Agencies' Big Problem: Smarter Clients

Now that I’ve been in an in-house role at Financial Engines for a little while after many years of consulting, I’ve had a chance to reflect a bit on the changing needs that corporate clients have of the design and innovation agencies they work with. (For the sake of expediency I’ll sidestep the emotions around consultancy vs agency vs firm vs studio and just use agency as a generic term). A significant shift has taken place which many agencies have not yet fully realized or capitalized upon, or recognized the threat it poses if they resist it.

It boils down to this: agencies’ clients are smarter, better, more sophisticated than they used to be, even compared to just a few years ago. It used to be that capabilities like ethnographic research, insight and framework generation, analysis of competitive and analogous products/services/experiences, customer journey mapping, persona creation, rapid ideation and prototyping, and the other stalwarts of agency work, were fairly exotic to most clients. Or if they weren’t exotic, they were at least not given enough time and attention. That’s not the case today.

The main question for clients today is: Can an agency significantly move the state of the art forward for our organization? This is much, much harder to achieve than in the past, and I don’t think agencies have quite adapted to this new reality.

There are several trends at work here: 

Expertise Parity

The methods of design, customer research and innovation have become widespread and largely accepted. Through books, the web, magazines, conferences, seminars, and old-fashioned people movement (myself and almost everyone I know who’s left a consultancy recently has gone to an in-house role), agencies no longer have a lock on the cutting edge of knowledge and methods.

Ideas are No Longer the Coin of the Realm

What I found over the last ten years was that clients had less and less need for more ideas or more insights into customers. If anything, they were over-run with these already and therefore lacked focus and quality. But ideas and insights are exactly the things that agencies have historically promised and built their staffing and practices around. There is an implication, spoken or unspoken, that by working with an agency a silver-bullet idea or customer insight will emerge that will be a total game-changer. That used to be quite easy to achieve, but it only rarely happens today, simply because the bar is so much higher and the client has so many ideas in play already.

Instead what many companies want are ways to prioritize, filter and roadmap product/service concepts, identify rationales for action, frameworks for making sense of the world, and then internal awareness and alignment around those. They need better glue, not more things for the glue to hold together. Today, know-why is more important than know-how.

Getting Things Done

This gets to the issue of seeing things through to market. Especially when dealing with holistic user experience design, it requires a great deal of organizational wrangling and collaboration to bring end-to-end customer journeys and multi-device/channel experiences out to the world. There are so many moving parts and so many things that can go awry from initial concept to delivered experience that it’s impossible for someone on the outside to effectively and cost-efficiently manage it.

I think this is a big part of why myself and so many other people I know have gone in-house: the problems that need to be solved to do great user experience and design work now need to be tackled from the inside.

Additionally, corporate organizations have become more collaborative and less hierarchical (though not as flat as small start-ups or agencies themselves), and this means that more people on the client side need to be involved throughout a project. This puts a major dent in the usual agency fat-free timeline, resourcing allocation, and therefore cost structure.

Many agencies are already providing this level of expertise and service, but only for their largest, highest-billing top-tier clients that get their best staff and the most hands-on relationships. But clients of all sizes and types are going to be seeking this level of quality and engagement. Can agencies scale to meet the challenge?