Tuesday, January 07, 2014

The Sticky Wicket

You hear about another one, it seems, every day. 

That advertiser leaving this agency.  Or this advertiser leaving that agency.

In the last few years, the tenure of the client/agency relationship has declined at an astounding rate.

Why?

Perhaps because clients are searching for the added value that agencies always promise they'll deliver.

But, seldom do.

To most CEO's this added value is loyalty to their brand.  Not too much to ask for when you consider that it costs six times more to obtain a new customer than it does to retain a current one.

When agencies fail to deliver, advertisers turn to discounting to create loyalty.

A fix perhaps.  But, short term at best.

And, not one encouraged by Wall Street.  After all, revenue generated through cost reduction is valued only half as highly as revenue generated through full-priced purchases.

And therein lies the rub.

For if a CEO's objective is to increase shareholder value by building loyalty to the brand, most advertising misses the mark.

After all, the added value that consumers are looking for is not so much a monetary value from a company, but rather a human value from a brand.


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