ROI of Insights | Relationship with Agency

Agency Involvement a. How to Make ROI the Glue that Binds your Agency Relationships 123

To misquote Shakespeare: “To insource or “Last year, we had a strong return on the investment outsource” that is the question. Whether it is more in Insights as we were able to save 10% of our effective to use your own headcount resources to budget by conducting these projects ourselves.” undertake activities or more effective to outsource This statement does not tell the whole truth. It them? might have been the right decision from an ROI This is an important consideration for all Insights perspective (i.e., the team had the idle resources to leaders today. take on the projects), but it might also have caused Having spoken to numerous Insights leaders on this a negative ROI. For example, as our team had to topic, it is clear that there is no consensus on this manage x more projects the team were unable to matter. spend as much time on understanding the business issues and making recommendations for action to The matter is complicated by the fact that often the decision-makers on other important projects. project budget and headcount budget are not held Another consideration is that we have spoken with by the same person and are not subject to the same Insights leaders, who informed us that before in- rules. It is therefore difficult to switch flexibly between sourcing, their team previously had to spend a lot of the two. time briefing agencies and re-doing agency work Having said that, we think it is important for Insights so that they are now more efficient by bringing the leaders to approach this decision with “eyes wide project management in-house and actually freed open”, and in order to do so, they need to gain a up time by doing this. This obviously tells its own good understanding of both the spend budget ROI story about the challenges of creating a healthy and the headcount budget ROI. client-agency relationship, but that’s a subject for another handbook perhaps. What we do not want to see is the following ROI of As we said at the beginning of this section, there is Insights statement: no straightforward answer to this question. What

is important is that every Insights leader has a clear to forecast/measure ROI, and be clear with the understanding of the insource/outsource options and reporting needs you have. the real costs vs. opportunity costs involved in each You also need to be crystal clear on the decision. dissemination tools you are going to be using on We recommend doing a separate ROI analysis of your each project. team’s time use using a proper hour-rate equivalent; Demand that your partners, in turn, specify in their your CFO and his team can help you here if you don’t proposal how their solution will deliver the ROI, know it. Once you know the real cost of DIY, and the as well as the data to enable ROI forecasting/ opportunity cost of doing that versus other activities, it measurement. is easier to make a comparison to the outsourcing costs and make an informed decision. Reporting Ensure that your partners deliver on the proposal How to Involve Your Agency and report the data and insights in ways that feed Partners in ROI Measurement into your dissemination process, and feeds into your ROI reporting process as well. RFQs / Proposals In order to ensure that your partners design research “I’m very open- in an appropriate way- with all our projects that not only deliver a strong ROI but allow you to report on that ROI, you need to be business data with them. So, KPI and things like as transparent as possible with them about the that, ultimately, if that’s proving whether something business objectives, as well as the ROI objectives has worked or not, the brief, the response from the for the project. In particular, you should inform your partners agencies, they have to know that to build the right about the surrogate variables you intend to use blend of methodology to get us to that answer.” Head of Insights, Consumer Services

“You know what agencies are like. They’re either project-based, in which case they’re based on the project, and then once it’s done, it’s done, goodbye – have a lovely time… and then the continuous agencies, like our tracker for example, they’re just more about getting us the data each month, and then saying bye-bye as well. So, yeah, never had the conversation ever.” Head of Insights, Consumer Services Benchmarking/norms Annual Review – Learning/ In many cases, norms can provide a good measure Budgeting of ROI. In testing research, for example, the norms data can be used to show that Insights has helped When conducting an annual review with your key create something, an advertising campaign, for agency partners ensure that you have a section example, which outperforms the norm. dealing specifically with ROI covering, for example, As a minimum ensure that your agencies create the following questions: norms databases for all repetitive-type projects. • Which projects delivered a strong/weak If they can bring in external norms data, this is ROI, why? also very useful to give perspective and show the • How should these projects be improved to C-suite that your work in contributing to help your deliver a stronger ROI? company be better than the competition on key • On which projects has measuring the ROI activities. been a challenge? Why? Make sure that your agencies provide granularity • How should these projects be improved to in the norms database. As a simple example: If allow for better measurement? you are testing advertising aimed at attracting new • What are we missing? How could the customers, you are going to want to compare your agency’s services which you are currently campaign test scores to similar ads. not using be of value to delivering ROI?

Rewarding creates a strong client-agency partnership, making It’s a truism, but in business, you usually get what sure that both client and agency sit on the same side you measure and how you reward your partners is of the table, working together on the joint objectives important. of: Can you build a payment/reward system that Ensuring Insights has a strong impact on the recognizes the importance of ROI? And rewards business partners for delivering a strong ROI to your business? Ensuring Insights budget grows to meet the growing In this way, ROI can really become the glue that demand for their services