Trust Is Failing Between Agencies and Clients. And Nobody's Winning

There’s a relationship elephant in the room. Apparently, agencies and marketers might be in need of counselling; trust — the cornerstone of brand-agency relationships and the key to speed and efficiency — is failing. Fast.

Last year, 30 of the leading 100 advertisers in the US changed agencies. While a certain churn is to be expected, 30% is a staggering number.

Maybe 2016 was just a “spring cleaning” of sorts? A coincidental year of change?

Comforting, but very unlikely. Marketers came in 2016 anticipating a 42% increase in project work billed separately from retainers. Meanwhile, the number of agencies brands are working with is seemingly increasing. Could it be their way of challenging their agencies to fully prove their value? Or is it that marketers feel that no agency can realistically be a world-class expert in every service they need?

In all cases, it strongly hints at a general apprehension clients have regarding their agencies’ ability to carry all their business objectives while generating stellar results.

The slightly uncomfortable chair collection by Sid Lee Collective

There’s no denying it: there is a Trust deficit between Brands and agencies

According to a Forrester/SoDA report, the client/agency dynamic has hit a roadblock, with the number of agencies reporting relationship improvements falling from 70% to 53% in only one year.

Many reasons can explain lower levels of trust between clients and agencies. But this one can explain most of the problem: In a time where both agencies’ and clients’ business models are being challenged, both parties aren’t always aligned on how to react to these challenges.

And that can be a major hindrance.

To take on today’s world, to challenge status quo, to try something new and take bigger risks, you need to have complete trust in your partners and the direction where they want to take you. Less trust means more time and energy spent second-guessing or trying to understand the real intent of your partners. In a world of real-time / moment marketing, that’s a lot of missed opportunities.

As Organisational Trust Expert Stephen M.R. Colvey puts it in his bestseller The Speed of Trust: “Distrust is costly to businesses, like a burdensome surtax, while trust is universally necessary and productive.”

The benefit of trust is clear. By efficiently focusing your efforts and resources on creating and doing what’s beneficial for the brand, rather than going back and forth on details and orientations, you gain a huge head start and amplify your potential ROI.

Trust is not about money, it’s about value

For those wondering if fees can dampen the quality of the relationship: Only 13% of clients said they terminated their business relationship with an agency due to cost overruns, while 37% mentioned “lack of value” as the main reason. Roughly put, trust is not affected by “how much I pay” more than “how much I get in return”. And it makes sense, seeing as the top 3 reasons for clients to work with an agency are: Strategic Leadership, Marketing Creativity, and Customer-Centric Marketing.

In any case, if clients don’t have bulletproof trust in their agencies, no matter how much or how little they pay, there’s no way they’ll completely see the value the agencies are bringing to the table. Talk about a lose-lose situation.

François Lacoursière (far left), Executive Vice-President, Global Head Business Relations, Senior Partner at Sid Lee

The 4 step action plan to build, monitor and enhance trust

Agencies and marketers usually do a good job of managing what is quantifiable (budget, hours, campaign results, ROI, etc.) but commonly overlook the most important aspect of a relationship: qualifying, in a thorough fashion, the level of trust between the parties.

An expert on the subject, François Lacoursière is clear on the first step that agencies and marketers who wish to improve their relationships should take: “They need to understand that trust is something that must be formally managed by both parties. By formally managed, I mean that the relationship must not be left at the ‘impression’ stage, something that is only felt or is intuitive.”

“Trust is something that you have or don’t. Impressions should only be considered as an intangible signal to help determine, at a very high level, if things seem to be working or not. You’ll need much more concrete data to take enlightened, optimal action.”

As Sid Lee’s Executive VP, Global Head Business Relations and Senior Partner, Lacoursière has managed teams and worked with clients all around the world, from small businesses to global powerhouses. Regardless of where he is, and who he works with, his straightforward 4-step approach yields tangible results when it comes to measuring and improving the level of trust with his clients.

Here’s how it goes:

1 - Define how a relationship can go south and label it, clearly stating what the potential issues could be. Here’s a list of labels that you can use to get started:

- Misaligned vision

- Wrong set-up

- Tired and repetitive relationship

- Negative project mentality

- Communication breakdown

- Turn-over

- Systematic cost overrun discussions

2 - Detail each label (definition, implications, signs used as metrics of trust failure) and preemptively devise plans of action to correct an aspect that is not satisfactory. Put it on paper like you do for deliverables, budgets, or legal and financial issues.

3 - Assign a rating system for each aspect you listed at step 2. Here’s an example:

- Complete trust

- Things are OK

- Down, but not out

- On the edge

- Breaking point

4 - Assign, on each end, a “Relationship Guardian” tasked with maintaining high trust and conducting trust reviews.

Trust review meetings must be conducted at fixed times. They can be quarterly, twice a year, or yearly, but keep in mind that the longer you wait between each meeting, the longer you can unnecessarily drag out problems that could have been easily fixed if caught early.

The good news is that even if there is an issue in a relationship, lost trust can be earned back and even rebuilt stronger if both parties are aligned regarding objectives and intents.

Key take-aways

- Trust between agencies and clients is failing.

- A plethora of new challenges weigh down on a CMO’s shoulders, increasing the need for fast-paced, high-return innovative actions.

- These actions can only be taken if there is sufficient trust between agencies and clients.

- Trust creates speed and efficiency, while distrust is a “burdensome tax”.

- Trust must be formally measured and managed by both parties.

- Create a trust review system, based on facts rather than impressions.

- Assign Relationship Spotters on each side, tasked with conducting trust reviews in a planned and recurrent fashion.