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Ladies and gentlemen, welcome to the Uncensored Renegades. This is the 20 minute podcast where Cory Marchisotto and myself tackle one big question every week. I hope you enjoy this. Now, if you are enjoying it, I've got one request to make. We're putting this out on the current Uncensored feed for a limited time only. So if you're enjoying it, go over to Uncensored Renegades, hit subscribe and never miss an episode. Anyway, without further ado, let's get into it. K boss, we're back.
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What's up?
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A
What's up?
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We're here. We're doing the thing. Are we still doing the thing?
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We're still doing the thing.
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B
All right. I love it.
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All right, so listen, the one thing I want us to fix in this episode, a constant tension point, and there's always division and there's always arguments on either side, is the relationship between clients and agency. Like, we've all been in those positions. It can be a source of inspiration and it can be a source of tension. And there's lots of kind of extra energy around what makes a great relationship and what makes relationships go bad. And there's lots of evidence, actually that sustaining relationships over a long period of time actually leads to better work as well. So there's a business case to be made for why you should invest in your client and agency relationship. So I'd love to pick your brains on when it works, when it doesn't work, and what's the one thing that people listening can do?
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So you started by saying versus. And my philosophy is it's not versus, it is force multiplier. And it starts with alignment between the agency and the client that you're going after a win win. And I feel that way about a lot of things, including recruiting new employees to your company, hiring agency partners. It should actually be treated the same way. And when you bring in an agency, don't treat them like a service provider. Treat them like a member of your team. The more exposure they have to who you are, how you operate, what your team is, what you're up to, what is the context of the things that you're doing in the broader world outside of just the assignment that they're given, then you are in fact setting them up for success. So I'm going to give you a perfect, for example of how things go wrong and then how you can fix them to go right. When I started ELF seven years ago, there was an agency that was already working for the company for a couple of years. And I asked the marketing crew at the time. Show me who all of our agency partners are and then write them, tell me where they are. Are they a five out of five? Are they three out of five? Who's staying, who's going? Who do we need to go get more of all the things. And it was highlighted to me that our PR agency was very low scored and should be, we should be looking for a new PR agency. So I started to probe around and ask some questions about, well, what, what is it about this agency that's not right? And they were just saying, well, they, they just can't deliver good work. They, they're just not on top of their game. They're not getting us the kind of coverage that we're looking for. So I took all of this feedback and I invited the founder of the agency out to dinner. So here I am, a newbie in the business. I am on my listening curiosity tour. So, so I sat down with her on dinner and I said, tell me how things are going with Elf. And it was incredible how I heard the exact opposite. So there was a clear difference between how the brand was feeling about the agency and how the agency was feeling about the brand. So I started to ask some very specific pinpointed questions which included the tell me the tools that you've been given to do your job. And it was absolutely mind boggling to me that they didn't even have a marketing calendar. They had no line of sight to what was even coming a month from now, two months from now, or three months from now. How is a PR agency supposed to pitch stories and build relationships with any type of media if they don't actually know what the brand is doing? So that was a really important moment for me not to fire the agency, but recalibrate the relationship and teach everybody that was in my organization how to set up an agency to actually win. So for an agency to do their best work, you need to ask what are the conditions necessary for me to set up the agency to win? And that I think is the biggest difference because most people treat their agencies like I give you a brief, you provide me with whatever insert thing here, a commercial, a package design, a whatever it is that you're looking for. Whereas I see it as a brand is a living, breathing organism and there is an entire ecosystem that is necessary to make that brand humor. And if my agency partners can actually work together in an integrated network, then we've just infinitely force multiplied our power. So how do I set them all up to win individually and then even further and more importantly, how do I set them up to win as a collective?
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You talked about not having a calendar and you talked about not having a brief. And in addition to those two things, actually something I found is super powerful is when you invite them into the business problem as well, early. And that can change everything. I know a few years ago I was working on Lucasabe, which is the biggest energy drink in the uk. We were facing a huge disruption with the sugar tax implementation and we lost something like 20% of our buyer base and our sales overnight. It was a huge crisis. We went all the way up to the Tokyo Stock Exchange. It was announced, you know, so the weight, the world was on my shoulders, the team shoulders. And there's two things you can do in that situation. You can kind of push the pressure down onto the agency and be demanding, or you can invite them in and say, actually we're going to work together as one team on this. And we decided to do the latter. And it was actually inspired by Gavin, actually a friend of mine at one of our PR agencies we were using, he said, think about this as a presidential campaign, right? Imagine that you've got to win the election and the elections in 90 days time. Who do you have to convince? What's the message? What has to be true for you to succeed? How do you get the number of votes in order to, you know, to win it? So, and then create the cabinet mentality which is, we're all the same party and you know, the common enemy is this. And we're gonna, we're gonna all agree together what the actions, messages and outcomes are gonna be, right? So we had this, we call it mission control in the end. But I got my most trusted agencies together every single week. We had our mission control meeting in person. We went to the research groups where we, where we tried to sit down with our consumers and understand why they were using, reacting negatively to the change. We signed off everything, even if it wasn't the particular thing the agency was working on, whether it's a positioning or the strap line or the media plan, we looked at it collectively. So it didn't matter if you were the media agency or the PR agency, you fed back. And what was amazing about that was not only did everyone feel ownership for the total outcome, but people were creating value on things that wouldn't naturally be their responsibility. So the PR person had a brilliant point of view on media choices. And I thought, oh, I wouldn't have thought that before, because just taking a PR lens on a media plan or the media Agency had a great point of view on the creative idea about where it could achieve the most. And by doing that as well, you can make decisions as a whole and you see the whole rather than see the part. And then the other thing which I think you kind of alluded to, there is, it creates a sense that there is no verses, that actually it's only together and you kind of win. You know, you win and lose together. And I remember very vividly actually, like we motored through the relaunch that we were doing, we made incredible progress, come up some really powerful ideas and we sold it all in together where it started to unravel. Actually when we got into implementation, we dropped back into the old habits of then go into your lane for the execution. I wish I'd kept the mission control idea of all collectively doing it. So I think that would have been better. But yeah, getting everyone in early at the problem stage I think was a huge difference. Certainly in that example you said the
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word lane and that gives me hives. I don't believe in lanes. I think when you create lanes, you don't get cross functional pollination. You don't get an agency that understands you have a problem way over here that they're not even involved in, but they know it exists and now they can offer ideas on how to solve it. So I actually prefer to operate in a borderless condition between brand and agency. And some practical use cases for that are we have some agencies who come to our bi weekly town halls. We invite agencies to our holiday Christmas parties. We have our agencies inside our house on some of the most important moments. And there's a couple of reasons for that. So even if I think about this major event we just did at the New York Stock Exchange, which for most people to ring the opening bell would be a once in a career opportunity, even if they were able to get it, because most people never even get that. So if you do get it, it's certainly a once in a career opportunity. We invited the agency partners to join us on the floor who did the work to help us achieve it. So it's not just about you provide me a service. I pay you for said service. It's no, it's your work too. You have ownership of that work and I want you to see your work actually come to life. And guess what? I'm also going to give you credit for that incredible work that you did for our company. Because when we win, we win together. And a lot of the agencies that I consider my right, left hand for me there's no difference between my agency partners and my employees. None, Zero. And they will all tell you that if you interviewed any of them, they would say, she treats us like a member of the team, good, bad or indifferent. Which means that they are also operating in what we call high performance teamwork. And the same tenets of mutual accountability, healthy conflict and passionate relationships applies to them too. Our one team, one dream philosophy applies to them too. They are an extension of who we are and how we show up in the world. And when I started with a lot of these agencies, we were all way smaller than we are today. And in fact, we're growing up together. So if I think about one of the agencies that we've been working with for TikTok for since I started seven years ago, Movers and Shakers, it was two people, the founders of the agency, when we did our first mega campaign together. Today they have over 100 employees and they're part of the Stagwell network. So they got acquired. Our media agency, Tinuity was 100 people when I started working with them seven years ago. They're now 1400 people. So when you grow up together in this world of win, win, my win is your win, your win is my win, you multiply your impact out there in the universe and you do it together. And one really beautiful story I want to share about that is our partners in China. So we do a lot of manufacturing supply chain in China. We've got an incredible GM over there. She is my superwoman, woman of all superwomen. Her name is Fanny Hsu. And Fanny's been navigating a network of suppliers for over 10 years. Same story. They grew up together. ELF was really small at some point and it was 100 million and then it was 200 million. And there's a big difference between 200 million and where we are today, which is 1.6 billion. That could be life changing for a company that is working together with us on that supply chain. So when Covid hit, obviously almost everything shut down. Manufacturing shut down. Boats couldn't get on the water, you couldn't even get your goods on the water. Which then shut down pipelines and supply chains and all of the things, and especially in China, they had to quarantine. And our suppliers chose to quarantine in the factory because they didn't want to let ELF down. They volunteered themselves. They said, we are going to set up beds and showers and ask for volunteer employees. And the employees, it was voluntary. We are going to to be on lockdown in the Factory so that we can continue to deliver for this company that has changed the lives of us, our families, our community. And I was in tears just thinking about that. And there was such a strong moment of recognizing that this was never about a transaction. This was about people building each other up and generating real game changing disruption that was not only changing business performance, but changing their lives. And it's just very special when you think about how you navigate people, because at the end of the day, agencies, clients, it's people. And if you make human choices and you lead with humanity, you're going to build long standing relationships where quite honestly, people will die on a sword for each other.
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That's an incredible story. You said that when we win, we win together. The real test is when you fail, do you fail together? And I think that's probably what maybe a lot of agencies listening recognize that situation is when the brand starts hitting hard times or a campaign doesn't work out as well as you think, or there's a PR backlash, then what happens is the agency then blamed for the result of something you then decided to get. I mean, you told me an example recently, a crisis you were facing on your brand where you could have chosen to kind of throw the agency under the bus, but you did the opposite, didn't you?
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We did the opposite. And it was a pain I was feeling in my heart as we were navigating through a crisis. And I had it in the back of my mind is, how are the people who created this campaign feeling right now? How is my agency partner feeling right now, who we work together with blood, sweat and tears to actually create a body of work? And when you're going through that moment, you have a lot of other things that you have to contend with. And I just kept coming back to, but how is my team at the agency? Because I was with my, you know, my direct team every day going through the motions. And I called the founder of the agency and I said, please assemble your team tomorrow. And I think her immediate reaction was, we're getting fired. And I could sense in her voice that something didn't feel right. And I said, let me just be clear here. I want to wrap my arms around your entire team and give them all a giant hug. And she started crying. And I said, please assemble the team tomorrow. I want them to understand very clearly that we're all in this together. And I got on the call with them the next day. The entire team was in tears. And the fact that I went out of my way to take the time to Tell them that none of us intended for this to happen and that they were part of the team just as much as anybody else was part of the team. And we produce hundreds of campaigns and most of them are absolutely exceptional and brilliant and incredible and they're responsible for that work. That this moment in time was not one for them to beat themselves up about. It was a moment in time for us to take the learning as a stepping stone to do incredible work the next time around. And they had all said to me that they've never had a moment like that before when something didn't go as intended and somebody actually took the time to sit down with them and actually thank them for not only doing the work. Whether or not the work hit market the way it was intended or not, it was still a labor of love for the people who created it. If you think about artwork that hangs in a gallery, not everybody loves it, but the artist put their heart and soul into that piece of work. And there are humans behind the work that goes to market. So it was an incredible moment of humanity. And this is what I would really advise everybody in a position of an agency client relationship to think about, which is how do I set them up to win and how do I make sure that we are all in this game together? We win together, we fail together, but most importantly, we learn together so we can make incremental progress.
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I love that final point, especially because in that situation, basically in both situations, the China one and that one, the loyalty you've created is almost priceless. You almost can't put a value on what that loyalty will mean to your long term relationships. The ideas they come up with, the work they do, the extra mile they go to when the next crisis happens. But the really important point which you added on there is they've you together, but they and you have learned something in this crisis. We learn so much more in crisis. And if you had fired the agency and come up with a new one, coming with a new one, that new agency would not they might have been able to understand what happened, but they wouldn't know actually how it felt or really what happened. And therefore, the cost of losing that insight and that learning is huge. And I think that's the mistake people make. They would rather politically find someone to hang than they would actually benefit from the learning, the loyalty and the lessons that are gonna carry them forward. And I think it takes and well, credit to you because I think it takes brave leadership to go. Do you know what? This is not the moment we apply the blame this is the opposite. This is the moment where actually we learn and benefit from it.
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Well, you had an amazing quote at one of the podcasts we had taped earlier where you said, be tough in victory and gentle in defeat. And that really sticks with me because you're probably surrounded by a lot of high performers and high performers are putting head, heart and soul into every project they do. If there is a defeat, there is nobody that is beating them up more than themselves. That is not the moment for you to step in and make it harder or make it worse. For sure, they're already doing that themselves. But I think there's another thing, just metaphorically that I think about very often as trying to put a brand in a different context. And if you think about a brand like a museum, because I do think brands are like museums, what color do you paint the walls? What does the architecture look like? What art is hanging on the walls? And all of the work that comes out from a brand is essentially on display in a gallery. And you may like some of the pieces that are hanging on the wall and you may not like other pieces that are hanging on the wall and each one is an expression of what the brand represents. And I live with an artist, so I know very well and I lead creatives at elf and creatives are wildly passionate about the work that they put out. And if you are working with incredible creatives and doing the kind of work that we do at elf, and obviously there's a lot of really beautiful marketing work out there in the universe, it's because people have a real passion, it's coming from inside of who they are that they're putting out and they're pouring everything into it. So think about it. Think about a brand like a museum and you're walking through the gallery.
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I should just say this one thing as we close as well. In my day job system one, we actually went to the effort of working out the cost of changing your agency. So we looked at award winning work over a long period of time, I think it was over about 10 years. And we actually recorded how consistent the work was, how many times the agency were changed, how many times the brief changed, how consistency the strategy was, how consistency the account teams were. We broke it down into lots of constituent parts and basically what you the summary is the consistent ones with the long term relationships. Every year the creative got better and the return on that creative got better. The ones that the more frequently they changed, it flatlines. Because what happens is it's almost like going back down to base camp. You kind of slip down, back, and you have to work back up. And you slip down, you work back up, and. But the consistent ones with the consistent relationship outperformed everybody else. So this stuff matters, right? It's not just about having a warm feeling about the relationship you got with your agency. This is about business.
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That's right. And when you think about what as a conductor, right, a CMO or a business leader, you're almost a conductor, and you've got lots of different instruments, and you could either have a cacophony or you could make beautiful music. And if you think about everybody as an integral part of creating a beautiful piece of music that everybody wants to listen to, it changes the way you operate the relationship.
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It does. So the one thing in this episode,
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the one thing, is treat your agency partners like they are a member of your internal family.
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There you go. So, from Corey Marchisoto, myself, thank you so much for listening and watching to Unsense and Renegades. We genuinely, genuinely hope that you enjoyed this conversation. Now, we do have one little request. We would love it if you could leave us a review. Reviews are so important to other people discovering this show. So wherever you get your podcast from, go and drop us a review. We would really appreciate it. Thank you.