How to improve a business relationship rapidly.

With the median tenure now at just 25.5 months, can CMO’s improve the business relationship with an agency within their tenure?

In April 2021, research from executive search firm Spencer Stuart revealed that the average tenure of a chief marketing officer at 100 of the top US ad spenders fell to the lowest point since 2009. The median tenure for chief marketing officers was 25.5 months, sliding from 30 months in 2019.

With this shortening tenure, can the CMO improve or even save a business relationship with the agency? Spoiler alert, the answer is an emphatic ‘yes’.

It takes two to tango

Of course, improving a business relationship – just like a personal relationship – requires the cooperation of both parties. So why focus on the CMO? Ultimately, clients are buying a service from the agency. They hold the purse strings and are usually in the driving seat of the relationship. Our database of evaluations shows conclusively, that as client scores of an agency improve, agency scores of the client improve also. In other words, better clients get better agencies. The converse is equally true. Furthermore, without corrective behaviour, no amount of agency change will deliver better work for a poorly rated client.

Business relationship management

New figures, mined from our global database of more than 24,000 evaluations over 20 years, indicate that a disciplined, regular and objective evaluation of supplier performance, results in measurable improvements. We see these improvements both at the overall level and among specific components of a business relationship. What’s more, these improvements begin quickly and are clearly evident within just 18 months from the start of the evaluation program – well within the median tenure of a CMO.

Nice to have or must have?

“The benefits of a relationship management program align with components of a valued business partner relationship, specifically better communication, better work, and improved ROI, as well as greater efficiency and speed”.

The Association of National Advertisers report: The Business Case For Relationship Management

In its 2021 Global SRM Report, procurement and supply chain consultancy State of Flux identified that: ‘Relationship management was the most effective tool in mitigating the situation caused by Covid-19,’ and that in 75% of the leaders in supplier relationship management gathered systematic, 360 degree feedback to assess the health of key supplier relationships. 

At its essence, a business relationship evaluation can trigger a focussed conversation about the relationship between teams. So while a professional approach like Aprais is optimum, even a simple checklist on the back of an envelope can identify problems and create an opportunity to address them. Clearly a case of ‘something’ being better than ‘nothing’.

Evaluations work

Our report Evaluations Work shows that a systematic and objective evaluation results in improved business relationships.

Using a carefully curated set of questions specific to the particular scope or job function, we can probe and even benchmark responses around agency issues such as creative, media planning/buying, production etc for agencies. For marketers, the questions probe capabilities such as approval processes, briefing and leadership.

Monitoring scope-specific performance is crucial, however it has become important to also factor in the human behaviours that help build strong relationships and produce good work. We have identified seven team behaviours. These seven behaviours are identical for all job functions allowing us to compare teams in a single relationship or against our broader benchmarks.

The table below shows the percentage increase in scores (given by each party of the other) against of the seven behaviours, over the initial 18-month period.

improve business relationship
Source: Aprais database of 24,000 evaluations

Keep in mind that these significant increases are achieved purely on the basis of the way teams treat each other.

DIY evaluation or state-of-the-art?

As mentioned earlier, the act of evaluation will focus minds on the issues and encourage improvement. It will instruct better behaviour. The decision on whether to conduct performance evaluations is a no brainer. The method however, may vary. At Aprais we find that the more client-agency teams recognise the potential value that can be unlocked through better business relationship, the more they will invest in the process. Some leading brands use Aprais evaluations as a major component of their performance related bonuses scores.

Whether a simple spreadsheet or Aprais, an evaluation system that builds stronger business relationships should satisfy a number of key qualities;

  • Questionnaires must accurately reflect the responsibilities and scope of work for participants at local, regional and global level. In short, a one-size-fits-all questionnaire standardised for the organisation won’t cut it.
  • We advise anonymising the participants’ input so as to encourage open and honest feedback of their individual experience within the relationship.
  • Input must be efficient, and easy for both the participants completing surveys, and the administrators managing the system at the back end. The latter element is often underestimated particularly when specific, complex reports are required.
  • Technology can and should massively streamline this process and particularly the collection and presentation of data.
  • We advise allowing for both quantitative and qualitative feedback. The latter adds insight and is vital even if it can’t be nicely displayed in a bar chart or scale. In a metric-driven world, it’s important that evaluations are presented in a way that tracks scores, and therefore improvements, over a period of time. 
  • Results should be shared with all parties in a fair and impartial way.
  • Action plans should be developed by all parties after each evaluation round, and put into place before the next evaluation.
  • Although annual evaluations are popular, we advocate six-monthly evaluations to catch issues before they become bigger problems, and address them within a budget year. 

It’s asking too much of evaluations to say they’re all that’s needed to boost a business relationship but they undoubtedly help a great deal. They encourage the attention of all parties to focus on the relationship in question, and ask questions which require reflection and consideration. And they ultimately point the way towards improvement by drawing on the experience and opinions of those with the most expert knowledge of the relationship, the participants themselves.