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Archive for January 18, 2010

Play at your own Risk

The Downside of Frequently Changing Agencies

Written by Christopher Stanley on . Posted in Marketing

Play at your own Risk

Play at your own Risk

Advertising Age used Chipotle as an example of a company that seems to have an annual resolution to review and change the agencies it works with.

There is no question that all vendors need to be monitored, regardless of the industry. However, when a company decides to change the vendor for the same service every year for the past five or more years, vendors, and in this case agencies, are going to think twice. Yes, the business climate as it is currently does assure a large number of interested agencies looking to add new business; however, some of the most highly-acclaimed agencies may decide to focus their efforts elsewhere.

Some of the brands mentioned in the article that are known in the industry for frequent agency changes include such brands as Chipotle, BMW, Quizno’s, IKEA and Mitsubishi. While they’re all great brand accounts that are on many agency’s wish lists, the decision to pitch and enter into contract with these and other similar companies may require some additional thoughts on the expense versus benefit of the relationship.

In the case of Chipotle, since 2004 they have cycled through six agencies in as many years. Agencies spend thousands of dollars in attempting to add clients to their roster, including time, travel, and of course the addition of staff should they win the account. Upon landing the new client, it often takes agencies 3-6 months to get fully engaged and start initial campaigns, leaving a very short time for them to prove themselves. In most cases, there are many benefits, from maintaining a longer term relationship, such as allowing the teams to learn not only from the successes but also from the mistakes.

While it is important to be open to change and look for new solutions, changing just to change is rarely the best solution and will even possibly leave you out in the cold when trying to have the best vendors on your team.