by Colin Yeo • July 14 • 5 min read
Shopping for the right agency
Shopping for the right agency for your business can be a tough choice to make. The right ideas, relationships and synergies can all factor in, especially when extraordinary situations come to the forefront.
Imagine that you have your card and you’re ready to shop your heart out. There’s a great outfit in the window in the distance you want to try. But first…
You spot your first targets on a nearby rack. Should you get the new umbrella you’ve always wanted or a stylish new hat? Hmm… that hat is too good to pass up. Sold! Jaunting along, you find a pair of shoes. They definitely match the outfit you have in mind, so, worth picking up. You are looking good and people are noticing! Things are looking great.
Suddenly, thunder strikes… and you find yourself caught in a downpour. Now the hat’s ruined and your shoes are drenched, never mind even trying to get to that shop to try on the outfit you wanted.
When crisis hits, businesses that are caught out in the open can flounder and sink. The recent Covid crisis is testament to that. Stocks dropped at least 25% in Q1 and about 3800 local businesses closed down in April alone in response to the pandemic.
It’s been a particularly trying time for many; F&B outlets and retail stores were especially hard-hit from the circuit breaker initiatives to curb the spread of the virus. Out of the many thousands of food outlets that were surveyed throughout the closure, a whopping 42 percent said that they would not be able to operate at their current costs for the two months, and 81 percent would not be able to survive a six-month closure.
SINK OR SWIM
Some F&B outlets had other ideas though. After the Covid hit, Subway US began selling ingredients for their famous sandwiches through their own pipelines, becoming an ‘essential business’ of fresh produce with the premise of being a ‘contact-free’ way of obtaining your groceries.
However, they’re not the only ones. Another fast food franchise has been selling raw yet highly profitable ingredients for awhile now. As it turns out, the bulk of Domino’s Pizza’s income doesn’t come from their pizzas, rather surprisingly, for many years, it’s been from the sale of their dough and toppings to their stores. 97% of Domino’s stores are privately owned by franchisees who buy the quality-controlled ingredients from Domino’s exclusively. Over 56% of their revenues received are from the sale of these raw materials.
What is clear here is that for some companies, their survival strategy was not a reactionary endeavour. Some ingenuity and foresight was required in the handling of these businesses, because when it comes to the volatile and extremely fast-moving markets these days, reactivity towards a crisis is never as effective as taking a proactive approach to dealing with it; like getting that umbrella early on, so to speak.
Patrick Doyle, CEO of Domino’s pizza was the key motivator behind the turnaround for the company. Spotting the failings of the product and service they provided, he spearheaded a major change in recipe and engaged new advertising campaigns with a head-on approach that addressed their shortcomings in a surprisingly honest manner. Admitting that their pizzas were often reviewed as sub-par and relaunching their recipe alongside a new focus on technology and online delivery efforts ensured that the company and their franchisees were fully in on the revamp. Domino’s is now the undisputed king of pizza delivery.
ADVERTISING ANONYMOUS
In the current climate of uncertainty, many companies are looking at ways of cutting down on spending, and advertising costs are one of them. Downsizing costs however can inadvertently lead to letting opportunities slip by, as the upside to this is that it’s now a chance for businesses to truly explore creative avenues within these shifting markets.
With some of the examples we’ve seen of those that were riding the wave of adversity to come out on top, hiring the right agency was one of the ways to go for these companies in turning things around. They forged good partnerships with the right agencies to carry out their plans to move forward and rebuild their brands.
Advertising is a brands’ bread and butter, signalling its’ presence and growing its’ awareness in the market. But shopping around for an agency is not as simple as hiring the first one you meet. Finding the right fit is important if your business is to survive a disaster.
THE BRASS TACKS
So what makes an agency a good fit for your company? Well, from our experience in the industry, there are a few criteria that ensure you’ll get the most value out of your agency search which can be summarized in five different key points.
The right communication. This one seems like a given; it’s the name of the game really. Communications that span from how an agency provides feedback to briefs to the novel ideas given from the understanding of the business are what strong relationships (and successful business models) are built on.
Matching your speed. Your agency may be large and layered, or small and fleet-footed. But the important thing to think about is does their timing fit yours? If you require quick turnarounds at a brisk pace, a large and lumbering agency may not fit the bill.
Creative problem-solving. All plans are susceptible to drifting off-course. But is your agency willing to put in the extra hours to work and rework a job to the standards you’ve set? It’s the mutual agreement in the course of problem-solving that makes for smooth sailing.
The ideal work capacity. If there are multiple jobs ongoing, what are your chances of engaging the full force of your agency to focus on you? There are always limits in terms of manpower so keep in mind that your workload does not buckle under pressure. After all, you can hire multiple agencies to focus on your specific needs.
Proper roles and purposes. Some believe it’s best to hire specialists for your company. A communications expert would work well together with market researchers, and design firms can create the stunning look you want. But if you can’t afford to specialize too much, then a boutique agency with experience in these aspects of marketing will do the trick.
A NEW NORMAL – Companies are dealing with decentralization
Perhaps your company has adopted a ‘wait-and-see’ kind of approach in the past few months. Maybe costs are cut and certain contingency plans are in effect. Many companies have been chugging along to the Covid outbreak determined to maintain business as usual. But these really are unprecedented times we’re living in.
Manufacturing companies that have long based their operations in China have been mulling about shifting some of their production capacity away from China into more decentralized systems post-Covid in an effort to mitigate future disruptive impacts. Turns out that putting all your eggs in one basket wasn’t a good idea. It seems like new ventures in various other countries will increasingly emerge in the near future.
Agencies are being pushed to work harder than ever
During the Covid crisis, we crafted proposals for select clients with specific ideas we had on what could be done moving forward. A case study of their brand and what potential opportunities and solutions might work in light of the Covid outbreak was created for each client, not just to add value to our service, but also as an exercise for us to express our thoughts and creative designs to our respective recipients. Was it a fruitful endeavour for us and the clients we served? We can’t say for sure yet, but the benefits of keeping proactive cannot be understated, no matter what the business climate is like. Plan for good weather, as they say, but prepare for the worst.
The good news is that businesses are slowly reopening. Whether or not there will be a second wave as is being predicted, we cannot say. All we can say is that things are slowly going back to normal. Well, a new normal at least.
GETTING BACK ON BOARD
The question on most of our minds now is: what is this new normal going to be like? Now we can’t answer that but our best guess is that although we will all be adjusting to some form of restrictions, at least in the short term; life and business will still go on.
Many companies will undoubtedly be looking to advertise now that we’re reopening. The pandemic reduced shopping to the essentials, as many of us have experienced the paranoia of browsing at grocery stores during the circuit-breaker. So you would think that many of the peripheral consumer products and services would have been hit harder by the downturn. However, this may not be so.
Demand for fashion, beauty, electronics and home products haven’t actually dropped as much when you compare them to grocery products, which also underperformed according the baseline demand from Amazon. So the good news is that things will probably go back to normal in due time, and hopefully, no particular industry would be left behind.
Yet, these findings reflect an online shopping market that still does not factor in the hotel and tourism industry which though we are sure will bounce back in demand once the governmental health and travel restrictions are lifted, there’s no telling how much they would have been affected during this nearly five-month event. And we may not be out of the woods just yet. There’s talk now about a second wave of Covid, and new (and old) diseases that are popping up to, well, plague us in the near future.
What this means for businesses and agencies alike is unclear at the moment, but we know one thing; the show must go on and advertising will play a crucial role in defining the marketplace, with new ideas and services bringing value to the companies that will be forced to evolve. Certain industries like travel and tourism are bound to be hard-hit and undoubtedly some changes need to happen if these companies are to survive a second shutdown.
Has your company been affected in this manner? Tell us in the comments below if your thoughts about life, business and the economy during the Covid pandemic are generally optimistic, pessimistic or mixed.
Reach out to us for your own advertising campaign needs.