“I know I need a reliable commuter car…but man, I want that Jaguar!”
Say that to any used car dealer and you’ll be driving off in the Jag. This is the fundamental struggle we humans face – balancing what we want with what we need. What we want is often what we don’t need, but that car dealer is going to put you in the Jag anyway because it’s more dollars and an easier sale. Wants are emotional, needs are rational: We all know who wins that battle.
And this is what’s wrong with the agency business. For too long, agencies have sold to people’s wants rather than their needs. I got my first glimpse of this many years ago after joining my first agency and sitting through a new business pitch. The “aha moment” came when the pitch leader played a Nightline clip featuring one of our clients. The one slight problem was…the client on Nightline made portable defibrillators (which were brand new at the time), and the prospective client made application development tools and was never getting on Nightline (shy of some sort of executive scandal).
I suspect the prospective client knew this at some level, but they saw that clip and said, “I want that!” and signed on the dotted line for a fat retainer. They drove off in the Jag instead of holding out for that sensible commuter car: a boring yet effective program focused on application development outlets. After paying for a predictably fruitless major-media campaign for several months, they terminated. They were sold what they didn’t need, which predictably became something they didn’t want.
The traditional agency model, which dates back to World War I, is built on selling clients what they want (or convincing them that what you’re selling is what they want). They want big splashy ads and high-priced media relations campaigns…but do they really need those things? Some companies do, but many more don’t. And most companies may need them at some point, but then they don’t need them a few months later due to changes in the business. But, the WWI model locks them into long-term retainers for a stove-piped set of services. And if you want another set of services, it’ll cost you more. And if you want to get out of it all together, you’re stuck for another quarter or more due to the contract’s exit clause. (Incidentally, any exit clause that’s more than 60 days is a sign the agency has no confidence in its ability to satisfy clients, but I digress.)
Few companies really need this model of doing business – but with a slick set of Nightline clips, agencies do a great job at making them want it. Today, we see agencies cling to this model, even though the world has changed considerably since World War I. Today’s economy is all about on-demand everything. People expect to be able to throttle services up and down based on their immediate needs – and yet many agencies are still selling those Nightline clips and sticking clients with long-term, static service modules that inevitably fall out of sync with client needs.
It will be interesting to see how agencies evolve in the next five years. I’ll venture a guess that those adapting to the on-demand world will do well, while the Nightline hucksters drive their Jags straight into I-don’t-wantville.