When should an agency be engaged for an event, and what should the decision be based on? Barclays’ Damion Breust examines the need for agencies from a corporate standpoint, as well as what agencies can do to prevent being short-changed by clients.
Agencies and corporates walk the event and brand experience tightrope together. Sometimes hand in hand and others, unsynchronised and unharmonious. Both parties aim for the event to be successful, yearn for congratulatory backslaps and of course, for the seeds the event has planted to bear fruit in the future. Corporates and agencies have a particular type of mating dance which is part performance, part skill and part attraction. Will the agency be right for corporate? Will the corporate respect the agency? Will the collaboration be a mutually beneficial one? Questions that even the most intuitive amongst us fail to prepare for.
Corporates attempt to see beyond the razzle dazzle of the agency spiel and promises, whilst agencies try to see beyond what the corporate appears to be asking for, ascertaining what they really want and are prepared to pay for. Agencies have perfected the art of the show, particularly when it comes to pitching for business. So where does a corporate begin the process of engaging an agency?
Firstly, a corporate needs to be clear on what their objectives are, and how the agency will be a proactive partner in achieving these. Secondly, work out key measurable objectives and a projected ROI (Return on Investment) before you engage an agency. Determine three key things that the event agency can bring which will add value to your brand experience. Thirdly, research the agency on the internet, engage with their website, ask colleagues or friends if they have any knowledge of their work and create a shortlist of five. The event agency’s website is really a window into how they work. Take the time to read through their case studies, view work from other offices around the region or globe and then request for an RFI (Request for Information) to ascertain what their core competencies are and how that fits with your brand values and goals for your event experience.
An RFI is the best starting point when deciding on which agency is best for you. It allows a corporate to delve beyond pretty logos and promises in order to form an initial and hopefully, realistic view of the agency. Be sure to ask who some of their clients are, as well as request the work they have completed for these clients over the past three years. (Sometimes it’s the case of a one hit wonder) In addition, request permission to personally speak to some of their clients as this can offer great insight.
What is also very useful is to find out which agencies are working with your competitors (or other similar sized corporations), as this helps determine whether the agency can manage the size and volume of your event(s). Remember, agencies are using your money and are responsible for co-creating your brand experience.
Why hire an agency?
There are many benefits and pitfalls in a corporate engaging an event agency to deliver its brand experience. Many believe that it is far more beneficial and cost-effective to employ an in-house team that understands the depth and breadth of a brand, and is therefore better equipped to create a better client experience. Others believe in outsourcing as it reduces the headcount, but management fees are always involved. Both models work and it’s a matter of what works best for you.
Agencies are an integral cog in the events wheel. By looking at what you are trying to achieve through their own specific lens, they can offer insight through their own processes. Then there are of course cost savings from suppliers, creative and logistical expertise garnered through working across industries and geography, management of event minutiae which can take days, weeks or months. Most importantly, an agency views your brand through an outsider’s eyes, allowing for fresh ideas and approaches.
Agencies can be expensive, so when it comes to agency fees, request for a transparent model from the beginning. A no-mark up policy with the right to see all invoices on request is now standard for many. In addition, ask to see their rate card for the various roles involved in creating the experience. Some agencies may be tempted to inflate the number of hours involved when a transparent model is adopted, hence it is up to the savvy corporate to ask for a weekly running total of hours from the agency so as to ascertain whether time (and money) has been wisely spent. A corporate needs to manage his agency, and not the other way round.
Choosing the right agency
While it’s a challenging task to engage an agency, it is equally, if not more challenging, for an agency to pitch, win and partner with a corporate.
From an event agency’s point of view, how do they compete in a very competitive market? What is their point of difference? And if they are a small agency, how do they compete with the big guns? We are all aware that the internet changed everything, opening up accessibility to products across the globe. An event agency could previously offer product information and best prices, but the focus today has evolved beyond this. Concerns about brand building and corporate messaging, employee alignment, diversity and inclusion, corporate social responsibility, digital and social media, customer engagement, and year-on-year increase in sales are some areas that agencies need to be adept in. The agency’s offering has to be more diverse, and yet specialised. The ‘traditional’ agency is a dying breed.
When we look at the size of agencies, there are essentially three types – the small (up to three staff), medium (10-30 staff) and then the large agencies, which are generally part of a large global conglomerate (in travel, events or media). Working with each of these has their benefits. Large agencies can naturally offer unparalleled benefits on price, global reach and a structured, detailed reporting system due to their size and buying power. Small agencies generally work with only one main corporate, thereby offering 100 per cent attention and service. Medium-sized agencies offer a crossover between offering a mix of specialised services and some buying power.
What can small to medium-sized event agencies do to remain competitive amongst industry Goliaths?
The answer is simple: focus on what you do best.
Don’t pitch for everything that comes through the door; instead, establish an area of expertise and excellence and become known for it. With each Request for Quotation, an agency needs to gather the team together and brainstorm. Does this piece of business fit our company values? Is this something that will lead to more business in the long term? Is this relationship worth investing in and fostering? Agencies should not be afraid and go back to the client with questions and aim to go beyond the tactical requirements of the pitch. In other words, they need to go beyond what the client is asking for.
Generally, corporates aim to provide an even playing field in the tender process, providing all the tactical information and requesting for the most creative responses within a given budget. The truth is that they are almost always looking to see which agency has taken the brief requirements and built an “out-of-the-box” brand experience in adherence to the brief.
For example, if the client has asked for a quote on a conference in Beijing or Seoul, why not add in a destination which you know will work better for their requirements? Do a thorough research and make sure that you know the last five destinations/venues the client has been to and used. Build strong relationships with your vendors to see how you can win the business together. What value add, exclusive to your event company, can you offer the client? Try to understand the client’s brand, what’s working for them, what’s not, and how your proposal can help to enhance the brand experience for the client.
Increasingly, some clients require the event agency to pay a pitch fee which is refundable if they are unsuccessful. Agencies need to question why they need to pay to pitch when clients approach five to 10 event agencies. The investment in hours of work alone is already payment in itself. One of the major issues associated with pitching is intellectual property. It’s not unusual for clients to ‘shop around’ for ideas during the pitch process, identify the ideas they like, award the most inexpensive agency the job, and then bring that idea to life. In reality, the idea is never properly developed or delivered, and both the client and the agency lose out. It’s the Frankenstein effect.
Most corporates negotiate hard on the agency fees, but at the end of the day, both parties need to make a profit. In the current market, agencies are asked to significantly reduce their management fees; however it is only a short-term win for the client as the event agency will struggle to meet the service standards, quality expectations and imposed deadlines.
To combat this, agencies have quite rightly started to charge by the hour (an advertising agency model), as the amount of hours, design and creativity required to deliver an event is never really paid for from an event agency’s point of view. Smaller ‘local’ agencies tend to undercut, but this is to the detriment of the event industry. Hence, agencies should focus on what differentiates them from their competitors, instead of simply reducing fees. This is really the best way for an agency to stay competitive, especially in markets like Singapore and Hong Kong – work out what you do best and stick to it.
An ideal relationship between a corporate client and an event agency should be symbiotic, mutually respectful and understanding. They do exist – we just need to see more of them.