Marketing Procurement

Sink or swim:10 key points to navigating Quarterly Business Reviews with your agency partners without drowning

Taking the plunge

There’s no need to dread your agency QBR; disciplined preparation might be that lifejacket you are looking for

Anyone on the client or the agency side will remember their first QBR (Quarterly Business Review). Unless you are adequately prepared, it feels a bit like getting ready to jump into a pool without knowing how deep the water is nor how high the diving board.

No need to panic. QBRs are now fairly common practice among brand advertisers. Given the strategic importance of the work performed by all agencies across the marketing ecosystem, advertisers have a vested interest in meeting on a quarterly basis to review how the work is performing, discuss resources, and make decisions that will impact the remaining fiscal calendar.

This includes not just media, where over the past decade or so advertisers have rightly paid much closer attention to the relationships they have with their media partners, but now with additional focus on other disciplines such as creative, production & digital.

So why are QBRs so important?

There are several benefits to implementing solid quarterly business reviews. These advantages range from promoting positive client/agency relationships to preventing risk of deterioration in the partnership by spotting early warning signs.

Advantages

Here are some of the many advantages of QBRs in more detail:

1. They provide a measuring stick

A well-defined performance versus plan analysis will provide both sides with a solid understanding of where they are on their respective journeys to help drive brand awareness, sales, revenue, and profit margin and how the marketing budget is helping influence these critical factors.

It will empower the agencies further when they are equally invested in or accountable for certain shared metrics. Ultimately, quarterly business reviews allow a client and agency to track mutual KPIs, meaning both parties have a clear understanding of their performance against the target at all times.

2. They track overall success metrics

QBRs should include KPIs and value metrics that track and measure business performance year-to-date, including updated timelines, budget allocation reviews and a realistic “scorecard” that marketing procurement teams can refer to that reflect everyone’s expectations.

These can cover a multitude of areas such as agency evaluation scores, performance incentive tracking, planned versus actual media savings, SOW reconciliation and scope creep, burn rates & staffing allocation, and DEI tracking versus goals.

3. They solidify client/agency relationships

QBRs should highlight successes to date and map improvements that can lead to greater growth. This will show the Agencies how their contributions support the client’s business strategy, goals and objectives and that there is a mutual desire to look for new opportunities to drive additional return on investment.

4. They allow clients to spot early warning signs

QBRs make it easier to identify and prevent agency dissatisfaction before it occurs. This is because regular conversations help clients pick up on negative agency feedback, so any problems can be rectified before the relationship comes to breaking point.

QBRs can therefore be used as an early-warning system to detect any problems in the account with clients asking agencies for regular feedback, allowing time to address problems that may have arisen.

Whether you represent the client or the agency, you need to make sure the QBR is run effectively and results in a mutually positive outcome.

Next step

Here are a few steps to consider:

1. Establish a prescriptive schedule to avoid fire drills and to make effective use of time
   Process rigor is critical, because there is a considerable amount of time and effort required to conduct a quality agency QBR. Having a firm date and time that is unlikely to be rescheduled by any of the critical stakeholders involved ensures that these meetings happen at the optimal time to be effective.
2. Provide adequate structure to cover all relevant topics
   During QBRs, client teams and their agencies are coming together at the pre-set time to step back from the daily work and to reflect on how the work is progressing against stated objectives.

Key agenda topics include reviewing the financials to ensure those are on par with expectations, and identifying opportunities for improvement in the working relationship that can be acted upon in the following quarter. To accomplish this, a detailed and rigorous agenda is required.

3. Make sure that the right representatives on both sides are attending

It may sound obvious, yet too many agency QBRs are held without the right client or agency stakeholders in attendance, seriously compromising the value of these meetings. Agency QBRs are the ideal opportunities to assess the work, prioritize resources, course-correct where needed and make important decisions.

These decisions must be made by those with the right level of seniority to see them through. Compromises or trade-offs may be required, and decisions made may have significant business and financial impact. Not having the right decision makers in attendance is simply wasteful.

4. Ensure you dedicate enough time for discussion, Q&A, and action planning
   No matter how rigorous and comprehensive the agenda, significant value from these meetings is often gained from discussions that may not naturally fall into one of the regular topic areas. By dedicating ample time for open dialogue, participants can address immediate opportunities or concerns, and agree on what actions must be taken.
5. Request or distribute reports and pre-reading well ahead of the QBR

To make effective use of the time, it’s preferable to have the client teams read the various reports prepared by their agencies in advance of the meeting to facilitate these discussions. For example, the Agency might send a reconciliation report of actuals vs. budget on scope activities, FTE utilization, as well as other financial reports.

If the reports show the Agency is burning resources at a higher rate than anticipated, then some type of corrective action must take place. Often this leads to a deep-dive conversation about the rationale behind this anomaly, and can result in scope reduction, budget increase, or resource reallocation. The meeting should be spent exploring these scenarios and recommendations, and not on spotting these issues in the first place.

6. Start every QBR by reviewing progress against action plans agreed to in the prior quarter.
   Since QBRs happen on a regular basis, each meeting is an opportunity for both teams to hold each other accountable for delivering against prior commitments. Once an action plan has been agreed upon for a particular quarter, the subsequent QBR must start with a review of the status of these commitments.

For example, how many have been successfully completed, which are still work in progress, which are on hold or have been delayed and why. Starting the meeting with a short review of these action items and their status sets the right tone for a partnership that must be anchored in mutual accountability.

Overall, marketing procurement teams, given their relationships with critical stakeholders, should be the catalysts in making QBRs happen and therefore ensuring that a regular cadence is established as best practice across the marcomms supply base. The prerequisite should be a consolidated overview of all major categories of spend, and critical agency partners’ contracts therein.

It is now imperative therefore, to apply the same rigour previously supplied across media to the creative and production transactional supply chain, highlighting non-transparent areas such as out-of-scope fees or hidden margins through third parties.

Ideally, fit-for-purpose contracts should ultimately focus on:

• Identifying all related parties and binding them to the same obligations and transparency requirements as signatory agencies
• Adding end dates and reviewing work in progress regularly
• Specifying remuneration versus pass-through costs and keeping these separate
• Crafting clauses for specialisms
• Instituting a Work In Progress ledger where third-party costs are a major part of the budget

In summing up, agency QBRs must be part of the rhythm of the business, so they flow naturally in support of the larger set of objectives a brand advertiser has set for the company.

QBRs are an essential part of the agency management governance construct and without these productive discussions the work and relationship is likely to suffer over time. It becomes a vital exercise of setting and resetting ongoing expectations as well as relationship fine-tuning.

Ready to take that jump? There’s no need to dread your agency QBR; disciplined preparation might be that lifejacket you are looking for.

About the author

Bruno Gralpois is Author/Speaker, Thought-provocateur, Client/Agency Guru, Entrepreneur, Innovator and Co-Founder and Principal of Agency Mania Solutions