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marketing management consultants
Tight Briefs�Focused Scopes�
and Value Creation
Mark Bowling TrinityP3
October 2015 For WFA Procurement Meeting, Singapore
marketing management consultants
Are your conversations about fees like this?
https://www.youtube.com/watch?v=KLirjATEZBI
marketing management consultants
Local, Regional And Global
TrinityP3 works across Asia-Pacific including Australia, China and SE Asia with offices in Sydney, Melbourne, Hong Kong and Singapore and globally through our membership in the Marketing FIRST Forum (M1F). M1F is a global collective of like minded marketing professionals providing global expertise and local knowledge to assist marketers achieve maximum marketing potential and value. TrinityP3 and M1F are aligned to provide globally consistent services, tools and processes but with local market knowledge. The M1F structure often mirrors our clients own business unit structures. Thus, as a united team we work efficiently and effectively to the benefit of our clients.
View more information on M1F at http://www.m1f.org
marketing management consultants
Our Scope of Work
Marketing Performance Services: 1. Marketing business
alignment. 2. Budget KPI and ROI
setting. 3. Marketing structure
process review. 4. Marketing planning
process review. 5. Sustainable marketing
assessment. 6. Relationship
performance evaluation.
Agency Performance Services: 1. Strategic supplier alignment/
Relationship management. 2. Supplier search. 3. Agency selection / Pitch. 4. Media buying benchmarking. 5. Agency assessment
modelling. 6. Contract reviews. 7. Contract negotiations. 8. Scope of work management. 9. Rate card review
(Ad Cost Checker).
Delivery & Implementation Performance Services: 1. Engagement agreements. 2. Relationship performance
evaluation. 3. Production management
assessment. 4. Production transition
management. 5. Sustainability assessment. 6. Results report assessment. 7. Media performance
assessment.
View our full scope of services at http://www.trinityp3.com/services/
TrinityP3 has more than 15 years experience and expertise in providing specific services to achieve maximum marketing potential. These services are provided to our clients on both a project basis and as part of a more expansive optimisation process.
marketing management consultants
Scope Fulfillment
• Checklist all the things you are paying for
• Are you getting everything?
marketing management consultants
Diligence in Delivery
• Checklist ongoing • Procurement liase with Marketing on
delivery • Helps assess quality and value of the
Scope deliverables
Deliverable Delivered?
Quality
1 2 3 4 5
Weekly Reporting
Monthly Newsletter
Daily Campaign Optimisation Summary
Quarterly Competitive Review
Quarterly Business Review
Half-Year CEO Check in
marketing management consultants
Comfort Zones are Dangerous
marketing management consultants
Scope Review
• Checklist all the things you need for the business
• Do you need to change your SOW?
marketing management consultants
Tight Briefs and Detailed SOWs Save Money
• Out of Scope work can be up to 180% of the cost of In-Scope work
• If 40% of your agency work is Out of Scope, then your agency fees could be 22% over budget
WORK COST
Out of Scope
In Scope
marketing management consultants
How do you know how much to pay?
https://www.youtube.com/watch?v=oZofzH468NA
marketing management consultants
Remuneration Models
• Most common remuneration models: • Commission & Service Fees • Resource Package Fees (Retainer) • Variable fees based on actual hours • Project Fees • Hybrids
• Latest Trends: • Move from cost to value based • Return of the commission • Incentive based models
marketing management consultants
Performance or Incentive
• Benefits: • Improved agency performance. • Improved advertiser performance. • Goal alignment and congruence.
• Types: • Bonus - additional to the agreed profit margin. • Cost recovery - represents all profit. • Shared risk and reward - agency puts % of margin at risk
and advertiser meets that % in pool. • Earn back - agency puts % of margin at risk to be paid in
results.
marketing management consultants
Performance Criteria
• Business Performance (Hard) • E.g. sales, traffic, profit, market share, volume growth,
etc. These can be measured by the same criteria that the advertiser uses for their internal bonus systems.
• Advertising Performance (Medium) • EG: product awareness, ad awareness measures,
consumer measures, attitude ratings, persuasion, purchase intent, awards, brand equity, image, effectiveness awards, etc.
• Agency Performance (Soft) • Relates to the evaluation of agency functional areas:
account services, creative and media in terms of: performance, service, relationship, cost efficiencies, etc
marketing management consultants
Moving from Input/Costs to Outcome/Value
• Most of the existing models are input / cost based that reward volume of work and not effectiveness.
• The current best practice is to move to an output based / pricing model that fixes the value based on output.
• The leading trend is for a value based remuneration model where the reward is based on the value created or contributed.
• Therefore the global remuneration trend is summarized by:
marketing management consultants
Inputs vs Outputs vs Outcomes
marketing management consultants
5 Challenges of Performance Payments
1. Agencies are hesitant to link compensation to performance
2. The performance criteria prove difficult to agree on
3. The scope of the incentive is too narrow 4. It proves difficult to budget the payment 5. Disputes over the payment of the
incentive
marketing management consultants
Common Mistakes
• Negotiating one variable, such as the overhead and profit multiple and miss the other variables
• Using average cost per FTE (divide the total cost by the number of FTEs)
• Not agreeing total or maximum billable hours
marketing management consultants
Ongoing Hygiene Problems
• Accounting for total man hours
marketing management consultants
How many working hours in a year?
Salary $100,000 $100,000 $100,000 Billable Hours 1540 1650 1840
Multiple 2.4 2.4 2.4 Hourly Rate $156 $145 $130
marketing management consultants
Ongoing Hygiene Problems
• Accounting for total man hours
• Assessing Team Dynamic and Relationship
marketing management consultants
Understanding Valuable Relationships
marketing management consultants
Tapping into the best talent
• Demand Agency Org Charts – are you aware of the size and structure of the agency
• Are Management part of ‘Overhead’? Are heads of capabilities actively involved in your business? What proportion of their time are you getting?
• Track award winning business from your agency – why are your team not winning? Is another client getting a ‘better’ team? If so, why?
marketing management consultants
Ongoing Hygiene Problems
• Accounting for total man hours
• Assessing Team Dynamic and Relationship
• Reviewing Capabilities and Agency Product
marketing management consultants
Assessing Agency Capabilities
• Don’t underestimate the value of a capabilities review with your roster agencies
• Agencies usually only provide to clients what they are requested and do not have time to update you on their progress in other areas
• Calibr8or is launching to help assess agency capabilities and performance
marketing management consultants
Benchmarking Agency Rates
• Agency costs are difficult to break down
• No standard costs are followed and limited resources to assess where your stand
• Benchmarking is one simple solution
marketing management consultants
Accessible to Clients and Agencies
marketing management consultants
Are you compensating for DAMAGES?
https://www.youtube.com/watch?v=AUaA78Ch5rs
marketing management consultants
marketing management consultants
For more information contact:
TrinityP3 Pty Ltd Sydney
+612 9964 9900 Melbourne
+613 9682 6800 Hong Kong
+852 3478 3982 Singapore
+65 6631 2861
[email protected] www.trinityp3.com
Trinityp3.com/blog/ @TrinityP3 TrinityP3 TrinityP3.StrategicMarketingConsultants