It’s that time of year when clients start preparing their cases for the new year’s budget process. On the other side of the fence consultancies are looking at overheads, forecasts, margins and where new business is coming from.
Marketing directors and brand directors will not be increasing budgets back to 2008 levels, that’s for sure. But they will have creative activity and possibly slightly increased budgets, though most will be maintaining 2009 budgets.
Too many clients are becoming anxious that this stagnant marketing approach is, in fact, losing market share to competitors and that consumers’ new buying patterns will remain, even if the economy picks up. So inactivity is starting to become an issue in some markets, especially retail.
So how can clients and consultancies survive and progress? Only by dialogue, by honesty and with a mutual understanding of each other’s needs and objectives. I know of one client which is actively supporting its rostered groups by being unflinchingly loyal to them and supporting them through tough times.
But, in general, if clients trust their consultancy they should be talking to them now, giving the next three, six, nine and even 12 months activity and required involvement by that consultancy.
Working together may help the client to spread costs and identify and realise savings, which in turn can fund further projects. For the consultancy this gives some reassurance, because retaining the client is a battle in these times, especially when potential competitors are banging on the client’s door with offers of better value.
This open approach can only be achieved by like-minded partners working together.
From a client perspective, marketing or commercial departments should look at all their activity from research to advertising, PR, digital and marketing, and evaluate where savings can be achieved and where that new-found funding would be better spent.
Design groups can help by looking at the way they manage their clients’ projects. This is especially relevant when looking at external costs – bought in costs such as photography, illustration, production and print. It is also worth considering if the mark-up is excessive.
Every fee is negotiable. Even photographers and stylists will reconsider fees against a further work commitment. But there again, there must be a basic honesty and mutuality
Then look at internal costs. Is each four-hour meeting necessary, for example, and do all delegates have to attend? Is that flight really worthwhile and who really needs to go?
All projects must be measured against overheads. Effective project planning is essential to ensure each project runs smoothly, doesn’t overrun or impact adversely on the consultancy’s other projects. Accurate resource timing is crucial and each member of the team needs to know and understand their involvement. In most cases, this thinking should be shared with the client as they too have a responsibility for the effective running of their project.
Keep financial management at the forefront of all projects and keep ‘surprises’ to a minimum. If there are extra requirements make sure the client understands the extra cost implications on the project and budget. These may all be small amounts, but it can be the difference between keeping a client or losing them.
Also I think clients appreciate design groups that understand the realities of doing business in this depressing climate. It’s not the time to be ostentatious.
But clients also have a responsibility to the design group involved. Prompt payment is vital, cash-flow problems can and do starve any consultancy. Clients need to check invoices are being paid on time and not being shifted from signatory to signatory – someone in the finance department may think they are being clever by ‘sitting’ on the invoice.
Another way for clients to use their sparse funds more viably is not to ask for free-pitches. This has proved to be wasteful of resources and finance, but the unenlightened still think this produces free ideas. What this produces in reality is pretty pictures, not design solutions.
If large fees are involved, it may suit both parties to break them down into manageable chunks. If agreed, payment terms must be adhered to.
Clients can also help by recommending consultancies to other departments within their company. The market will pick up, but it’s not just consumers who may continue with new buying patterns, so we all have to work smarter, be realistic – and accountable.
- The client-consultancy relationship must be honest
- Clients should be planning ahead now with their consultancy
- Look at how your group handles client projects – every fee is negotiable
- Don’t let clients ‘sit’ on your invoices
- Encourage clients to recommend your services within their company
- Be realistic/ the market has changed, possibly forever