The mere act of conducting a disciplined evaluation of supplier performance often results in performance improvements. For example, Volvo Car Corporation and its suppliers concluded in a research study, that ‘the use of different evaluation perspectives revealed a huge potential for performance enhancement’.
Our database of 19,000+ client-agency relationships shows that over the past 10 years, the average client rating of agency performance has risen from 71 in 2008 to 75 in 2018. This is a simplistic view that hides a critical issue. If evaluated relationships improve with time then it follows that newer relationships will pull down the average, while more mature relationships will lift the average scores.
So a more accurate way to measure the impact of evaluations on performance is based on the number of occasions the relationship has been evaluated over time.
Our analysis shows that over the course of eight evaluations (normally conducted every 6 months) the client evaluation of the agency performance improves 10% from an initial 69 to 76. In the same period, the agency score of their client improves on average from 73 to 79. These improvements are particularly impressive and valuable considering that many relationships will have faltered or failed in the same period.
If you’re still not intrigued, then consider this. The devil, or in this case the delight, is in the details.
Evaluations of agency creativity by the top 10% of marketers (as evaluated by their agencies) compared with the bottom 10% shows a remarkable 37% difference. Similar improvements are seen across the other agency disciplines such as media planning with an improvement of 21%.
A simple and profound conclusion. Systematic and objective evaluations between marketers and their agencies results in improved performance.
In the words of Peter Drucker: “If you can’t measure it, you can’t improve it”.
Watch our short video summary here;