How Agencies Can Compete Effectively Against Consultancies

As big consultancies rapidly encroach on agencies’ territory, how will agency leaders respond?  As a strategy consultant who recently joined a creative agency, I can attest to how fighting fire with fire can be a winning approach.  In fact, for some agencies, it may be the only path forward. 

I’ve always held a strong affinity to customer experience: I believe that customer value is a core element of any successful strategy. Given we’re in the “age of the customer,” this mindset should be a shared philosophy. And yet, this principle often seems undervalued. At my previous firm, someone who expressed a passion for this would be grouped into a very small practice dedicated to CX. These never-ending groupings with silo-ed ambitions felt limiting. 

I hadn’t considered agency work until I heard about a business design role within an agency’s customer experience design team. This team was recently formalized, but was vastly experienced and had been using CX as a driver for years. They targeted CX transformation projects that resulted in product, service, and experience innovation. The projects focused on optimization and transformation--the latter featuring ideas coined as “Game Changers” that used business model redesign aimed at targeting new markets. 



The team’s experience pitching work and delivering projects highlighted a gap: A demonstrable view of the quantitative value in their capabilities and a business-oriented strategic framework in their approach. This became evident as the business models of consultancies and agencies began to converge. Consequently, increased competition from consultancies, higher expectations from clients, and broader capability desires within the team provided an impetus for the creation of the business design role, luckily coinciding with my expertise and desire for a change. 

Having seen both sides, the competitive threat is real. But agencies can and should differentiate themselves. It’s no secret that consultancies are masters of C-Suite relationships, accustomed to a top-down sales approach. As funding for this work shifts increasingly to CMOs, the presence of consultancies will only increase. Most have experience in strategy and implementation, with a nearly unlimited portfolio of use-cases to show. To gain quick wins and capabilities, they have and will continue to acquire agencies.             

So how can agencies win? 

Thrive on Culture. Although consultancies’ work and scope is undoubtedly impressive, there too lie limitations. Acquiring agencies provides immediate advantages, but the culture and artistic backbone of those agencies isn’t guaranteed to remain, and in many cases doesn’t. Integration can result in a loss of creativity and unique sense of self, sometimes the very value proposition that made the acquisition attractive. 

Conversely, keeping them as separate entities is counterintuitive to the benefit that consultancies are trying to sell an integrated, holistic solution. I encountered this firsthand while working on a project integrating a strategic and digital solution. We attempted using a newly acquired agency for this effort, but the groups were disconnected to the point of discontinuation. After not seeing eye-to-eye on an approach or end-solution, our strategy team resorted to using the original in-house digital resources. 

Leverage Brand and Customer Understanding. One of the biggest deficits of consultancies is the lack of true brand understanding, which should play a prominent role throughout the duration of a client relationship, starting with setting the vision.  This is where agencies have the edge – one that consultancies underestimate. There is an undeniable, deeper appreciation of a client’s identity and its customers. 

Solve for the Needs. The ability of agencies to diagnose gaps and incorporate new mindsets and capabilities will be vital.  With regard to my transition, accepting and adapting traditional, strategic processes to fill a need is welcome to say the least.  

Focus on the Customer. From a functional standpoint, the work that I am doing is very similar to what I did previously--business and operating model transformations in the form of growth and market strategy. The key difference has been the philosophy behind the methodology and a creative willingness to push boundaries. This reinvented approach aligns with the Brand and CX philosophy, allowing for solutions that are closer to client and customer. 

Talent, Talent, Talent. Build efficient, multi-skilled teams and prosper in the diversity of thought. In an agency, I’m now part of a multidisciplinary team with a wide array of skills and problem-solving techniques. Variety exists in larger companies, but is seldom exercised within such close proximity. 

Even as consultancies move to build and buy more agency capabilities every day, I don’t foresee being the last consultant to move to an agency. As our industry continues to change, new roles like business design will play an integral role in our success. To thrive in this new environment, agency leaders must realize and communicate that agencies can do much of the same work as consultancies, better, leveraging the brand and customer as their core equities.


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