Transparency is the key to building relationships and a solid business

by Guest Author on August 27, 2010 · 0 comments

As part of the ongoing guest bloggers series on Holistic Search, Rob Weatherhead – Operations Director at Latitude Express explores how transparency within the search marketing sector is key to ongoing success

The market for agencies offering search engine marketing over the few years has become increasingly cluttered. Many moons ago when I started on the search marketing career ladder there was very little competition and the number of serious search marketing agencies could be counted on one hand. Since then the market has changed significantly with web developers, hosting companies, media agencies and a growing lists of specialists all competing for the UK’s search marketing budgets. It sometimes seems like each time you speak to a prospect you are faced with a new competitor, somebody you have never come across before, and the list continues to grow.

With this increased competition comes the inevitable focus on price and the margins available for search marketing agencies have been significantly squeezed as competition has increased. Clients have started negotiating harder, and the dreaded procurement team are now a regular participant in the pitch process. On top of this, increased competition puts a natural pressure on agencies to lower or discount their fees in order to secure business.

In this situation I have seen a lot of agencies reducing their fees, sometimes to ridiculous levels, just to win some new business. This approach however does nothing but devalue the services being provided, not just for the agency in question, but the whole market. It also puts the eventual winner of business (assuming they went lowest) at risk once they have to actually deliver for such a low fee. I hate to think how many search contracts are out in the market which are loss making for the incumbent when the maths are done.

I’m pretty sure this trend cannot continue (at least I hope not!) and that competition, and market pricing, will level out. And whilst improved efficiencies, processes, and technology may mean agencies are able to offer services for less, this will not simply be done blindly in an attempt to win new business. But this will only come if the agencies learn that winning loss making business isn’t a long term strategy, and clients are educated and open to the value of the service provided.

Key to this transition is transparency and understanding. If agencies provide transparent pricing models which are built on logic and facts, allowing clients to understand exactly what they are getting for their money, then everybody will be better off. Clients understand more about what they have paid for, and just as importantly, what they haven’t. Whilst agencies can ensure that they are charging a fee for their services that they are comfortable with by providing a “menu” of services and associated costs, thus allowing the client to get more, but at an agreed rate.

And through this level of transparency and understanding you will also foster a greater relationship. Once everybody can see, and is comfortable with, what they are getting from a relationship then on the whole, they will be happier. Non transparent pricing with unclear deliverables are a thing of the past and have been the downfall of many a client relationship, the future is transparent, and the sooner agencies wise up to this fact the better it will be for everyone.

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