Agencies Brand Strategy

Is it an agency’s responsibility to tell failing clients, ‘It’s not us, it’s you’?

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By Richard Draycott, Associate editor

September 26, 2024 | 19 min read

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In this week’s installment of Agency Advice, we turn our attention to business failures and ask what role agencies should play in bringing potential product, service or business model problems to their client’s attention before it’s too late.

Agencies need to have those tricky conversations with clients

With so many big brands going to the wall recently (think The Body Shop, Tupperware, Ted Baker, TGI Fridays and WeWork), it begs the question: surely somebody saw these disasters looming? Surely, somebody noticed that the product, service or entire business model wasn’t quite right and that the company would ultimately fail unless things changed quickly?

We ask agencies whether the onus is on them to point out potential disasters to clients and how they can get those tricky conversations started.

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It’s good to talk

Chris Woodward, CEO, CTI Digital: “As an agency operator, the moment you start properly understanding the business of the client’s business, you become invaluable to them. Famously, in the 1980s, my old employer, Saatchi & Saatchi, made British Rail executives sit in a crappy waiting room when they came into the agency’s offices for a pitch. They left them waiting for 20 minutes. When they started the pitch, the Saatchi team said to the British Rail execs: ‘This is how you treat your customers every day – and this is how we are going to help you change that.’ Always, always understand and care about your client’s business and have the courage to hold up a mirror. If you don’t, you’ll never create authentic communications that cut through.”

Chris Worrell, head of strategy, Wavemaker Worldwide: “One of the greatest, if not the single greatest, qualities an agency brings to a client’s business is an outside-in perspective. It is absolutely the job of the agency to bring this outside-in perspective to every facet of the client’s business at every opportunity. Ideally, this conversation should be had in a provocative way that elicits debate and decisions about the future direction of the business. An agency should be totally invested in its clients’ growth – if the client grows, the agency grows. However, this is predicated on a long-term, mutually beneficial relationship. In a world of short-term, chop and change, procurement-driven agency-client relationships, perhaps the motivation and reward for such behavior doesn’t exist, meaning it is easier and more profitable to ‘do the work as requested.’ This, however, is a sad state of affairs that benefits no one.”

Lauren Friezo, group strategy director, BBH USA: “Not only is it our responsibility to spot and share business problems, it’s what makes us great partners and strategists! We interrogate the problem behind the problem, never taking a brief at face value. We push all the way to the edges of the brand, consumer and culture. We call it ‘finding the cringe.’ And here’s the bottom line: if we’re not bringing a fringe issue to our client’s attention, we haven’t done our job. Because fringe problems unlock unignorable opportunities.”

Nick Myers, chief strategy officer, Oliver UK: “Yes, it’s an agency’s responsibility to advise clients on weaknesses in their products, services or strategies – their business is our business. Advertising a poor product can swiftly lead to failure. At Oliver, we aim to be true strategic partners, working closely within our clients’ businesses. This proximity allows us to identify and address issues early, saving clients money and helping them better serve their customers. A successful client means a successful agency.”

Matt Rebeiro, executive strategy director, Iris: “Of course, agencies should bring potential product and business challenges to their senior clients. At a minimum, marketers must be market-oriented, actively seeking customer perspectives and incorporating them into the organization. Agencies are ideally positioned for this as they understand their clients’ businesses without being constrained by internal biases. However, two common challenges arise. First, if the relationship is transactional, the agency may lack the incentives to be proactively curious. (Retainers can help foster this curiosity, but they’re a dying breed!) Second, many agencies lack the commercial acumen to present challenges in ways that resonate with business leaders. Show them some vox pops of Gen Z saying they don’t like the brand or product and it might pique their curiosity, but extrapolate the commercial impact of underperforming in the Gen Z market to a £50m drag on their P&L and I suspect you’ll suddenly have their attention.”

Steve Erich, co-founder and president, Erich & Kallman: “It’s an agency’s responsibility to be brutally honest about a client’s business challenges and what will keep them from being successful. As an agency, we should be one of the most knowledgeable within the organization about what people are feeling and saying about our client’s products and services and always be looking for the opportunity to turn the negatives into positives. You only need to look at Domino’s turnaround to understand the power of this way of thinking. Now, our opinions aren’t always listened to, but that shouldn’t keep us from finding opportunities to help our clients succeed, not just through advertising but through the power of strategic and creative business thinking.”

Favor the brave

Barney Worfolk-Smith, chief growth officer, Daivid: “I wish agency-client relationships were stronger, then this sort of intervention wouldn’t be needed. In reality, I don’t think it does. In my earlier career as an agency business director, I tried to occasionally add some home truths about product/distribution etc and it was met with confusion, apathy, disbelief or resigned agreement – basically nothing good. (I may have told Superdry to put less branding on its clothes because then I might actually buy some.) For that conversation to actually have any positive benefit, I feel it would have to be an exceptional relationship, with openness between top execs on both sides.” ”

Gus Marmarinos, managing director, Gut New York: “Agencies should be brave enough to share any issues or opportunities they identify. Agency-client relationships thrive as true business partnerships with shared values, goals and trust. For these partnerships to succeed, they must be built on open, transparent communication and collaboration. When agencies proactively identify challenges or opportunities, it builds trust and reflects their commitment to the business, allowing for more creative and innovative solutions to take hold. At Gut, we have three core values: courage, transparency and intuition – and that’s how we approach all our relationships, internally and with our clients. When the agency-client relationship is built on that foundation of shared values, goals and trust, it creates an environment that encourages the open feedback and dialogue necessary for success.”

Martin Beverley, chief strategy officer, Adam&EveDDB: “The best agencies aren’t afraid to challenge clients. The best clients aren’t afraid to challenge agencies. The best agency-client relationships are those that become partnerships, where both sides push each other toward something better and both sides appreciate that different perspectives lead to progress. As William Wrigley once said, ‘When two people in business always agree, one of them is unnecessary,’ so there is jeopardy in always being agreeable. After all, the whole point of an agency is to bring a fresh perspective to a client’s problem, so we should absolutely be proactive in defining and resolving problems together. Agencies must be unerringly focused on the ideas that they bring and the additional value that they add. If we only subserviently deliver what is requested, then we may only give clients what they think they want, not what they might actually need.”

James Joice, managing director, Fold7: “If a partner of mine didn’t tell me about a problem that could be detrimental to my business, I’d be baffled, to say the least. I’m certain the same would apply to any of our clients if I kept quiet about an issue that I believed represented a threat to them. Good communication is central to every successful partnership. It’s the source of trust and reflects the strength of any relationship. No subject should be off limits, particularly one with serious implications. We consider ourselves an extension of our clients’ teams and businesses. We’re their eyes and ears, always awake to threats and opportunities. So, the question wouldn’t be whether we would tell them about a problem, but rather how quickly we could spot it.”

Michelle Whelan, chief client officer, VML UK: “A true agency-client relationship should feel like a partnership. That means the agency needs to be deeply invested in understanding the client’s business – its operations, strengths, weaknesses, everything. We’re talking about the same level of commercial understanding and, in many cases, the same level of responsibility as the client’s own team. Sadly, I don’t think this happens enough any more. Many marketers are so focused on the nitty-gritty of campaigns that they miss the bigger picture – the business and service challenges that can make or break a brand. And honestly, a lot of agencies just don’t have the bandwidth, the experience or even the financial incentive to dive that deep. Day-to-day outputs are growing and shifting, leaving less room for those much-needed deep strategic dives. The solution, however, is a two-way street. Clients need to be more open to agencies taking the reins on business strategy and having real commercial responsibility, while agencies need to step up and be more willing to truly understand and act on the client’s business needs. Both sides of the partnership are looking for growth and the best way to achieve that is together.”

Julie Michael, CEO, Team One: “When we spot potential issues in a client’s strategy, we speak up about them. People who buy premium and luxury brands hold high expectations for their purchases and we believe it’s our job to represent the voice of the consumer. If we see that a client’s packaging doesn’t quite match its high-end image or that a service it provides isn’t as seamless or sublime as it needs to be, we bring ideas for continuous improvement. I often remind our teams that we are in the business of making recommendations and our clients are in the business of making decisions. It can be as simple as that.”

Ben Cox, EVP of growth consulting, Fusion92: “It’s a delicate balance, fulfilling a client’s requests while addressing potential concerns about their strategy. Agencies often have a broader view of market trends and customer expectations, which can reveal blind spots or opportunities the client may have missed. The key is continuously bringing insights as a partner in the client’s success. If something could impact its goals, it’s important to raise it constructively, rooted in data, framing it as an opportunity for precision or growth. Just remember that clients know their business and context intimately. What seems risky (or a lesser priority) to an outsider may fit within a larger vision or organizational culture we don’t see. Offering insights to inform the client’s decision is essential for a fruitful relationship. And it often leads to being invited to help solve trickier problems in future conversations.

Zach Ricchiuti, associate VP of client solutions and commerce, Kepler: “The short answer to this question is yes, no client has ever hired an agency because of its ability to keep its mouth shut. The long-form answer is that agencies need to do this with sound rationale and in a productive way. Media and creative is where the client’s business intersects with consumers. If we, as the agency, anticipate points of friction based on our target audience’s expectations and behaviors, it is our responsibility to surface this insight and proactively work with the client to determine how to address it. Deploying media and creative into the market without discussing fundamental business challenges and how media and creative is going to address them proactively is almost irresponsible as a business partner.”

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Michael Treff, CEO, Code and Theory: “It’s really about what it actually means to be a partner that will share in the responsibility of business outcomes and what kind of capabilities are needed to deliver upon that partnership. Looking at a client’s total business requires a different set of skills. You need to understand much more about its category, its entire ecosystem of products, services and marketing, plus its internal operations and costs. You need to speak very clearly to ROI on the investments being made and have the strategic chops to prioritize what initiatives will deliver fruit more quickly and those that won’t. To get there, it’s about looking at the composition of your agency partner to deliver those skills. When clients have separate, channeled partnerships (such as, ‘This is my social agency and this one is my CRM agency and that’s my e-commerce agency’), all of the responsibility sits with them to stitch it together. Most client organizations aren’t equipped to do that. The more horizontally an agency can work across your business, the more they can make an impact as trusted advisors who can see the warning signs you might be missing.”

Tom Atkinson, head of client services, Maverick Media: “Keeping quiet is the ultimate no-no. It betrays a transactional approach to the relationship, where the agency partner isn’t invested enough in a client’s business to consider this kind of tricky conversation as worth the effort. And while having these ‘truth’ moments isn’t necessarily the responsibility of the agency, per se, it’s surely one of the behaviors that we should be encouraging as trusted agency partners and, of course, customers. Content and delivery are everything, of course. I’ve never worked with a client that wasn’t interested in feedback about its product, brand or business, but I’ve seen a fair few agencies crash and burn because they confuse narrowly-held ‘research group of one’ opinions with genuine insights and measured comment. And a little humility never goes amiss either. Identifying a potential issue or opportunity shouldn’t leave a client feeling exposed or an agency feeling triumphant. It should challenge and support in equal measure, or it likely won’t get past that first phone call anyway.”

True partners speak up

Andy Berkenfield, CEO, Duncan Channon: “If we expect to be treated as true partners, we have to hold ourselves to the highest standard. That means addressing challenges openly and proactively with our clients – especially when those problems could impact our work. It’s not just a matter of ethics or principle; it’s a fundamental business responsibility. We owe it to our clients to ensure we’re not turning a blind eye to problems because doing so undermines our business value. And beyond our obligation to our clients, we also have a broader responsibility to those who engage with our work – the consumers, stakeholders and communities that are affected by it. As leaders, it’s essential that we consider the impact not addressing those problems could have on the world around us.”

Eric Ashworth, president, Quad Agency Solutions, and executive VP of product and market strategy, Quad: “Agencies aren’t hired to do advertising, they’re hired to grow businesses. That means we have a privilege and responsibility toward our clients’ business outcomes – not just our campaign outcomes. As consultative partners, we build trust with our clients and offer recommendations that go beyond the scope of an initial engagement. We tap into the multiple facets of our offering to bring unique perspectives and solutions to our clients, whether they’re ‘in scope’ or not. The concentration of online retail media spend is a great example. It’s a core strategic problem for our mid-market retail clients – especially grocers. But they have something special: people who love physically going to their stores. So, we’re helping them compete as media companies with a strategic, in-store retail media solution that gives them access to media dollars which otherwise wouldn’t be available to them.”

Ben Alalouff, chief strategy officer, Live & Breathe: “If you are not pointing out red flags, you are a poor partner. It’s often forgotten that we are paid for our foresight as much as our planning and creativity. We’re not here to blindly execute and if we don’t raise the alarm when things may be starting to go wrong, we’re not just ineffective – we’re reckless. The fable tells us that when the emperor purchased ‘new clothes,’ everyone stayed silent, afraid to speak the truth and let the emperor walk around in nothing but delusion. That’s precisely what happens when agencies blindly follow orders. The client becomes increasingly more vulnerable than it otherwise could be. But don’t get me wrong, we shouldn’t be ringing alarm bells, wanton, like some deranged carillonneur. Anything we take to our client needs to be of consequence, well thought through and we must come with a wise plan of action. Anything less and we’re just standing by, gawping as the emperor parades naked and the competition circles.”

Niki Herr, chief operating officer, Xpedition: “Speaking up and out about clients’ products, services and business strategy is core to our offering and a compelling differentiator. We are invested in the success of our clients, so it would be unethical to take their money and not point out something that we think could fundamentally affect their success. They don’t have to listen to us, but we need to share if we are concerned for their reputation or ability to meet their goals. As a diverse agency that has intentionally built itself to offer perspectives from people with varied backgrounds and uplevel diverse voices, we see speaking out as our responsibility and part of our promise as a partner to our clients.”

Kayleigh Jenkins, group business development director, Krow Group: “Agencies act as a client’s strategic partner, so I would say it’s fundamental for them to recognize any potential business problems and flag them. At the beginning of any relationship, it’s important for an agency to fully immerse itself within the business, therefore providing a good overview of all the different products and services on offer. This puts agencies in a prime position to notice any problems. However, trust needs to have been established first. Once a strong relationship has been built, trickier but important conversations can be had. Just be sure to ground these conversations with data and insight and act swiftly. We will always be there to support our clients and offer strategies to mitigate any issues where possible. Fundamentally, agencies are skilled problem-solvers. By being proactive, we can keep our clients on track with their longer-term goals while minimalizing risk and impact to their business.”

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