Client/agency relationships are breaking down on average in less than every three years. Agency fees are normally renegotiated every year often in a contentious atmosphere. And, both clients and agencies are increasingly frustrated with the details of process management as it relates to accountability. We have seen these forces at work first-hand from the client side as Consultants and the agency side as Directors and want to do something constructive about this situation. So we are offering a mediation service focused on solving these problems.
The Mediation Service
Several years ago we mediated a contentious situation between one of the largest media agencies and their motion picture entertainment client. Rather than suffer through yet another agency review, they both sought to remedy their situation. After two months of mediation, they agreed to new terms and procedures moving forward, saved the relationship and in the long run, the agency was assigned more business from that happy client. The relationship is now 25 years old.
Recently, one of our clients, working on a directive from management, needed to cut agency fees. At the same time, the agency needed to preserve a reasonable profit margin. Neither one wanted to reduce resources. We were called in to mediate. In these situations, we are not advocates for either side, but rather an impartial third party, paid a relatively small fee by both client and agency, to help each party reach an agreeable solution. We used our benchmarks to achieve a reasonable result since both client and agency benefitted from a view of what constituted fair market value for services rendered and resources offered.
The outcome from our mediation effort should be for the client to receive real value for their investment in the agency and for the agency to cover all its costs and make a reasonable profit. Whether the compensation plan is fee, commission, value, accountability, performance or incentive based, we will make sure both parties walk away from the table feeling they were treated fairly and treated the other party with fairness as well.