Financial models aren’t exactly the sexy side of the business, and I agree with this. As agencies today are striving to build their version of the agency of the future, it’s not uncommon to hear about creativity, consulting, technology and even delivery. But no one talks about what it means for the financial model. Like most things, the financial model must quickly evolve to meet the changing needs of both clients and agencies.
Today a marketer’s world is complex, competitive and requires expertise that often goes beyond what a full-service agency can offer. For many marketers, the traditional, full-service retainers are no longer relevant. This largely outdated model comes with a perception of excess. Most notably, big teams and layers of leadership who don’t touch the business. On the other end of the spectrum, the scrappy and tactical project-based model is also outdated because it’s not set up to support the ongoing strategy and prioritization needed to win in the marketplace. Imagine a world where the financial structure was beneficial to both the client and agency and paved the way for inspired collaboration. The core team model can do that.
The core team model enables the client and agency partnership to reach its full potential by giving each what they need most: stability and flexibility. Just like it sounds, this model retains a core team only, the key people clients want engaged in their business to drive strategy across the work. That generally means a small and dedicated team. This mid- to senior-level leadership team likely includes client services, strategy (perhaps media and/or analytics), creative, technology and project management. That’s it. This team cannot only partner with the client on all strategic planning, but they can also concept and execute the work if needed.
Enabling a true business partnership
Our clients have real business problems they are accountable to solve. Time and time again I hear from clients and prospects that they are seeking an agency partner that is truly an extension of their own team, immersed and invested in the business. They want peace of mind knowing their budget is being spent on a small core team that is seasoned and nimble.
The flip side to that coin is that agencies want to build the right team to deliver great work and this gives them the financial commitment to do that. It is a dedicated team that can function as a true extension of the client team without the distractions of other client work. This structure enables the ideal partnership, one that starts at the planning stage where they collaborate with clients on a strategic roadmap in service of achieving their objectives.
Creating flexibility to execute
Some clients who prefer the project-based model like the idea of agencies competing for the work. They believe that gets them the best thinking and price. The obvious downside here is that, as a client, you don’t get the consistent agency team. As a result, constantly spinning up new teams results in lost productivity and usually means higher project costs. The core team model allows for some of this competition without compromising on the strategy. Clients get dedicated thought leadership from their agency team with the flexibility to choose how the executional work gets done. Once the strategic plan or roadmap is determined and priorities are set, multiple agencies can pitch the executional work.
Driving greater efficiency
Do more with less. If you’re a budget owner of any kind today, you’ve likely felt this pressure. The core team model exists to achieve greater efficiency for agencies and marketers. A small, dedicated and consistent team working in service of achieving the overall business objectives, partnering on planning and helping define what needs to be executed paves the way for teams to move faster. Consistency at the business and strategy level drives greater efficiency overall from a timing, onboarding and cost perspective. It also defines strategic priorities versus executional work, which allows for appropriate budget allocating.
Most of us got into this business to do great work. On that journey, it’s no secret that many obstacles must be navigated. The finances don’t need to be one of them. Proactively managing the financial structure so the teams can focus on creatively solving the business challenge at hand is the best way to set everyone up for collective success.