What's motivating decision-makers to buy marketing services?

Rainmaker is a London-based consultancy which provides new business acquisition advice to marketing services companies across Europe and North America. They kindly invited us to one of their Intelligent New Business Seminars, and curious to see what they had to offer, Tamara and I went along. A little to our surprise, we got some really interesting information about the way key decision makers are viewing their marketing activities, and thanks to Rainmaker for allowing me to republish excerpts from their report.

The methodology: agencies across the UK were asked to nominate the questions they most wanted to pose to marketing decision-makers. A target group of 97 decision-makers (drawn from the top 250 most targeted brands on the INBG database) was approached with the shortlisted questions, and their answers analysed for the report. There were a few other sections to the survey, but to keep this reasonably short, I’ll just look at Budgets, Agency Selection and Social Media.


Budgets:
With the recession now a reality, it’s unsurprising that we want to know exactly how it’s likely to affect marketing spend moving forwards. The questions Rainmaker asked focused on whether budgets have decreased or not, and by how much, and whether the current economic situation was affecting how brands are allocating their budget.

The answer was (unsurprisingly) that 55% report budgets have decreased since the beginning of the year with 20% of those reporting a substantial decrease. Generally, budget have to be more focussed now – there’s little room for optional extras. However, it looks as though digital is the least affected of the marketing disciplines: 64% said they were spending more on digital marketing – partly because it’s seen as a very measurable way to spend money, and partly because many decision-makers are still evolving their use of digital communications.

From Rainmaker: “Demonstrating quantifiable ROI is clearly the key to securing new projects, although with more and more agencies claiming that their methods are the best for getting returns, decision-makers are struggling to distinguish, and more than one respondent has complained about the market place being confused with so many agencies fighting for their business. So if your message is also very ROI focused, make sure that it’s backed up irrefutably with how your approach works in practice.”

“Our budgets have decreased but not by much. We just have to be very vigilant to make sure we’re getting quantifiable ROI from the agencies we use.” Head of CRM, Financial Services

“Budgets have decreased quite sharply, but we’re actually spending more than before on digital, as it’s more cost effective.” Marketing Director, Retail

“Budgets are down by 25% but I reckon that next year all will back to what it was before the crisis” European Comms Mgr, Travel & Leisure

Agency Selection

Agency PR. Interestingly, the PR efforts of the services agencies was not felt to be as important as it had been last year: possibly because of work overload by the decision-makers. There’s so much information coming in, the PR efforts have to really be effective to be noticed. Rainmaker advise: “make sure that it’s not just shouting about new wins and big names – include thought leadership and interesting viewpoints as ways to reinforce your agency positioning.”

“I don’t think press is important when I’m selecting an agency to work with. I do read the various titles, but I don’t pay an awful lot of attention to the agencies.” Marketing Manager, Automotive

“PR is completely irrelevant to me as I just don’t have the time to read the trade mags.” Marketing & Communications Manager, Charity

Agency websites. In contrast, the company website is all-important – and shouldn’t contradict what your new business team are saying when they reach out. The topic of agency websites revealed a different picture, with 75% of respondents saying that it’s very important when making choices about which agency to use. Make sure that the messages you’re putting out in all other communications are backed up on your site. Host your PR, thought pieces and case studies on it.

“The website is my first point of call after a cold call; it’s really important for differentiating between the cowboys and the agencies that have a genuine reputation.” Customer Insight & Analysis Manager, Retail

“I always look at websites… If you’re a digital agency and your own website is rubbish, it doesn’t bode well. I look at their usability and design, as I’d really want any agency I work with to excel at these things.” Online Marketing Mgr,
Automotive

“The website has to back up what they’re saying on the phone. Often a sharp sales pitch is let down by a sloppy website or vice versa.” Online Marketing Manager, Travel Company

Agency approaches. The message here was that as the recession deepens, be very careful with your cold-calling. 71% of the respondents felt that agencies oversell to them, and that it has a negative effect on that agency’s chances. If you have to reach out, then Rainmaker has some pithy advice: most of this would seem pretty obvious, but it seems that a lot of Agencies are consistently getting it wrong:


Don’t be pushy; leave at least two months or more before you chase up; avoid lunchtime or late afternoon calls; don’t attach weighty files to your emails; and do your research. Tailor your approach to the company concerned. Learn about what they do and work out a genuine offering you can make them. DON’T oversell your services or claim to do things yourself that are in fact subcontracted. Be innovative, and appropriate in your approach – if you claim to be a social media specialist, why not get in touch with a prospective Client via Facebook or Twitter? Lastly - get their personal details right. Spelling their name wrong isn't going to help your case.

“Your first cold call should really be all about qualification, rather than aggressively selling.

• Be clear about your proposition
  
• Only target the most relevant companies
  
• Do your homework
  
• Don’t assume anything
  
• Ask questions!


• Be prepared to take a long term view of relationship building"

“Most people that approach me are polite, but often they’re quite clueless about the organisation and the decision-making pathways.” Marketing Comms Manager, Technology

“I want agencies to be straight with me about their strengths and areas of expertise. I hate it when they claim they can do a whole range of things but actually sub-contract a big chunk of the work.” Head of Brand Marketing, Apparel

“Lots of agencies get it wrong, but I’m impressed by the ones who follow up conversations efficiently and send nicely tailored emails. So many of them are really generic.” Marketing Director, Apparel

“Everyone from PR to design and sports marketing agencies approach me and every single one pisses me off because they all make the assumption that I’m looking for agency support. They’re all really unoriginal and all they do is talk about themselves. What I’m really looking for is someone who can show they understand my business.” Head of Marketing, Sports Retailer

Social Media

Well, as you'd expect, 88% said that social media has affected their marketing strategy. However, 29% of these are only monitoring the buzz around their brand. The vast majority said that social media was an important part of their marketing programme and an area that they are investing in.

As for ROI on social media, the majority (57%) said that they were happy with how their activity had been performing in terms of general brand building, rather than tangible ROI; the others weren't convinced, or said that it was too early to say that their activity was delivering returns for them.

“I think social media gives us a really good benchmark for measuring global awareness and opinion.” Online Marketing Manager, Motor Organisation

“Social media is really useful. It gives us a really valuable opportunity to talk to our customers and gives them a valuable avenue to talk back to us. I don’t think it has a direct influence on sales but I think it’s helped us to retain customers and increased their loyalty to the brand.” Marketing Manager, Gaming

“We do a lot with social media because it’s something people want to be seen to be doing – but I don’t fully buy into the strategy behind it and I’d be interested to see how it’s directly affecting sales…” Head of CRM, Retail

Conclusion: Rainmaker summarised as follows: overall spend is still in decline but perhaps we're reaching the bottom of the slump. Brands are responding in two ways:

• Placing more emphasis on value (not necessarily cost) - but are not all clear on how this can be measured.


• Reorganising what they are spending to areas that demonstrate clearer value
  

The opportunity for agencies is to prepare themselves for the upturn by taking a proactive stance to sales and marketing, but they must heed the tips above to make sure that cold calls don't turn to ice.

If you'd like to know more about the survey, or think you'd benefit from some tailored advice, do get in touch with Chris Gordon at Rainmaker. He's very nice.