Why your agencies cannot collaborate when they are competing for budget

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While a lot of marketers complain that their agencies will not collaborate, the core of the problem is the very compensation models, currently in place.
Think of your marketing budget as this pie.
From the agencies perspective, for them to be financially successful, they need to get a bigger and bigger slice of this pie.
Here is the media slice.
Plus a much smaller media agency fee.
Then the creative agency.
The digital agency.
Etcetera, etcetera, etcetera
But then the creative agency starts offering media or channel planning.
The media agency brings forward their digital content agency
And everyone is trying to steal everyone else’s slice of pie.
Or more insidious, the agency’s advice is based on getting a bigger slice of the pie.
Now wasn’t the reason for the marketing budget in the first place, to bake a bigger pie for the company?
Imagine if rather than having the agencies competing for their increased share of the pie, you reward them for helping to bake a bigger pie?
Rather than simply paying for the volume of what does in, you pay for success in the size of the outcome.
Makes sense. Doesn’t it?
This is the basis of Value Based Remuneration.
So if you want your agencies to collaborate in helping to bake a bigger pie, let us know.
We have the recipe.

TrinityP3 – Strategic Marketing Management Consultants

Published in: Business
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