The Untapped ROI Opportunity for Procurement: Upskilling Clients to Get More Value from Agencies

Working Smarter With Agencies Unlocks Savings

Summary

Procurement teams excel at securing agency partnerships, but initial savings are just the start. There remains a significant and often overlooked ROI potential in upskilling internal teams on effective agency management. Targeted training and strategic relationship building can unlock substantial budget savings, improve project outcomes and enhance procurement's strategic value.

After The Rate Negotiation Has Ended

Procurement teams have become masters of negotiation, able to secure top-tier agencies on competitive rates at the best terms. But is that where getting value for money from agencies ends? Consider the significant, often untapped, savings that could be made when it comes to how clients actually work with those agencies.

• In my experience: Inefficient agency management can often lead to budget overruns of 20-30% per project – money spent without meaningful benefit.

• For example: Imagine a 500k annual agency budget. A 15% overspend due to poor management of the agency translates to 75k in wasted funds – easily enough for an extra campaign or substantial new project.

• A question: Are your business partners working with their agencies in a way that maximizes their return on spend, or are they in effect leaving significant savings on the table?

The Problem: Untrained Clients, Uncontrolled Costs

Imagine you're asked to drive a racing car, but you've never even sat in one before. That's what it can be like for many clients who end up working with agencies, thrown into leading situations they've never experienced, and it can be tough.

• Learning on the fly: Lots of clients have to learn how to work with agencies as they go. They might not have had any special training, unless they used to work at an agency themselves. This can make them feel like they're "faking it," or like they don't know what they're doing, leading to rash or poor decision-making.

• Feeling the pressure: Clients often feel like they need to be the boss and know everything, especially when talking to the agency. But really, they might be worried about making mistakes and don't want to ask for help in case they look like they don't know what they are doing.

• The remote work challenge: When everyone is working from home, it's hard to learn by watching experienced coworkers. Clients might miss out on seeing how experienced colleagues work with agencies, which can lead to bad habits without knowing.

• Ineffective briefing and feedback: When clients are unsure, they may not give the agency good strategic direction (or know what this looks like vs. personal preferences).

  This leads to the agency going down the wrong path, and changes later that cost money and time.

• Requests that inflate budgets: When you're not sure what's important, it's easy to ask for everything. But those "extra toppings" can really add up, and might not make a difference to the final outcome.

• Focusing on minor details, neglecting strategic imperatives: Clients can fixate on small details where they feel comfortable commenting in order to get a feeling of control. But often, these have little impact on the bigger picture and only serve to consume time and money.

  
  

Together, this can lead to budget overruns, relationship breakdowns between clients and agencies, unnecessary repitches and agencies declining future RFPs.

The Solution: Smarter Clients, Smarter Savings

Instead of costly agency changes, empowering internal stakeholders with the right skills can amplify the benefits from strategic agency sourcing. These skills include:

• Budget understanding = no surprises: Knowing which decisions have the greatest impact on agency costs, what is worth paying attention to in an agency budget (and what isn't), means fewer unexpected bills, better financial control and less wasted client and agency time.

• Clear objectives = stay in budget: Understanding how to set objectives that make agencies focus helps keep projects on track and avoids budget blowouts.

• Outcome focus = faster projects: Focusing on what really matters to the agency deliverable means projects finish quicker, saving everyone time.

• Actionable feedback = no costly fixes: Knowing how to give agencies clear, useful feedback prevents expensive re-dos and keeps things moving smoothly.

Procurement Gain Too

When clients work smarter with agencies, procurement teams can also win:

• Enhanced strategic value: beyond the expert deal-maker and problem-solver.

• ROI: savings continuing beyond contracting.

• Stronger agency ties: smoother projects, better outcomes.

• Reduced firefighting: less time spent fixing problems and running repitches, and more time on strategic work.

A Strategic Investment in Efficiency

Maximizing ROI with agencies means looking at the whole picture. It's about getting the best deal at the start, and then making sure those benefits aren't lost once the work gets going. Investing a small part of your budget in skills training might not seem like a big deal, but it can lead to substantial savings and improvements. When procurement teams don't have the time to train colleagues themselves, finding someone who can is a smart move. It ensures that all the hard work put into finding the right agency doesn't go to waste, and that everyone benefits from a smooth, efficient partnership.