Episode 322

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Understanding how clients view the agency relationship is key to making the most of that partnership. Every year since 2014, AMI and Audience Audit have brought you The Agency Edge Research Series to hopefully give helpful insights into what clients and prospects are looking for when working with agencies. The 2020 research correctly indicated that 2021 was going to be very robust for agency business. This year’s study was built to better understand the thinking behind this growth on the client side, in particular how this explosion in engagement affected how they thought about their agency relationships.

The Agency Edge Research Series is a collaboration between AMI, Audience Audit, and Dynata. Where other studies focus on industries or the size of client companies, we were interested in how these clients were feeling about a handful of topics. Audience Audit’s Susan Baier is here to give an overview of the 2021 findings.

In this episode of Build a Better Agency, Susan and I explain the methodologies used in creating the Agency Edge Research Series. We give an overview of the three client segments that revealed themselves, explain how an agency can diagnose clients and prospects in order to best serve what they are looking for. In the show notes below you will find a link to the 17-page executive summary and we hope this information will help you make the most of your client relationships.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

Agency Edge Research Series

What You Will Learn in This Episode:

  • The methodologies used in the Agency Edge Research Series
  • The insight that revealed itself for the first time this year
  • The focus of this year’s study
  • How the three segments of this study are defined: Committed, Concerned, and Close
  • How agencies can diagnose clients and prospects to know what segment they are in
  • Ways to work best with each segment
  • How agencies can manipulate the data for their own needs
“The Agency Edge Research Series has developed a really strong body of insight around agency clients in general.” @susanbaier Click To Tweet “We have found it most helpful to really understand what kinds of attitudes and assumptions are behind the decisions that people are making.” @susanbaier Click To Tweet “The theme running through all the segments of this study is the search for expertise in a marketing agency.” @susanbaier Click To Tweet “We have seen the impact in research where people say, ‘I am more likely to investigate a firm that is a known expert. I am more likely to stay longer with them, and I am more likely to refer them to somebody else.” @susanbaier Click To Tweet “It’s important to recognize that just because a client has big ideas doesn’t necessarily mean they have a big budget right now.” @susanbaier Click To Tweet

Ways to Contact Susan Baier:

Additional Resources:

Speaker 1:

It doesn’t matter what kind of an agency you run; traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build A Better Agency Podcast presented by White Label IQ will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want, down the road, sellable. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Drew McLellan here with another episode of Build A Better Agency, thanks for coming back. Glad to have you with me. Some guests are just perennial favorites and one of my guests that people are always excited to see is back is my good friend and research extraordinaire, Susan Baier. As you know, Susan and I, Agency Management Institute and her company, Audience Audit, have partnered since 2014 to put together the Agency Edge Research Series, where every year we go out into the field, we talk to people who hire agencies, just like you, and we dig into something very specific that we want to know about that’s very timely.

Susan is back with us today to talk about the 2021 Agency Edge Research Series piece and what we learned. It was a lot of fascinating stuff. I want to get into it pretty quickly. But before I do that, of course, you know, I have stuff to tell you.

A couple of things, one, I’m sorry to tell you that the Mercer Island Group sell with Strategic Insights is completely sold out. We can’t take more folks. If that was something that you had wanted to do and you were waiting to register, I apologize, but we are sold out. We’ll do it again, I’m not sure when, maybe this summer, certainly, probably next winter again. We try and do that at least once a year. As soon as I know the dates, after I talk to Robin and Steven Lindsay, I will let you know, but we are sold out.

Speaking of selling out, The Build A Better Agency Summit is coming up in May. As you know, we held our first event in August of 2021. It turned out great. We sold out. Everybody had a great time. Tons of learning, tons of connections, lots of hugging, all good things. So, we decided to do it again. May 24th and 25th in Chicago is when the 2022 version of the Build A Better Agency Summit is going to be there.

We listened to our attendees, they wanted more round tables, they wanted more breakouts, they wanted more time to connect with each other. So, we’ve rejiggered the schedule to make sure all of that happens. If you’re an AMI member, remember that on Monday the 23rd, that’s AMI Family Day. If you’re a gold member or above, so gold platinum or a virtual peer group or live peer group member, you are welcome to attend that half day session and then go out to dinner with us.

We’re already a little over a third sold out. Please, please, please don’t let what happened with the Mercer Island Group Workshop happen with the summit. Grab your ticket, join us, and that way you don’t have to worry about the price going up or us selling out. A great 2021 deduction, I hope you will think that, but we would love to have you with us in May of 2022.

Head over to agencymanagementinstitute.com in the upper left corner of the nav bar, you’ll see BABA Summit. All you got to do is click on that and you can buy your ticket and register. Would love to have you. All right, without further ado, Susan, and I want to jump right into the research. So, let’s do that. All right, Susan, welcome back to the show. It feels like we always have something to talk about.

Susan Baier:

I think we always do have something to talk about. Just occasionally, it’s interesting enough for it to be on your podcast.

Drew McLellan:

That’s exactly right. Then we hit the record button. The rest of the time, people just don’t even need to know. As I said in my intro, this is what, seven or eight years into our Agency Edge Research Series. As always, for the last couple of years, we unveiled the findings at Content Marketing World this fall and wanted to get onto the podcast and share it with everybody who couldn’t be with us either at the event or at the webinar we did.

Why don’t you talk a little bit about, just for anybody who’s jumping into the podcast and has not heard us talk about past studies, talk a little bit about the methodology that we use in our studies and why that matters?

Susan Baier:

Sure. Back in 2014, when we did our first study, we really decided that we wanted to offer a different way to look at agency clients than we were seeing out there in the wild a lot. We saw a lot of research that was based on industry people were in, or how big their organizations were. We really wanted to focus on how agency clients in particular were feeling about various things that we wanted to ask them about. Originally, their agency relationships.

We’ve dipped our toe in a little bit of agency side research with the employees, but really our work is focused on trying to understand how agency clients are viewing the landscape that they’re dealing with and how agencies play a part in their minds in solving the challenges that they’re having. This year was no different.

Drew McLellan:

Just for the listeners, what you and I did is we talk about, what are some of the things agency owners are facing right now? What are some of the things that agencies are bumping up against with their clients? What are some of the things that they’re wondering about?

We’ve asked things like, how and why do you fire agencies, and how do you find agencies? One of my favorite studies that we did was what do you expect from your account executives, and how do you decide if someone’s good at that?

We always identify a focus area and then talk to people who hire agencies, who have relationships with agencies of varying sizes, and we’ll get into that in a second, and pick their brain about their relationship with their agencies, but usually pretty narrow cast in this area of whatever we’re focusing on.

Susan Baier:

Yeah. I think it’s interesting, because I think it is eight years now or something, I don’t have to count them up, but we’ve developed a really strong, I think, body of insight around agency clients in general. One of the things we’ve seen is findings that track over time, that are consistent, regardless of what specific topic we’re asking about. Then, there’s always something new because of what’s happening in the industry, what’s happening in the economy. I just love that.

I see things that resonate in our studies now from back when we started looking at this in 2014, and it’s interesting to see those. We never do the same study twice, but at the same time, there are a lot of threads running through all those years of research.

Drew McLellan:

Yep. I agree. For example, one of the ones that we’ve talked about for years is that most clients only have one agency relationship. They typically are dating several agencies. To be able to thread that through multiple studies and different focus points, I think is one of the interesting things now about the series as opposed to any specific one study.

Susan Baier:

Yeah. We see so much consistency over the years about what clients really want from their agencies. We see things pop up and down, but things like listening to us, understanding our business, those things are just consistent, year after year after year. I think you can dive in into our research at any given time during that sort of sequence, and see things that are really going to resonate before and after, even though we do, as we did in this year’s study, we start to see some changes now and then based on things that are going on.

Drew McLellan:

A little bit of a teaser, which we’ll get into later, but there was an interesting twist, I think, in this study that both of you and I said, okay, we’ve never heard or seen that before.

Susan Baier:

Never seen that. No.

Drew McLellan:

We’ll talk about that in a little bit. Again, it’s not just the consistency of responses, but it is the ability to compare, I think, that makes it interesting.

Susan Baier:

Yep. I think that’s great. I loved the outsourcing study we did on how they think about outsourcing, and what they choose to outsource. I think the study we did last year at the height of the COVID pandemic was really interesting, and this year’s study is interesting again, because I don’t know about you, but I expected… We went into this talking about how agencies are operating in an economic boom.

While we see that, I think we also uncovered some things that neither you and I probably expected to see that agency clients are dealing with. I just love that, it’s like Christmas every year, we just get to open up a whole new box and see what’s in it.

Drew McLellan:

Well, I think one of the things that I like about our study and then we’ll get into the specifics of the study, but I think it’s easy, without a doubt, for everybody, to make some assumptions about where their partners are in.

I think from an agency perspective, it’s easy for us to make assumptions about what our clients are thinking and doing, and the fact that the economy is good and that a lot of our clients are doing well. We make some assumptions about that surface reality, and we don’t see what’s underneath. I think what this study really revealed was that there’s a lot more brewing underneath than perhaps we were acknowledging, and that we could have really… What I love about this particular study is, it reveals some landmines that a lot of agencies would’ve walked right into without having this data.

Susan Baier:

Yes. The feedback we get year after year on whatever study we’ve released most recently is always along the lines of, wow, this really flew in the face of my expectations or what I thought was true. We all have assumptions, and I love the fact that we test so many of them and are able to maybe show a different perspective on the things that we all take for granted about who are the best clients for us? What are the big guys who are spending a lot of money like, versus the little guys like?

It’s just fascinating to me year after year, how many of our audience brings that back to us when we present this at conferences or our webinars, or they email you or I with questions about it. It’s always like, whoa, whoa, whoa, hold on, that is really different than I thought the landscape looked like.

Drew McLellan:

Right. Or the way you described this kind of client is that’s the one I want. I don’t want these parts of that. It’s like any other relationship, you don’t get to cherry pick only the good parts.

Susan Baier:

Right. You always say, there’s no bad client, there just may be a not right client for your agency.

Drew McLellan:

Absolutely. Let’s tell the listeners this, on both Susan’s website and the AMI website, you can download the executive summaries of all of the research from 2014 on. Feel free to have at it and download all of them. Again, you’ll start to see the patterns as well. Before we start talking about the 2021 study, I just want to tell you that, on both websites, the full suite of the research studies are there for your taking.

All right, let’s talk a little bit about the 2021 study. First of all, the kind of research you do is a little different, I think, than how some people think about research, in terms of the segmentation. Can you just explain the methodology and then let’s talk about what we went in asking and what we discovered?

Susan Baier:

Yep. Lots of folks and certainly, lots of your listeners are going to have heard about segmentation of some kind or another. It’s basically putting people into groups. In our studies, this year, we had 1,250 agency clients from around the country participate in this study.

You can look at those clients by how big they are, what their budgets are, where they’re located, what kind of industry that they’re in. But we have found it much more helpful to really understand what kinds of attitudes and assumptions are behind the decisions that people are making. Even more than just decision making, how they view the world around them.

We get to that information by, we build a custom online service. We put anywhere from 35 to 40 statements in there that everybody in the study has to agree with or disagree with, along a scale. They can strongly agree, strongly disagree, something in the middle. When we take just that data and analyze it, what we find is, groups of people who are connected to each other, because they hold a set of attitudes in common. That makes that group look very different from another group that has a different set of attitudes that they link together.

We organically bubble up groups of people among these respondents that really feel differently about things, whatever topic it is we’re asking about at the time. That’s a segmentation, that’s a lens that I find as an agency owner gives me much more helpful insight into which clients may be best for a particular agency, how to approach them, the kinds of things that they’re struggling with-

Drew McLellan:

One, how to interpret what they’re saying and doing, you can see what’s underneath, because it’s based on attitudes and motivations, not data sets, not demographics.

Susan Baier:

Not demographics, or how big their business is. Now, we collect all that stuff. Sometimes we see things, as there was a little bit of that in this study, where clients of a certain size may be a little more likely to have a certain set of attitudes. But a lot of times we don’t see those differences. This is the only way to really differentiate what’s going on with agency clients in a much more effective way than saying, how big are you, and what’s your budget?

Drew McLellan:

We should probably say one of the reasons why we have such a large respondent pool is because we have another partner in this research.

Susan Baier:

Yes, Dynata, which is one of the biggest panel providers in the country and the world, in fact, and they’ve been our partner for many years, giving us access to these agency clients for research. We’re very grateful to their support year after year. Yeah. We couldn’t do it without them.

Drew McLellan:

All right. Let’s talk about the study. Tee up for the audience what are our overarching, I wonder was, as we went into this study, and then we can talk about the three segments that we discovered.

Susan Baier:

Right. This study is coming on the heels of the one we did at the height of COVID. What we really wanted to… As we started planning this study, we saw economic signals that were suggesting that 2021 was going to be a very robust year for the agency business. A lot of organization we’re starting to reinvest again, a lot of the agencies you work with, that I work with, were saying, holy moly, lots of business coming in, all of this kind of stuff.

Drew McLellan:

Which I just want to pause and say is exactly what’s happening. We’re recording this in late November of 2021, and agencies are literally saying, I can’t respond to all of the new business inquiries that we’re getting because, A, we’re getting so many and B, I can’t staff for them. It is a harvest robust season for biz dev. We just have problems actually doing the work because people are struggling to find people. Our premonition of that fact that this was going to be a good biz dev year for agencies and that agencies were going to have lots of opportunity was accurate.

Susan Baier:

Yes. What we really wanted to explore was, what was behind that, on the client side of the house? What was happening with clients? What were they doing more of? Why were they doing more of that? Specifically, how did this explosion in interest and engagement among clients, how was that affecting how they thought about their agency relationships? Because we’d seen the opposite when things were really deep and dark, holy… We knew that it affected-

Drew McLellan:

Is that a technical agency term?

Susan Baier:

It’s a scientific term-

Drew McLellan:

Deep and dark holy.

Susan Baier:

Deep and dark holy. Yeah. Have you not heard that? You’re a little out of the loop.

Drew McLellan:

I’m going to write that down.

Susan Baier:

Okay. That’s good.

Drew McLellan:

I don’t want to look silly by not using that on a regular basis.

Susan Baier:

But we knew that, that affected how they saw agencies, and how they wanted agencies to tap in and where they just didn’t feel. We were like, okay, well, if this is happening, what does that start to look like? That was really the focus of this study, this, how are clients dealing with what’s driving, what’s coming to agencies right now? Which is a lot more marketing work.

We saw a lot during the pandemic, in terms of moving into virtual things, conferences went away. A lot of the things that agency clients had relied on for business had evaporated. What impact was that having on things, as now, things were starting to get churning again.

Drew McLellan:

We went out, we talked to a bunch of people, and again, we’ll talk sizes and all that. But these are people who are actively working with agencies today. What we found were three very distinct and very different segments. The first segment we called committed.

Susan Baier:

Right.

Drew McLellan:

The committed segment, this was about 25% of the respondents, and these are folks who are saying to us, marketing is a big priority for me, and we are actually thinking about doing things we haven’t even done before. We’re thinking bigger and broader, and agencies are critical for us, in terms of our success. We really believe in agency partnerships, we believe in spending good money with our agencies. We really value our agency partners.

Susan Baier:

Yes, absolutely. These folks really see those agencies as a core cog in this process. Part of that is coming from their belief that agencies make things less complicated for them, from a marketing standpoint. They believe that agencies have a tremendous depth of expertise that they don’t have themselves and can’t get anywhere else.

Drew McLellan:

That’s the kind of agency they want. This is a group that said, we really want specialists. We want people who don’t service the butcher, baker and candles stick maker. I want a specialist agency who has a depth of expertise in specifically what I need. Whether that’s my industry or the deliverable or whatever it is. This segment is like, I will pay more for that.

Susan Baier:

I will pay more. These folks believe that good agencies are worth the cost, and they’re willing to pay more for agencies that are really specialized in terms of what they’re trying to do, in terms of their industry or in terms of some approach or whatever. Very closely held, and interestingly, and we’ll talk more about this group as we go through, but one of the things that I found fascinating about this group was when we ask about the tactics that clients are working on right now, this group consistently was more likely to cite a whole bunch of stuff. They’re just not blowing smoke. They really are diving in and exploring and engaging in a wide breadth of things. No wonder they value that agency support, because they have a lot going on.

Drew McLellan:

Yeah, absolutely. The second group, the largest group… When I think back, I’m not sure we’ve had a group this large in all of the studies. 42%-

Susan Baier:

Yeah, that’s a really big-

Drew McLellan:

… of the respondents, we labeled as concern.

Susan Baier:

Yes.

Drew McLellan:

These folks, they’re struggling.

Susan Baier:

Yeah, they’re struggling, but they’re not the same as the group we saw struggling when we did the COVID era research, the height of COVID. These are different kinds of struggles. But they are having a hard time. Now, it’s worth noting, Drew, that everybody in the study was like, this is going to be a good year for us. But these-

Drew McLellan:

Which, by the way, as you might imagine, is not the tenor of last year’s study, in the height of COVID, where people were petrified.

Susan Baier:

Yeah. Everybody knew it wasn’t just going to be a few months anymore. It was a real big problem. These folks know that the opportunity is there for them, but, man, they’re having trouble with a lot of things. First of all, they say it’s harder to find new customers than it used to be. Some of that may be a function of the mechanisms that they used to find. New customers are no longer super prevalent, like in-person conferences and trade shows and some of those kinds of things that they may have been doing.

Drew McLellan:

Well, you know what, we’re seeing that, I’m seeing that with agencies too. Agencies who did a lot of prospecting at trade shows and live events are also struggling to figure out how do I get to my prospect if I can’t get to them in the normal way?

Susan Baier:

As you cited earlier, just like the agencies, these folks say finding qualified marketing employees is also harder than ever. They’re really struggling with the labor thing, just availability-

Drew McLellan:

Yeah. Just like agencies. Yep.

Susan Baier:

But then they have this trio of concerns and they really are different than everybody else. The first is that economic conditions are going to create significant challenges for them. That can be supply chain issues, that can be cost of goods issues. There’s a lot of economic stuff going on that they’re really worried about. Secondly, they’re worried about shifts in consumer behavior.

If you have been reliant on foot traffic for brick and mortar retail, if you have really been able to skate by without having much of an evident vision, mission kind of thing for your organization, and now consumers want more of that. Maybe you have a problem. That whole consumer behavior thing is bothering them. Then the third thing is shifts in employee expectations. This isn’t just, can I get people? This is, what do my current employees and prospects expect me to provide, and that is worrisome to them.

It’s just a whole raft of stuff. But it’s interesting to see a group that is really, in the midst of all of this, and despite thinking it can be a good year, really mired in some challenges that they don’t appear to know how to solve or at least think will be really difficult for them to tackle.

Drew McLellan:

Agai