to create consumer brand loyalty. These companies do their best to understand their core customer and deliver what they want and need to keep their brands successful.

Unfortunately, these regional companies do not always give their advertising and media agencies the same loyalty that they crave from their customers. The average amount of time a business retains a CMO these days is approximately three years, while the time spent with their agency is only two. Is there any direct correlation? Probably, however we’ll save that discussion for another time.

Typically, at some point during the second year, many companies begin looking for something new that will make an immediate impact to their sales profits and bottom line. A new agency must be the answer, right? It’s an easy choice and it may be deflecting their own internal inefficiencies or short comings.

So, new agencies are herded in to “pitch”, explain their differences, and why they are the best choice over the current agency and the competing agencies vying for the new account. Are they really a game changer? Maybe or maybe not. If there’s a truly distinguishable positive difference, then the switch should take place. However, it might be time and trust that makes the biggest difference to a regional company’s bottom line, and changing agencies every couple of years may do more harm than good.

Your agency shouldn’t be treated like just another vender. They aren’t selling you a widget, a pen or a ream of paper. They should be a partner because to help you succeed, they need to be ingrained into the fabric of your company. They’re no different than a new hire. They need opportunity and assistance to succeed. In order to do this, both sides need to understand two things:

1. They should know your product or service inside and out. They can’t just be familiar with your brand. That isn’t enough. They need to know exactly what you do, how you do it and most importantly, why you do it.

They need to speak your language as well as understand the industry you’re in and how it works. By immersing themselves into your business they’ll become a true partner and make better decisions with you, on your behalf.

2. Another important factor to a regional business, which a good agency partner needs to fully understand, is the localities of your products or services. An agency should know the nuances of your distribution areas and your consumer demographics and interests.
They should be in tune with the different economic, age, workforce, behavioral and even weather conditions in each of your markets because those idiosyncrasies should all be factored in when regional brands market themselves. Understanding each market and its nuances is imperative to the success of a regional business.

Working with an agency that has done the research, traveled to different markets, spent time with your staff and experienced your business climate firsthand, should be at the top of the list for your business.

Then why are so many mid-market companies changing their advertising or media agencies so frequently? Has the agency not put in the time to become a partner? Are they jamming your square peg business into their round hole business model? If they are, then it’s time they go.

They need to fully understand your product, service or industry, nearly as well as you do. If they don’t take the time to learn about your different markets, competitors and business conditions, then they will not improve your bottom line. And if that’s the case, then a regional business should be looking for a new agency.

Maybe the reason for change is strictly financial. A regional company may just be looking for a lower price. However, first be sure you understand the basis for the price difference. You may be giving up quality and skill for quantity and inexperience and that is rarely financially beneficial in the end.

And, always keep in mind that there are other costs not often considered. You’ll need to account for the cost associated in searching for a new agency, as well as the time spent and lost in building the new relationship. In the end, all this additional time and effort may actually cost you more. Especially, if you’re going through this change every few years. For perspective, just imagine how expensive getting married and divorced every two years would become.

The client – agency relationship is a business courtship. It will have its ups and downs but the working knowledge of each other and the relationship can take you both a long way. While everyone loves the shiny new object or the fact that all new brooms sweep clean, this theory may not be the answer that best serves your company.

Author: Frank Gussoni

President & Founder of A3 media. We're Type A. We transform media from an expense into a smart investment.