Poor interaction and personal chemistry lead to change of agency

Finnish marketing and communications agencies lose customers mainly because of poor interaction and cooperation. This is revealed by the survey titled “The Agency of the Year 2018”, conducted by the Swedish firm Regi Research & Strategi AB.

“This result differs from the results from the other Nordic countries. In Sweden and Norway, communication and cooperation with the marketing or communications agency were not a decisive factor for the change of partner,” Regi’s CEO Pia Grahn says.

In Finland, price is the second most important reason for changing partners. According to Grahn, this is related to communication difficulties and the fact that cooperation is not measured in a way that is accurate. This leaves the customers unaware of what to expect for their money.

In Finland, a partnership with an agency lasts four years on an average, after which the customer often feels the need for a change.

“In Finland, a wish or need for a change is the third most common reason for changing the agency. In most cases, the partnership has lasted for a number of years, and the customer may feel that the resources have been exhausted,” Grahn says.

Grahn leads the Swedish firm Regi Research & Strategi AB, which conducts the annual survey titled “The Agency of the Year” or, in Swedish, “Årets Byrå.” In the autumn of 2017, almost 5,000 Nordic customers of marketing and communication agencies participated in the survey. Of the participants, 905 were from Finland. Finnish customers assessed a total of 56 agencies in seven categories: large and small advertising agencies, media agencies, communications agencies, marketing technology agencies, customer understanding and experience agencies, and brand and design agencies.

Finnish decision makers more satisfied than before 

The majority of Finnish marketing and communications customers are fairly satisfied with the services they buy from the agencies. In the autumn of 2017, only 16 % of respondents reported having contemplated a change of service provider in the last 12 months.

Grahn observes, “The year before, the percentage was 20. In other words, every fifth Finnish decision maker was thinking about changing their partner agency for marketing or communications. The figures have since improved in all the Nordic countries, which is a positive phenomenon.”

According to Grahn, larger agencies are more likely to lose customers than small agencies.

“Customers often find larger agencies’ prices too high. Also, customers often feel neglected by the larger agencies. Smaller agencies perhaps provide more personal service.”

Customers change service providers most often when their contact person in the partner agency changes. According to the Regi survey, as many as 29 % of respondents would change service providers if their contact person changed.

“For Finnish customers, personal chemistry is one of the most important criteria for choosing an agency. The agency’s commitment to the customer is also extremely important. This is an interesting phenomenon: instead of being an indication of the agency’s competence, it reflects how the agency works and interacts with its customers,” Grahn notes.

More potential for measuring

What should agencies do to avoid losing customers? According to Finnish respondents, the most important development areas include setting and measuring goals.

“Here I see a direct link to the discussion about the agencies’ price levels. If clear goals have not been set or measured, the customer will have difficulties understanding what the agency has done, how it has succeeded, and what the customer has paid for. In a situation like this, cooperation can be almost impossible,” Grahn says.

Measuring also involves the fact that agencies need to show that they can bring a competitive advantage to their customers. Moreover, customers require agencies to show greater digital competency.

“This is a common trait in all the Nordic countries: all agencies – design, media, and marketing communications agencies – should invest in digital know-how. What digital know-how means for different customers is another question. We will find out about this in this year’s survey,” Grahn says.

Data for “The Agency of the Year 2019” will be collected starting in September 2018. The results of the survey will be available in February 2019 and marked by a gala celebrating “The Agency of the Year 2019.” The survey will be conducted in Sweden, Finland, and Norway by the Swedish firm Regi Research & Strategi AB. The Finnish marketing partner for the survey is Alma Media, and the research partner is Norstat Finland.

Read more about Regi’s “The Agency of the Year” survey at www.aretsbyra.se/om-arets-byra/in-english-please (in English) and www.vuodentoimisto.fi (in Finnish).

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