What is ARM, and why should I care?

Today’s guest post is from Peter Portanova, a Senior Project Analyst for Source One Management Services that specializes in the marketing spend category decision support for clients seeking to enhance their strategic marketing efforts and drive valuable agency relationships.

Relationships. Is there any institution more complex known to humanity? Whether between a group of people, or between a group of businesses, relationships are complex, messy, and often times, toxic. As businesses struggle to remain relevant in a volatile and fast-moving environment, the push to do more with less has never been so evident. In a well-circulated and often-rebuffed article from 2015 titled “Your Agency Hates You and You Don’t Even Know It“, the author attempts to identify the reasons relationships seem to fail (that is, if you are an agency and you are comfortable placing the majority of the blame on your client).

Consider the state of the marketing and advertising industry in 2015. Buzzwords like “Reviewmaggedon” and “Mediapalooza” dominated headlines, and the year ended with marketers parading through the streets when Pepsi decentralized their marketing procurement team. Fortunately, Pepsi’s decision does not indicate a trend, and an ANA survey to marketers reaffirms the value of procurement in the marketing process. To summarize the findings, many executives see value in procurements process, as long as it does not hinder the fluidity marketers require. However, the overarching question remains: How does procurement adapt their process to become more accepted by marketing stakeholders?

Enter, Agency Relationship Management, or ARM for short. Like Supplier Relationship Management (“SRM”) ARM works on the client’s behalf to ensure a fair and equitable relationship. There are many processes and services that fall under the umbrella of ARM, and procurement is well tooled to operate simply as a mediator, or as the manager of a full sourcing event. The ultimate goal of an ARM program is to enhance the relationship between a client and agency, and to ensure that expectations are clearly communicated and campaigns are integrated and executed seamlessly. Whether working with an internal team or an external third party, ARM programs ensure a best-in-class contract, and enable the client and agency to react swiftly when the market shifts.

“My relationship is great!” “My agency does everything for me!” “My agency does nothing!” “My agency is terrible!” Relationships between clients and agencies exist on a spectrum from love to hate, and require regular maintenance to remain viable. Consider a married couple in their “honeymoon phase,” believing all is well and that the relationship will last forever, or consider the alternate feelings of disappointment and anger. ARM exists as the marriage counselor during rough patches, OR as the open lines of communication and responsiveness when everyone is happy. Simply believing your relationship is successful now, and therefore does not require proactive measures can be detrimental over time, and may lead to the ultimate dissolution of the union (which is expensive, time consuming, and disruptive).

Aside from mediating and working as the communicator, ARM is hugely useful is evaluating current relationships, identifying future opportunities, ensuring competitive rates, and developing a scope of work that is fair and equitable. While relationship management might connote issues, the beauty of ARM is that is works to ensure issues seldom arise due preventative and proactive measures undertaken to ensure the constant delivery of value. Whether there is concern over scope, rates, or capabilities, the objectivity of a third-party outside of marketing works to alleviate to concerns. Furthermore, as noted by the ANA, having a separate business unit working on negotiations is hugely beneficial, and allows those engaging in tactical work to remain focused.

Always remember that relationships are mendable. Unless seriously damaged with fundamental issues, replacing an agency partnership should be a last resort. While there are certainly benefits in doing so, alternative solutions should be the first consideration. A full search is time and labor intensive, and hugely disruptive to current operations. Typically, issues can be resolved through the rotation of resources, or the assignment of new teams to provide additional benefits. Similar drawbacks exist for agencies, which are forced to dedicate additional resources, which may distract from the execution of tactical work. By having an ARM team and process in place, the process is far more manageable, and can begin with simply evaluating the relationship and identifying both positive and negative aspects. After such an evaluation, a process for resolution can be created, ranging in both complexity and extensiveness.

An internal department is a viable solution is for managing relationships, but additional benefit is available through the utilization of a third party. Market data concerning rates and contract terms allow for a greater advantage in negotiations, and flexibility in resources ensures clear communication leading to a rapid resolution. Whether establishing an internal department, or looking for a wholly-outsourced solution Source One’s expertise and experience are ready to assist you in the implementation of your ARM program.

Thanks, Peter.

Leave a Reply

Your email address will not be published. Required fields are marked *

CAPTCHA Image

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>