Opinion

Beyond Mad Men, and more than DM, the next stage is customer engagement agencies

nick mercerNick Mercer is the head of Australia-based agency MercerBell. He went to New York recently to understand how the next generation of agencies are shaping themselves as customer engagement agencies, combining direct, digital, data, technology and consulting. As a result of what he learned, he now plans to change his own agency, which handles MasterCard across the region.

I’ve just returned from a New York study tour. We are on the cusp of major changes that will affect what agencies look like over the next few years.

Last year, Forrester published a research paper that reviewed and defined an emerging agency category they named Customer Engagement Agencies (CEAs).

A typical CEA needs to have expertise in direct, digital, data, technology and consulting. Many of the top US CEAs have acquired smaller specialist businesses to enable them to offer this broader range of expertise and services.

I wanted to find out more about CEAs, and determine whether this report was going to help shape the agency of the future. Was it simply another buzzword or was there more substance that meant we were seeing a new breed of agency?

We decided the best approach was to go to New York and talk with some of these CEAs. I set up meetings with the top 15 CEAs, and to get a more rounded perspective, I also met with recruitment agencies, journalists and clients.

What I found I believe will not only shape MercerBell’s growth and expansion but will apply to many agencies of the same genre, namely agencies with their heritage in direct and data. There is a change imminent and the agency of the future will be almost unrecognisable from that of the Mad Men era.

This new approach for agencies such as ours needs a new descriptor and new language. Our belief is that Customer Engagement or Customer Experience Management (CXM) captures the philosophy and promise agencies will build their expertise and skills around.

My conversations in New York were quite wide ranging but some key trends were clearly driving the growth of these agencies. I believe these translate directly to the Australian market.

Many clients are now seeking more skills and expertise from their agencies but don’t believe their advertising agencies can deliver on this. They don’t believe ‘advertising’ is their most potent tool to grow their businesses. While they still believe in the power of a great creative idea, before creative is even a consideration they are seeking a more scientific approach, and agencies which have the ability to interpret customer data. At the same time they don’t want to have to deal with multiple specialists; they simply don’t have the time or the manpower.

Most agencies can now deliver on ‘digital’, so just being a digital agency is not enough anymore. Marketers now need greater knowledge of marketing technology, ranging from CRM technology to social media, data and dashboard reporting. To help marketers bridge this gap CEAs are providing marketing technologists to offer ongoing advice and help in this space.

Another key trend that has so far been slow to take off in Asia is the addition of consulting expertise to agencies. The top CEAs in the US all have CRM Consultants, Technology Consultants and Data Strategy Consultants. The larger agencies also now have Management Consultants to provide more upstream business advice not only related to marketing.

The US is, not surprisingly given its size, awash with customer data and the corresponding companies providing data services to aggregate both first- and third-party data sets. The more sophisticated companies are using real-time data analysis to serve content and display advertising through web connections.

Interestingly, mobile as a channel in the US seems to be at the same place as in Australia, with most companies realising all digital assets need to work across all screens. One of the growth areas for mobile is greater innovation in the retail space whereby companies are using mobile to complement the in-store experience.

The language used by marketers has also changed over the last few years as we move from campaign-based solutions to platform-based dialogue programs. Clients are asking for customer acquisition programs, customer advocacy and retention programs.

When you pull all these trends together, the biggest overall marketing trend we are seeing is the renaissance of CRM. No longer is this paper-based mail programs, but sophisticated data-driven programs that deliver tailored content across multiple digital channels. In a networked world the ultimate communications solution has to be CRM based.

mercer bell customer experience

Now is the time for agencies to change. We need to deliver a broader suite of expertise and skills which are focused on customer acquisition, growth and retention. To do this, and for clients to believe we are listening to their needs, we are changing.

While it used to be enough to deliver a customer response, what matters most now is not just engagement, but creating a positive customer experience.

It’s for this reason that MercerBell is evolving into a Customer Experience Agency. We believe this is the best description, both for what our clients seek and for who we are.

Nick Mercer is CEO of the MercerBell Group. He was previously GM of M&C Saatchi Direct in Australia

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