NUMEROUS ISSUES WEIGH ON MINDS OF AGENCIES, CLIENTS
Editor's Note: Agri Marketing magazine recently spoke with executives from the top five agriculture agencies to discuss the key elements to their success and provide insight into the agencies' relationships with clients. The executives are:
- Steve Barr, Osborn & Barr Communications
- Kim McConnell, AdFarm
- Greg Nickerson, Bader Rutter & Associates
- Mark Perrin, McCormick Company
- Steve Rhea, Rhea & Kaiser Marketing Communications
AM: What has led to your continued success through up and down cycles?
Barr: It's a simple formula: Focus on exceptional people that provide outstanding value for clients. We immerse ourselves in our clients' business, and we're proactive in delivering value-added counsel, powerful creative, and innovative strategies and solutions that deliver results for clients. We work with clients to plan and manage all points of contact with their brands, their issues and their products in agribusiness, rural marketing and even government. We partner with our clients and aim to understand their business philosophies and operations in depth so we can provide the products and services that propel them forward. Clients respond to results and that's what we deliver.
|Steve Barr, Osborn & Barr Communications|
Also, our passion for the agricultural industry is well known. Many O&B employees grew up on family farms and in family agricultural businesses. Some remain actively engaged in family farming operations. For others, agricultural endeavors have become hobbies that keep them connected to what they love. Our passion for agriculture translates into the insightful work we do. We deeply understand our clients' businesses, and that results in dynamic communications that advance their brands, transform their stakeholders into believers and create results for their efforts.
McConnell: Stability, focus and a passion to continue to "drive deeper" in all aspects of our business help us succeed.
AdFarm benefits from the stability of quality people and the support of quality clients. We are fortunate to have a good balance of people with both "ag-ness" and "ad-ness" expertise and experience. Our 100-percent focus and commitment to the agricultural industry is appealing to clients who want and expect more from their marketing communications partner, and our commitment to "drive deeper" and add greater insight is appreciated by clients operating in a rapidly changing, dynamic market.
Nickerson: We have been blessed with outstanding clients who believe in the value of marketing and brand building, during good and not so good times. In addition, our fastidious focus on client service has built long-lasting relationships. That, in turn, gives us a place at the strategic table, not just the tactical table, which is a pretty high-value position in which to be.
|Greg Nickerson, Bader Rutter & Associates|
Perrin: More than anything, we believe success is a result of our focus on generating sales growth for our clients with strategic and creative communications expertise. We call ourselves "sales communications professionals," and we live out that charge every day. A big part of what we do is help drive market segmentation for our clients, then seek out and leverage sales growth opportunities within those segments. Even in so-called down cycles, certain segments offer "up-cycle" opportunities. The clients we attract understand that the tactical tools we have at our disposal are a means to an end, which is sales growth.
Rhea: In a few short words, I'd say perseverance, tenacity, passion and great people.
We exist because of our clients. We try to be great listeners, strategists, strong on creative, good business people and pay attention every day to our clients' needs. We exist because clients ask us to provide great ideas, and the organization is built around responding quickly to our clients' requests.
The last point -- and maybe the most important point -- is Rhea & Kaiser's willingness to reinvent itself as often as needed. The agency must continually manage change. It is our ability to capitalize on change and the way we do business that has, so far, kept us successful in up and down cycles.
AM: What were the big issues on your clients' minds this past year?
Barr: Maximizing the potential of the current environment is always an issue for clients. Huge product demand, raw material prices, energy costs and continued emphasis on cost controls have created excellent opportunities for our clients. At Osborn & Barr, we see our role as using these opportunities to create the "change reactions" our clients need for their businesses, issues and products. No matter what the issue, the question is always, "where is the upside?" We help our clients recognize how every big issue that surfaces is an opportunity to strengthen their position in the market.
Managing momentum through 2004 and into 2005 has been tough. It has taken market savvy, a high tolerance for risk and a bit of good luck to grow market share. With market share growth, there are strategic opportunities for image management. For example, Osborn & Barr worked with Pride Seeds in Canada to develop a re-branding campaign that establishes Pride Seeds as "Hero Hybrids." To make Pride Seeds stand out from the competition, large farm operations received a teaser direct-mail campaign that included a barbecue apron with the message "Pride is cooking." This was followed by a print campaign that ran in trade magazines.
Speed of communications is another client issue that we have addressed. A client wanted to get all the print and broadcast placements O&B secured to its field reps as soon as possible, so we created a secure Web site where the reps can download the links to each placement shortly after they appear. It's a simple way of keeping the field reps abreast of communications in their territory.
McConnell: Issues vary depending on the client, the industry sector, the geographic region in which they operate and the life cycle of their product line or services. Almost all clients are challenged to anticipate and respond to the needs of a consolidating customer base. Many face margin and profitability issues as a result of increased price competition, increased competition from generic product entry and declining performance advantages, and a shift in power towards the channel and the end user. A number of our clients are grappling to respond to a changing business and market environment that involves partnerships, alliances and working agreements, either to reduce costs or to gain market advantage. Many clients struggle to determine where they fit in a world that is bigger than production agriculture -- a world that is global, largely urban, and concerned about issues and topics beyond our clients' areas of comfort and expertise.
|Kim McConnell, AdFarm|
Short-term, some of our clients are operating in markets challenged by drought and/or low commodity prices. Some are concerned about increased challenges as a result of trade issues and currency rate fluctuations. Conversely, some are challenged with enormous growth opportunities as a result of disease, insect pests and/or new market opportunities.
Nickerson: A couple of things come top of mind. First, the pressure on margins created by generic competitors has a ripple effect touching many facets of the marketing budget. We're looking for ways to differentiate branded products but doing so in an environment of declining budgets. Second, we see more attention being paid to market segmentation and focus. Being all things to all producers is seldom financially feasible.
Perrin: Two key issues come to mind. The first is measuring the speed of technological change being adopted by producers and making sure we stay ahead of the curve. This is not only from the perspective of products but also from the perspective of how producers get and use information. The tools we've relied upon for years to disseminate our messages will not be those we rely on in the future.
The second revolves around the age shift going on in agriculture. We believe it is having more impact than the raw data may indicate. Younger producers are different and demand a different marketing approach. McCormick is on the leading edge of understanding this shift, and we are applying that knowledge to our clients' marketing communications plans.
Rhea: The important issues depend on the client and product category. For example, BSE was a big challenge for Pfizer, our animal health client. Soybean rust is creating a changing-daily challenge for Bayer CropScience. A huge crop has provided opportunities for Growmark, but falling grain prices and rising fuel costs are challenging the co-op and its customers.
|Steve Rhea, Rhea & Kaiser Marketing Communications|
The bottom line is that there are challenges that our clients and we can and can't control. We are working with our clients to identify problems that we can control to help them turn problems into marketing opportunities.
AM: Issues we hear about are ROI and accountability. How do you address this with your clients?
Barr: One metric we use is relationship valuation. We not only track and analyze customers buying a product or service but we ask what value they place on their relationship with the company providing that product or service. That's the "belief factor" that gauges the sustainability of a relationship. It's a metric that goes beyond measuring brand awareness to recognizing the value of brand trust. It speaks to the fact that retaining an existing customer is more cost efficient and productive than acquiring a new one. Of course, we continue to utilize traditional means (aided and unaided awareness, intent to purchase, etc.) to gauge the effectiveness of direction and the resulting creative/media formats.
We believe that part of being accountable to our clients, and certainly part of getting the best return on their investment, is the willingness to try new ideas. We continually investigate creative alternatives for our clients so they can set new benchmarks instead of investing the entire marketing budget into only traditional methods.
These days, the heightened awareness and importance of financial accountability also bring into question how companies run their businesses. We have the reputation of being a buttoned-up agency in terms of our financial policies and processes. Our tight financial practices and thorough oversight benefit our clients when we work on their behalf with outside suppliers. Marketing communications can be a large percentage of a company's operating budget, so clients need to know exactly where those dollars are going.
McConnell: "Value," however a client measures it, continues to be a major issue for all clients and a major motivator for all AdFarmers. We continually strive to find new and better ways of delivering greater value to our clients and to provide it in a manner that retains a fair return to our agency. This is the impetus behind AdFarm's "driving deeper" business philosophy. We strive to deliver greater value through efficiency in our operations, retaining a lean yet motivated and focused group of employees dedicated to specific clients, and by working with a group of quality suppliers who are engaged in our clients' satisfaction. We also add value to clients by providing direct access to our network of industry contacts -- a benefit that is becoming increasingly respected in today's competitive market environment.
Regarding accountability, AdFarm provides formal and informal reviews with all clients on a regular basis. In addition to reviewing campaign quality and client satisfaction criteria, these reviews also provide open access to, and discussion of, financial and business evaluation data. Experience tells us that this approach leads to greater client and agency teamwork, and a commitment by both parties to find operational efficiencies.
Nickerson: We strive to establish metrics at the initiation of campaigns and get a commitment to measure at the conclusion. The use of annual benchmark awareness/comprehension surveys is increasing. Also, the Internet has created opportunities for quick and simple surveys that can help us get a fix on strategic or tactical direction. Every year we are seeing growth in direct marketing applications. There you can measure impact a little more easily, but it often takes cooperation from the channel. When you have independent distribution it can be very difficult to close the loop on measurement.
Perrin: McCormick began establishing tactical measurement criteria several years ago and now has progressed to the point of attaching metrics to almost every tactic we perform. When you think about it, we demand accountability from our employees and our suppliers, so clients should demand it from the agency. We embrace the challenge and believe it helps make a solid case for choosing a bona fide communications partner.
|Mark Perrin, McCormick Company|
Rhea: Clients are demanding measurement in almost everything we do, and I don't blame them. Our clients are accountable to their executive management and stockholders who have expectations from the company's stock. This is just how it works.
Another key point is not only helping clients optimize the highest return on investment from new products, but squeezing the most value out of mature products and creating synergy from complete product portfolios. To accomplish this, we have to intimately know our clients' customers, markets, products, competition, challenges and trends better than anyone else in the category.
AM: How is your agency applying new technology to internal operations such as online workflow or training?
Barr: Technology is always evolving, so we are continually researching new ways to improve our business processes. Utilizing new technologies, we have been able to integrate many business processes such as work flow, budget management and production. This enterprise-wide integration reduces overall administration costs and allows our employees to strategically contribute to our clients' success.
Our CFO has partnered with systems provider Advantage to develop one of the most comprehensive agency-management systems available. Our clients receive real-time reporting on their projects as well as financial reports customized to suit their specific needs.
In addition, to assess which media outlets will perform better for our clients, we are using a proprietary analysis program utilizing a pure probability model instead of a linear formula. This demographic analysis pinpoints the target market more accurately, so there is less wasted coverage. The end result is the client receives more value for every dollar spent.
McConnell: Technology is critical to the success of AdFarm's "one-agency" operating matrix and a key element in our commitment to client interaction and communication. In the past year a couple of new technology enhancements have become critical to AdFarm operations. As the technology becomes even better and our understanding of how to utilize it grows, we anticipate the technology will play an even greater role in the efficiency of our operations, the quality of internal and client interaction and, as a result of that, the quality of our work.
The first technology is a new customized version of the agency collaborative tool "Marketing Central" called Farm Gate. This tool plays a foundational role in the collaboration and coordination of the entire AdFarm communication process. The second technology that has greatly enhanced internal operations (and communications with some clients) is video conferencing technology. While this technology has made great steps forward in the past year, it still has a ways to go. Video technology has greatly improved inter-office communications and reduced employee travel, and as one client stated, "Once you start using video conferencing, it's hard to go back to telephone conferences -- it's the difference between speaking directly to a person and talking in the dark!"
Improvements in bandwidth and Internet technology also have had a positive impact on AdFarm in terms of remote access, quicker turnaround times and new interaction tactics such as Webinars.
Nickerson: Bader Rutter uses password-protected intranet sites to post budgets, timelines, estimates, etc., that the product management team can use to track its business. We are also implementing more robust associate training programs, including archived modules that can be accessed on demand.
Perrin: For McCormick, connectivity is the key. We have invested heavily in technology that provides real-time workflow information not only for our staff, but also for our clients. In addition, we're using the technology to gain time all along our workflow process -- status updates, data review, approvals, budget, etc. If systems ultimately make it easier for our clients and save them time, then we think we're on the right track.
Rhea: When I look back to our early days at Rhea & Kaiser and where we are now, I'm amazed at the change. For example, we now approve PDFs with clients online no matter where they are. Our staff can stay in touch with e-mail and check the status of jobs via wi-fi from a hotel room 1,500 miles away. We conduct meetings by Web conferencing with clients and partner agencies from anywhere the attendees happen to be. In addition, we exchange production materials digitally with vendors and publications without waiting for FedEx or a vendor salesman to stop by in person. We now have agency employees working in remote locations with the comparable connectivity of other employees located in the next office. What we are doing isn't anything beyond the norm today, but this is what our clients and vendors expect.
AM: What are the challenges in recruiting good people? Is there a professional shortage in agriculture?
Barr: We are always looking for great people to work at Osborn & Barr. Fortunately, with our growth and exceptional client base, we have experienced a shift in dynamics -- more people seek us out for positions. They see names and brands such as Monsanto, John Deere, Michelin, USB and USDA and they want to be associated with them. Plus, talented writers, art directors and account people want to work for an agency that is growing and has a vision for the future.
Agency growth and diversification also help us keep our existing talent. We encourage creative freedom so our employees enjoy the challenges of pushing beyond the expected to new ways of communicating ideas and new techniques for driving home the message. O&B supports the push to deliver the innovative by creating an environment of development that allows our employees to increase their knowledge of client industries and the communications business so that they are continually stimulated by new ideas and can transform those ideas into new concepts. We encourage them to participate in NAMA, Ag Club, Ad Club, AAAA and other organizations. We also bring in speakers and hold seminars and classes so that our employees continue to grow professionally. When people are growing, they tend to stay longer, and their valuable experience stays.
O&B also developed an internship program that allows us to attract some of the best young talent from universities. It's a great training ground for them, and it gives us an opportunity to evaluate their potential and bring on the best as full-time employees. Some of our former interns have been with us for 13 years now.
McConnell: Quality people are the cornerstone of our business and AdFarm management's highest priority. AdFarm has been fortunate to retain a much higher-than-average percentage of our people, and we have attracted some exceptional new talent. The quality of our clients, the awareness of our agency and the quality of work we perform are primary reasons cited by new creative, PR and account management people joining AdFarm. In the past year AdFarm has also attracted additional senior management talent. These people cite our clear focus, crisp business strategy and the experience of our management team as reasons for joining our growing firm.
The biggest challenge we face is identifying experienced agricultural communications people with a strong strategic business and marketing foundation. Thankfully, we have a solid base in this area and are able to provide internal training and support to raise the bar in this important aspect of our business.
Both a challenge and an opportunity we share with our clients are persuading young professionals that agriculture is a dynamic, energetic and high-opportunity world.
Nickerson: We offer candidates an agency with a strong track record of consistent growth and outstanding, marketing-minded clients. After the tough 2001-2004 years, stability is a very important criterion and we're fortunate to have grown our business each of those years. Bader Rutter's heritage and reputation also help us attract good people. In late 2003 we moved into a contemporary and state-of-the-art headquarters facility, which is very important to prospective employees. There is no shortage of professional communicators; however, finding those with personal agricultural experience and continued ag interest is an ongoing challenge.
Perrin: A key to recruiting is developing a reputation as the kind of agency where good people want to work. McCormick's employee retention is five times the average as reported by the American Association of Advertising Agencies. We've worked very hard to create the kind of atmosphere and compensation package to retain our staff, and that has helped build a reputation that attracts talented people.
A challenge for us and other agencies is that clients often demand certain industry experience for a given position. Sometimes good people who are fast learners are not given a chance if they do not have one specific area of experience. In this case, we likely are overlooking some really good talent. However, we do not see a professional shortage in agriculture. If you persist long enough, you'll find the right person for the right job for the right client.
Rhea: To start with, there is a limited pool of talented people who really know and understand our agricultural industry and share the same passion we have for it. In my opinion, we have a professional shortage in agriculture that has been brought about by the consolidation and mergers in our business. Today, there isn't a large pool of experienced workers as the effects of consolidation are leading qualified people into other areas and professions.
To deal with this challenge, we ask our employees to stay networked within the industry. We send our young professionals to career fairs each fall to meet and identify talent. We identify recruiters whom we can trust to know our agency, our client needs and our expectations and who won't waste our time presenting people who don't meet our expectations. We've found that the secret to our success is matching the right people with the right client. Doing this well makes our clients and Rhea & Kaiser efficient. AM