More wind in the sails
Agency scoring for the optimization of the marketing efficiency of a worldwide leading pharmaceutical and OTC company
The customer
Different customers from different sectors have taken advantage of 2 hm & Associates’’ experience in the topic of marketing efficiency through agency scoring.
The project: Marketing efficiency – agency scoring for cost reduction with a simultaneous optimization of quality
The portfolio of communication and implementation agencies with the total value chain, this means, the services of the vendors in the areas of consulting/strategy, conception/creation, production and the implementation of measures has often grown historically and is normally not subject to real cost or quality controlling. Experience shows that you can often save large portions of a communication budget without losing quality. Such budget optimizations, however, require established brand and marketing knowledge. The usual “cost cutting mentality” often has a counterproductive effect, because arbitrarily shortened budgets often imply qualitative disadvantages for brand management. The project allowed for the inspection of marketing efficiency and quality through the evaluation of service providers for marketing.
The task
Evaluation of current and possible new service providers based on personalized evaluation models for the increase of marketing efficiency and increase of service quality.
2hm & Associates took 6 steps here:
- customized adjustment of a proven agency scoring model
- evaluation of agencies together with the project leaders
- identification of overpriced agencies, or agencies lacking quality
- anonymization of the offered services and retendering of the service
- evaluation of incoming offers and the planning of offer pitches
- support with the selection in terms of contracting the new agencies
The realization
In line with a workshop with employees from different departments, the proven agency scoring model was adjusted to the individual requirements of the company.
According to the size of the company sector, the agencies were evaluated by the project manager with the scoring model in lines with individual conversations or through an automated online capturing tool. The results went into an agency profile which contained all of the relevant information about the service provider.
The knowledge was then compared by an experienced 2hm consultant with their own benchmark database. This includes information about more than 2000 agencies, about average market and differentiated agency prices and production costs, along with established sample contracts for new agencies and an own price and quality index.
After this, the client was included for the deliberation about which services were to go in a retender. For this, the existing service contracts were analyzed, the offered service standardized and the new potential service providers identified. The following pitch phase is organized, supervised and, upon request, also anonymously conducted in the first phase by 2hm.
Finally, the real savings factors with the same or increase quality are filed monetarily.
The result
A sustainable increase of marketing efficiency was reached through an increase in quality from externally purchased services and through the considerable cost reduction for private communication measures and leverage in production.
Without renegotiations with the agencies that might remain existing, 10% to 15% of the communication budget can be saved. The reduction of the complexity of care through the increasing of the brand competence from agencies.
The standardization in the purchasing process through the bundling of agency services, the attaching of basic agreements, process instruction for agency evaluation and the establishment of lead agencies are additional gains in efficiency for the organization. The transparency in the agency landscape achieved through this leads to a sensitizing of private employees in regards to the meaning of brand management, the quality of agencies, but also the costs connected with this. Due to positive experience, 2hm also often offers a model for the implementation of the process in a company without commission and thus, it is risk-free for our customer.