This is an excerpt of a recent iMedia column by The Relevancy Group’s VP of Services, Chris Marriott
Last month I formally joined The Relevancy Group, whose founder and CEO is David Daniels. David’s been following the ESP landscape for years, first as an analyst at Jupiter and then, following its purchase by Forrester, he was the brains behind the periodic Wave Reports that ranked the various ESPs.
One of the key reasons David and I came together was our shared belief that, more than ever before, marketers can benefit from the experience and advice of email veterans from both the seller and the buyer side as they evaluate their existing vendor relationships and explore new ones. One of the things David and I enjoy talking about are the ways the ESPs and clients can see some things so dramatically different. Oftentimes these things put strain on the relationship and over time lead to a break down in the relationship.
As in any relationship, sometimes it’s easier to hear about these disconnects and ways to address them from unbiased third parties. So, in the spirit of just about any issue of Cosmopolitan, this month we’re going to look at four ways ESPs and clients can improve their relationships.
Client: I love my team, but…
It’s become conventional wisdom in the world of technology that over time the cost of delivery should drop. I don’t know where this idea first originated, as the cost of almost everything else goes up over time. Certainly the fight for market share can be a factor in the downward pressure on fees charged to clients.
Those who follow me know I often rail against the race to the bottom for CPMs in the ESP world. But I know that’s not going to change until they hit rock bottom (sometime next week). So marketers, your ESP isn’t going to be too surprised when contract renewal time comes around and you ask for price concessions in return for a contract extension. But what is going to drive your ESP completely out of its mind is when you add, “We really like the team you’ve assigned to our business, and we want to be sure they continue on our account. Oh, and by the way, we’d like a 10 percent reduction in the blended rate we pay for their time.”
You like your team? Well it’s highly likely that your ESP also likes your team a lot. After all, you’re a very important client that the ESP would like to keep happy. This means it probably has had to give your team raises over the term of the prior contract. And this has already eroded the margin on the ESP’s service fees. Now you are asking the company to cut its CPMs and, at the same time, cut the margin it makes on its people. Perhaps the ESP can find efficiencies of scale in its platform. But it can’t in regards to its people. If you want to pay less for your team, don’t be surprised if you end up with a new team of recent hires.
Read the rest of this column.