Agency-client relationships fall into one of three types. Which type of relationship do you seek, and which type do you prefer?
This is, unfortunately, the most typical kind of agency-client relationship. The client gives the orders, the agency executes them. The agency is an “agent” and does “work for hire”. This kind of relationship almost always leads to a dissatisfied, unmotivated agency team, where the client is roundly criticized for constantly dictating to the agency.
It surprises many agencies to learn that most clients actually don’t like this kind of relationship either. They see the agency as good “doers” but as weak thinkers who seldom take initiative and provide proactive marketing leadership and ideas.
This is the kind of relationship most agency professionals describe as their preferred way of working. With a higher trust factor than in the “Employer/Employee” relationship, the agency is able to diagnose and prescribe. The client values the agency as much for what it knows as what it does. The agency team usually derives much more professional satisfaction from this kind of relationship.
3. Business Partner/Business Partner
This is the highest order of agency-client relationships, but it’s extremely rare. It exists only among agencies that have adopted a true “shared risk, shared reward” approach to compensation. The characteristics of a partnership transcend an attitude. The actual definition of partnership is “A legal contract entered into by two or more persons in which each agrees to furnish a part of the capital and labor for a business enterprise, and by which each shares a fixed proportion of profits and losses.” Obviously, most agency-client relationships wouldn’t qualify.
If you want to be a partner with a client, the following three things must be in place:
Common goals. Partners seek the same results and benefit from the accomplishment of the same goals. Most notably, their economic interests are aligned. (Compare this to most agency-client relationships in which the client’s interest are in driving the agency’s income down, not up.)
Transparency. Partners share information openly and freely. All data and information related to the success of the partnership is open and available for examination. (Contrast this against traditional agency-client relationships, where the client often closely guards information about sales, profits, etc.)
Risk and reward. Partners invest time, energy, expertise, and/or money knowing that the potential for both gains and losses exists. (In commonplace agency-client relationships, there is sometimes and upside for the agency in the form of a “performance bonus” but almost never a downside).
Agencies must think carefully if they want a partnership with their clients. It’s a different business model than the agency industry is used to, but it can be remarkably rewarding and successful for the right kind of client.