Moving Beyond Cost: A New Approach to Marketing ROI with David Meikle

Mike Lander (00:09.415)
David, thank you ever so much for joining us on the Higgle, the B2B Sales Club podcast today.

David Meikle (00:24.336)
My pleasure, mate. Nice to see you.

Mike Lander (00:27.143)
You too, again. So we, for our listeners sake, we've known each other quite a bit. We've even done gigs together, haven't we?

David Meikle (00:34.05)
We've actually met in person since we first met. I mean, there were several years went by before we actually managed to shake hands. But yes, we've now actually met in the flesh and kin and we can attest to each other's reality. Yes, we actually are, we're real people. We have performed. We have performed as a duo. We made Morecombe and Wise look like amateurs.

Mike Lander (00:36.627)
We have met in person.

Mike Lander (00:43.475)
We did.

Mike Lander (00:48.723)
We can and we, and we danced on stage together.

Mike Lander (00:57.171)
We have performed.

Mike Lander (01:07.019)
I quite like that. So anyway, before our listeners tune out David, we should probably get into who are you, what do you do and anything vaguely interesting about you.

David Meikle (01:08.296)
Yeah, yeah, we did the.

David Meikle (01:22.03)
So my name is David Meikle. I am an author and a consultant and an intermediary and a trainer. And I operate in the space of the Triangle of Doom, which is created between marketing procurement, marketers and agencies, which I identified as something that was quite problematic probably about 14 years ago and have been working on ever since. So my thesis turned into a book.

called How to Buy a Gorilla, which I published in 2017. And I have recently published another book called Tuning Up, which is about managing relationships in advertising and marketing. And I'm an intermediary. So if a brand, I've been described as a white glove intermediary, i.e. one that goes soup to nuts on the service. So I get really involved in...

Mike Lander (02:11.144)
Hmm.

David Meikle (02:17.97)
in the search, much more like a headhunter rather than a recruiter, and get much more involved in the intermediary process and run sourcing processes and pitches for brands.

Mike Lander (02:23.423)
Right.

Mike Lander (02:35.583)
So you're that kind of person that if there are agency salespeople listening, which I'm sure there are many commercial people listening, you're the kind of person that if an RFP turns up, or rather a brief turns up, it may well have come from someone, either you or someone like you from a brand.

David Meikle (02:53.234)
Yes, I mean I wouldn't suggest that agencies necessarily need to flock to send me their creds because that's not the way that I work. I think there are a lot of intermediaries who spend a lot of time and agency's money with membership fees to just keep up to date with what's going on with agencies and I run much more of a bespoke service whereby we define what it is that the client needs and I go to market specifically looking for that.

Mike Lander (03:03.092)
No.

David Meikle (03:21.314)
and I have my own methods for segmenting the agency market against services, against size, against capabilities and so on.

Mike Lander (03:37.291)
So the editor, quick note to the editor, it's about three minutes 39. Just edit out the pause bit.

Carry on.

David Meikle (03:49.962)
So I don't collect stacks and stacks of creds. I go to the market against a specific brief. And it's a polite way of saying, don't call me, I'll call you.

Mike Lander (04:04.559)
Exactly right, correct. And something unusual about you, David, anything interesting or slightly unusual.

David Meikle (04:11.89)
interesting or unusual, for a number of years I would routinely bribe law enforcement officers, how's that? To put that into a slightly more to put that into what's possibly a slightly more acceptable context, between the ends of 2003 and the end of 2007.

Mike Lander (04:24.659)
Well, that'll be a first then. Ha ha ha!

David Meikle (04:38.986)
I was head of country for Ogilvy Russia. So there's a certain kind of emergent way of working in Russian society, which involves greasing several palms in order to avoid trumped up traffic offenses. So yes, I'm not a UK villain. I'm just a normal, I've just been a normal civilian in day-to-day Moscow, but it does sound exciting.

Mike Lander (04:54.975)
Uh-uh.

Mike Lander (05:09.803)
Excellent. So let's move on from that, shall we? So first question. So we did have a pre-call, probably best. We did have a pre-call and we kind of agreed on three broad questions. So let's start with kind of like the first one, which is talking about investment and risk as opposed to cost and deliverables when you're in that kind of triangle of doom. What do you mean by that and why is it important?

David Meikle (05:14.914)
Probably best.

David Meikle (05:39.586)
So the agency world does itself a massive disservice every time it produces something called a cost estimate for a client because it speaks the language of cost and the cost is something which is undesirable. A cost is much more appropriate for a distress purchase like the cost of a gas bill or the cost of an electricity bill or the cost of council tax. If we didn't have to pay them, we wouldn't want to pay them.

But there isn't a single aspect of marketing down to the floor space that a marketing department occupies that doesn't need to be calculated in what is a overall marketing return on investment. It's not a return on cost, it's a return on investment. And I think that whenever we're talking about costs, particularly with procurement, costs are zeroed in on as, well, that's something therefore that I want to attack.

not something that I therefore want to maximise. And you end up automatically in a conversation about cost reduction rather than investment maximisation. But the other important part of this, and again, particularly in the context of procurement, is that many agencies will have experienced procurement in the context of trying to reduce...

costs or as we're now going to call them going forward trying to reduce investments. But they are often unaware that the other part of the procurement role is the mitigation of risk.

Mike Lander (07:05.395)
Yes.

Mike Lander (07:16.477)
Exactly.

David Meikle (07:16.858)
And this is particularly important when it comes to investments, because marketing investments are like any other investments, like your pension fund investments. It makes no difference which investment you're talking about. If you want to have a higher return from a lower investment, then you have to increase your risk. It doesn't necessarily mean you'll get it because you've increased your risk. But there isn't a way of getting a predictable higher return.

David Meikle (07:43.939)
without there being a higher degree of risk and therefore unpredictability. Those dynamics exist in marketing as they exist anywhere else and it's sometimes helpful to go to the extremes of a scale so that you can kind of illustrate that. So for example, if you will launch a new brand in... Okay, so let's take Barbie as a great example. The Barbie movie is a terrific example.

Mike Lander (07:49.503)
Yes.

David Meikle (08:08.758)
The spend on the Barbie movie in marketing was greater than the cost of the production of the film. This was an effort to make sure that people would go and see this film at the cinema, from the get-go, in very, very large numbers. And it was incredibly effective. But there wasn't a, let's not do that, it looks a bit pricey. It was a, what else can we do? What else can we do? What else can we do?

They absolutely maximized investment because of the surety of a return. You go so far that there's no way people aren't going to respond to this. Now, imagine that they'd spent half. What would have been the risk of the box office being less successful? Imagine they'd spent a quarter. And each time you reduce that, you can see that the risk of the critical mass of excitement not happening.

Mike Lander (08:47.016)
Yes.

Mike Lander (08:55.807)
Yeah, yeah.

David Meikle (09:08.17)
it's clear and any other marketing campaign works exactly the same way. So if you're investing little either expect a little return or go for maximum or go for high calculated risk. But that's not a conversation that agencies and clients have because we don't like to use the r-word. But the reality is the reality but the i mean Peter Drucker said all profit is derived by risk.

Mike Lander (09:28.103)
Yeah, yeah, exactly correct. We don't. Neda, you're right.

David Meikle (09:36.054)
because you're transforming what it is that you have in an asset of money into commodities that you then manufacture into goods in the hope that you'll be able to sell them. But you have to hope that you'll be able to sell them. It's in the future, much like any marketing campaign is in the future. There'll be a number of marketers who know that you can't confirm what the future is going to be from 2019. If ever we should be more attuned to having a conversation about risk, it's now.

Mike Lander (09:36.875)
That's right. Yeah.

Mike Lander (09:51.336)
Exactly.

Mike Lander (10:00.813)
Yeah.

David Meikle (10:05.306)
But it's not a conversation that we have. And we can have that conversation in the context of, well, it's an investment. So yes, you can reduce our fees if you want to, but you'll be reducing our hours. And if you reduce our hours, you reduce the time that we spend finding an optimal strategy. You reduce the time that we spend developing a creative idea. You reduce the time that we spend executing that creative idea to the best of our ability. And if you're capping all of those, then you're responsible for the risk that they create.

Mike Lander (10:05.5)
Exactly.

David Meikle (10:35.026)
If we are determining what is an optimal spend in those areas, i.e. the point of a point before diminishing return on an investment, at what point, if we say this is how much we need for strategy, this is how much we need for creative, this is how much we need for execution, then your ability is to say, so you can do that and you can be confident of our return, in which case you've given the responsibility.

the agency and you've given the agency the circumstances that they asked for to deliver it. So there's a whole thing in there about my latest theme that you might have noticed I've just woven in there Mike which is about responsibility control the subject of my new book.

Mike Lander (11:14.975)
I was going to say very clever that you wrote exactly correct. Your new book, precisely. David, why don't you talk about your new book for a second? Available at all good sellers.

David Meikle (11:22.686)
available exclusively from tuning up available exclusively from tuningup.co.uk but also you can find paperback versions and kindle versions from your Jeff Bezos website so by all means do get in touch if you're interested so thank you for that little plug that little commercial break we managed to crowbar in there sorry mate

Mike Lander (11:38.187)
Excellent.

Mike Lander (11:46.603)
And again, David, we'll make sure at the end you get to also repeat it as well. So that's always good news. I mean, interestingly, on the Barbie movie, I wonder, I mean, there must have been agencies involved clearly. I doubt they were having a conversation about could we reduce, how do I reduce your fee and how do I minimise the amount that we're going to invest across all different types of media. As you say, that's unlikely to have happened.

David Meikle (11:50.53)
Lovely. Thank you.

David Meikle (11:59.296)
Oh yes.

David Meikle (12:13.41)
I would imagine so, but I would also imagine that, I mean, just judging by my own experience of that fully integrated, almost ubiquitous campaign, it probably went beyond the point of diminishing return. And that's because the studio decided we can't afford for this to flop. So I don't care that it's gone beyond the point of diminished return. I want to make sure that this is a success.

Mike Lander (12:28.479)
Yes.

Mike Lander (12:37.044)
Yeah, yeah.

David Meikle (12:39.166)
and they traded off the price for the risk. Perfectly reasonable thing to do. You can do that launching any brand.

Mike Lander (12:45.728)
Correct.

Exactly.

David Meikle (12:49.934)
So I would encourage agencies, as I do all the time, never to use the word cost when they mean investment. And you should change all of your cost estimate left ahead to investment recommendations. And my clients only ever get investment recommendations from me.

Mike Lander (13:00.925)
Yeah, yeah.

Mike Lander (13:07.195)
Now, interestingly, on the investment recommendation, are you talking about both the spend on media or third-party activation and fees or just the third-party media and activation?

David Meikle (13:25.866)
This is when we get into the thorny issue of what many of our American colleagues would call working versus non-working expenditure, where the definition of working is expenditure which has a more predictable return on investment that is more measurable, such as media, discounting,

Mike Lander (13:36.127)
They would indeed.

David Meikle (13:55.854)
activation etc. So I know that sampling, so I know that if I give out 200,000 samples then X is likely to convert and Y is therefore likely to be my return and therefore Z is like to be my profit. So however the

Mike Lander (13:56.775)
Yeah. Sampling. Yeah.

Mike Lander (14:06.545)
Exactly.

David Meikle (14:14.914)
The non-working is therefore the money that's paid to the agency to have an idea that might occupy a piece of advertising space. It is the money that's paid to an agency to develop a brand strategy or an advertising strategy that would create an advertising campaign. And the idea is that a lot of firms have got targets whereby they have a ratio, a desired ratio of...

working versus non-working. Now, there's a couple of problems with that. One is the world has changed massively in the last 20 years in so far as media is now so fragmented that integration and managing integration is a much more complicated, much more difficult process than it was before. So that's problem number one. And therefore the likelihood that it will require more work

Mike Lander (14:47.786)
Yes.

David Meikle (15:14.354)
upfront in the determination of strategy and creative idea is greater.

David Meikle (15:22.217)
Pause the thought.

David Meikle (15:29.038)
Problem number two with the whole idea of working versus non-working is that the effectiveness of non-working determines the effectiveness of working. So for example, and again, if you use extremes to make a point, imagine having virtually zero non-working expenditure and just buying the advertising space and putting...

Mike Lander (15:41.319)
Yes, absolutely.

David Meikle (15:57.494)
please buy Citroen cars, right? So that is no advertising idea, you just buy it so that's the extreme of the scale. So if you if you started to make that copy slightly more engaging, if you started to include an advertising idea, if you somehow dramatized the benefit of that, if you dramatized the benefit in ways that were attractive, if you then had copywriters writing copy to explain why this car is particularly good, if you

Mike Lander (16:01.211)
Yes, just plain text, exactly. Yep.

David Meikle (16:25.61)
put in the time at the front to determine which audience you need to attract, then the content of the working media will become more effective. What that means is that non-working is a multiple of working in terms of the equation. This is something that I published in How to Buy a Gorilla.

Mike Lander (16:38.781)
Exactly.

Mike Lander (16:47.484)
Yeah.

David Meikle (16:50.418)
If X is the content and Y is the media, Z is share of mind. X times Y equals Z. So if you reduce the value of X because you're reducing the value of non-working, you're going to reduce the overall share of mind. And again, that goes back to the whole idea of risk. And when we spell it out in these terms, it's pretty irrefutable. But then the problem that you have is that a lot of the time these negotiations are being had with

Mike Lander (17:13.033)
Yes.

David Meikle (17:19.638)
with people in the room who aren't either responsible or accountable for the return of investment, i.e. a lot of marketing procurement. Now, that's not to say all marketing procurement is evil, blah blah, that's not the case at all. There are some people in marketing procurement who are incredibly good. But I think pretty much everybody who is very good in marketing procurement would say that they represent the minority.

and that most organisations have not yet recalibrated the role of marketing procurement as to managing investments such that actually they often work against the best interests of their own organisations, which is pretty hard to fathom but is the case.

Mike Lander (18:03.175)
And in fact, you know, the WFA released Project Spring a year or so ago, 18 months ago, whatever it was. And Project Spring was all about marketing procurement people saying, and in fact, the strap line was moving from cost to investment. That was, it was all about procurement, seeing marketing as an investment, not a cost. And they're grand words and no one would refute it. But I think as many people have said on many podcasts, you know.

David Meikle (18:10.177)
Mm-hmm.

David Meikle (18:20.182)
Right.

David Meikle (18:29.187)
But you have a...

Mike Lander (18:33.043)
But the reality is, procurement people are still driving cost savings because they're driven by a financial agenda, often reporting to a CFO on short-term shareholder returns. And so the wheel keeps turning. And so it's the fox problem, fox and the chicken problem. They can't help themselves.

David Meikle (18:55.618)
Well, yes, it is. And I think it was Menken who said, it's difficult to get a man to understand something when his salary depends on his not understanding it. And therefore, if there isn't an incentive for marketing procurement to say, hey, guys, maybe it would be a good idea if I didn't do this. Actually, what I should do is be helping you maximize the return on this and mitigate risk rather than trying to drive down investment.

Mike Lander (19:07.933)
Yes, exactly.

Mike Lander (19:22.279)
Yep, exactly.

David Meikle (19:23.114)
That's not going to happen. That's an order or an instruction or a change that needs to come from above. This is a conversation that needs to happen in the C-suite above, presumably, to say, guys, what are we doing? This is nuts. We're actually harming ourselves in the way that we do this. But the other side of this, though, is for agencies to just stop doing what they're doing, which is capitulating.

Mike Lander (19:42.063)
Exactly. Let's.

David Meikle (19:52.746)
at the point of someone in marketing procurement trying to reduce their investment. And that happens, that happens far too often. Well that

Mike Lander (20:00.191)
So this is the, do you want to talk about discounting David? About why discounting is such a, should be a word banned in any agency vocabulary, I believe.

David Meikle (20:14.731)
That's probably in the don't get me started bucket. I mean, I remember, but I'll give you an example. I remember I was commissioned to do a piece of relationship management work between a big financial services brand and their agency, their creative agency that was proving difficult at the time.

Mike Lander (20:21.451)
Go on, get started David, it's always worth a bit of a chat.

David Meikle (20:39.502)
and I wrote up a proposal and I put it into marketing and I met the head of marketing and I met the marketing director, the managing director and they all said yes this looks great, let's go and do this and I said fine, who's going to issue me a PO and I said oh you just have to go through procurement. So I then went and sat down in front of three people in procurement who looked at my proposal and they said okay so

Mike Lander (20:58.482)
Ah!

David Meikle (21:09.454)
um this looks quite expensive um how can we reduce this price this well i can do less it's what do you mean so well the scope's there so you know you tell me what you don't want me to do and i'll do that and reduce the price accordingly but you know you might want to clear that with marketing they said okay no i don't think that's a good idea they said yeah

Mike Lander (21:20.423)
Yeah, exactly.

Mike Lander (21:27.083)
Correct.

Yeah, it's not a problem. Yeah, exactly. You'll get a lower return. Yeah.

David Meikle (21:37.934)
Or you increase the risk of my project not being effective, whichever way you want to look at it. But, you know, I cannot do stuff. And it's your prerogative to say, I don't want you to do this, I don't want you to do it. So that will reduce your costs. No, I don't think that's the way forward. OK, so what more can you do for this? I said, what more do you want me to do?

Mike Lander (21:41.415)
Exactly. Correct. Yeah.

David Meikle (21:59.41)
Well, is there any way that you can add value? I said, well, I can do more for more. If you want me to, if you want to increase the scope, I can increase the scope and I can increase the fee. Yes, absolutely. And I'll increase the fee accordingly. They said, that's not really what we had in mind. We had in mind that you would do more for this period. I said, well, look, let me summarize it for you. So this is the price that I've determined for the job that I've agreed with marketing to do. I can do less for less. I can do more for more.

Mike Lander (22:06.155)
I can charge you more. Exactly.

Mike Lander (22:15.019)
Ha ha!

David Meikle (22:28.382)
or I can do this for this. You choose. And that was the end of the conversation. You just have to hold your nerve because so often you're actually, yeah, you have to be prepared not to bid against yourself.

Mike Lander (22:41.211)
And be prepared. You have to be prepared.

Mike Lander (22:49.591)
Exactly! Don't negotiate against yourself. It's a bad idea. Hopefully the listeners maybe will repeat it. Maybe it's a good thing to repeat. Do not, under any circumstance, bid against yourself. It's a bad idea.

David Meikle (22:50.749)
Hahahaha

Hahaha

David Meikle (23:02.93)
if the opportunity presents itself, if the opportunity presents itself for you to bid against yourself.

Mike Lander (23:07.307)
I'm out.

David Meikle (23:12.374)
Perhaps turn it down.

Mike Lander (23:15.547)
including reverse auctions on your fee.

David Meikle (23:18.118)
Oh, that's another don't get me started bucket. Reverse auctioned. I mean, the thing is, and this is another thing for agency negotiators to catch up on. Procurement has strategy and it has valid, reasonable, effective strategies in buying. So there's a guy called Kraljic who created the Kraljic Matrix.

which is something that I also refer to in, in how to buy a gorilla. And if nothing else, you'll find it there, but you'll find it online. And essentially what Kraj... Thank you. What Krajewski said was, if you can define clearly the value or the quality standards of the thing that it is that you're buying, and you've got a high amount of buying power.

Mike Lander (23:57.003)
By the way, good second plug, well done.

David Meikle (24:15.898)
then you should negotiate the hell out of it. So that's a perfect, perfect example for, for an online auction. So if you're online auctioning, because you're buying volumes of concrete to the standard that's measurable and it's checkable, then all you're doing is you're moving the seller's profit to the buyer's profit at no risk. But if you're doing that for an investment, it's the most insane application of

Mike Lander (24:31.615)
Correct. Yeah.

David Meikle (24:44.498)
any kind of buying tool that you can imagine. So sorry, rant over, rant over.

Mike Lander (24:48.071)
I would agree. Correct. Rant over. Excellent. Well, given that we've got about six minutes, David, because I'm expecting your time, and we've got two questions, should we move on? No, no, no. I took us off course. So, can you touch briefly on the role of intermediaries in the pitch process?

David Meikle (24:52.238)
Thanks for watching!

Ah, sorry.

We should.

David Meikle (25:10.898)
Yes, I mean this is an interesting one.

David Meikle (25:17.09)
I struggle with the intermediary market as it mostly exhibits itself because I struggle to see the total impartiality when so many of them charge fees from the agencies in order for the agencies to be considered. And it's come up so often when I've approached an agency and they say, okay, yeah, and how much do you want?

And I have to say, well, actually, it's only the brand that pays me. Agencies don't pay me because then I would have a conflict of interest. So I think the role of the intermediary has got to start from a place of impartiality. Now, having said that, many listeners might know that, you know, I've done consultancy work and training work for many agencies.

Mike Lander (25:50.994)
Correct.

Mike Lander (25:55.859)
you'd have a conflict of interest. Correct.

David Meikle (26:12.566)
So how do I square the circle of impartiality as a base camp if I take money from agencies for consultancy and training and then represent brands in search process, of which some of those agencies have appeared? Well, the answer is that at the beginning of the process, firstly, I tell the brand, X agency bought this from me at this value on this year. So it's a declaration of pecuniary interest.

Mike Lander (26:36.767)
Correct. You disclose it. Yeah.

David Meikle (26:42.894)
that it's called. I have no obligation to them because they bought the service for which I then provided and the contract was closed, the project was finished, there's no ongoing project or contract. And the second is that I tell the agencies. So if an agency's in a competition and they're down to, you know, it needs to get down to the final three, I don't go across ten agencies saying everybody that I know and everybody that I've worked with.

But I do say that if you get down to the final three, I will make it absolutely clear that some of these agencies I may have worked for and I will tell you who they are. And I've done that in the past. And agencies are entirely comfortable with that. But I think you should be more comfortable with that than being shepherded into a pitch process because it's your turn to have a go in the hope that you might convert something that you're not suitable for.

Mike Lander (27:20.756)
Exactly.

Mike Lander (27:37.318)
Yeah, yeah.

David Meikle (27:39.682)
because you're paying an annual fee and the annual fees are not small. So I think there's a standard that needs to be applied to the intermediary role that I think is currently woefully absent in many intermediaries' MOs. So I think that's the first point. And the second point is that as an intermediary, you have to really think about what it is that you're trying to solve.

Mike Lander (27:45.032)
No, no, exactly.

David Meikle (28:09.41)
finding an agency which has just got a famous brand or has done, that's the one that did the this campaign or that's the one that did that campaign is that's the one that effectively solved problems the likes of which you've got. And therefore it's about it's about identifying agencies that haven't got a ideally that have got a proven record of having the brains still in the agency that have solved problems similar to the ones that you've got.

Mike Lander (28:23.306)
Yes.

David Meikle (28:38.446)
I hear a lot of complaints about pitch processes through intermediaries, not through intermediaries, and a lot of claims that the pitch process is broken and so on. You don't have to spend long in a brand's shoes to know that if you awarded an agency a contract without a pitch and the campaign failed or something went wrong, drastically wrong.

and somebody asked, so how did you pick this agency? You said, well.

kind of, you know, I just kind of went with them. It was a gut feel. Exactly. So there's a certain governance that one has to have. Now I use it again, an extreme to make a point, but at the same time, um, for example, you can have agencies that are clear are the only ones that are, that are going to be able to, to solve a job. They are so good. They are so well differentiated.

Mike Lander (29:14.623)
Met them in the pub one day. Seemed like nice blokes. Yeah. Seemed like nice people.

Mike Lander (29:24.767)
Yes.

David Meikle (29:40.758)
Yeah, you don't necessarily need a pitch for that if you've got the authority on the client side to say, no, we don't. A nice analogy for this is architecture. So Norman Foster is probably my favorite architect, right? Steve Jobs needed a new HQ in Cupertino, California. So he rang up Norman Foster and said, I need your help. There was no pitch process. It was, who's the very best architect I can think of? I want him.

Mike Lander (30:05.171)
Right. Yeah, yeah.

David Meikle (30:10.47)
That's winning without pitching. That's brilliant. Absolutely no need for any intermediary, no need for any search and so on. Likewise, when he went back to Apple, they were in the process of a procurement process. This is the videos online of this, of him saying, you know, we've got 11 global agencies lined up for this business and he just threw it all out the point of TBWA. I know that TBWA can do this. That's who we're going to go with. I'm going to go and work with them. And that's when the Think Different campaign came out.

Mike Lander (30:42.559)
Uh, yes. Yeah.

David Meikle (30:43.651)
To go back to architecture for a second, Norman Foster also did that amazing suspension bridge in the south of France. And they will have invested an awful lot of money in surveys and technical plans and drawings and costings in order to put together a proposal for something that was an order of magnitude more expensive than any of the competition because it went from ridge to ridge across the valley instead of across the valley floor.

Mike Lander (30:56.371)
Yes.

David Meikle (31:12.414)
So they were asking the people running the process to find multiples of what they had in mind, but at the same time, they won. Now, that's competing in a pitch process with a differentiated proposition, and that's what agencies need to do. So I don't think the age of pitching is gone, and I think there is a role for intermediaries, but I think there are a lot of actors in this space who need to pull their socks up.

Mike Lander (31:23.231)
Yes.

Mike Lander (31:43.607)
I would agree, entirely agree actually. So, last question. So in four minutes, three minutes, four minutes, it's a big question, but are agencies, or only pick out the really important bits, exactly. Are agencies going to be, every other word, are agencies gonna be stuck selling time?

David Meikle (31:56.418)
I'll speak at double speed. Ha ha ha!

David Meikle (32:04.466)
I will. Every other word.

Mike Lander (32:12.447)
forever. We've talked about this a lot.

David Meikle (32:15.101)
Um...

David Meikle (32:18.558)
Yeah, I mean, as a consultant, I'm in a similar space. I think, again, this is something that I've resolved on my business with the use of the responsibility and control paradigm. So what I tend to do is, because I tend to get projects, so if a project comes to me, I'll price the project. Let's say for argument's sake, I've priced the project to 40,000 pounds. Now, if someone says, can you break that down for me? I say, well, I can break it down for you, but I don't know why you want me to.

breaking down because you know it's a hole and this is how much it costs so it's not like any of the any of the component parts are then negotiable because I need the flexibility between these there's a degree of unpredictability that I've had to manage and aggregate to get this price okay well what if we wanted to pay you by the day

Mike Lander (33:00.64)
Correct.

Mike Lander (33:08.139)
And again, a key point here, menu-based pricing, again, is the devil. On the whole, menu-based pricing is a disaster. Going to Woolworths and buying, you know.

David Meikle (33:18.839)
Yeah, I mean, I think so.

I think so, and I want to come to that in a second. The point that I'm getting at though is that if a client says, well, actually what I'd want to do is pay you by the day and then reconcile it, well, you can do that. But if I go over, then it's on you.

Currently if I go over then it's on me and the risk is on me and if I go under then the risk is on me as long as long as no one moving goal posts but if you want me to do it by the day and my estimation is under which it most likely is then you'll have to pay the difference and that usually closes that usually closes the conversation with agencies I would do a similar sort of thing which is

Mike Lander (33:47.58)
Exactly.

David Meikle (34:12.17)
We have a scope of work, we estimate that scope of work, and what I've run very effectively before is it's not the charging by the hour necessarily, it's the reconciliation of hours against the unpredictability of what it is that's being done. Let me gather my thoughts here for a second.

David Meikle (34:37.374)
If you try to productise agency services as an antidote to charging by the hour, so you're saying it costs X for a brand strategy, it costs Y for a TV campaign, it costs Z to make a 30 second TV commercial, it costs A to make a 60 second TV commercial, or write a TV script, you can break that down as much as you like. All that's going to happen is that the more agencies do that, the more of a field of comparison there will be for procurement to pick up. The answer to improving margins

Mike Lander (35:04.907)
Correct.

David Meikle (35:07.174)
is differentiating your quality and your ability to deliver a return on investment. And there isn't a way around that because all you're doing is shifting the thing that the buyer is going to be able to compare. What you have to do is take the ability to compare off the table by being sufficiently differentiated or being so expert as to say, well, why would we possibly do that? I mean, it works similarly to benchmark.

Mike Lander (35:32.907)
Absolutely.

David Meikle (35:36.47)
benchmarking another don't get me started bucket but benchmarking is a great example so let's do a survey of all of these agencies account directors and we'll take an average and let's say the average is 20 you know is a hundred pounds an hour they charge for it for an account manager or an account director fine so why are we paying more than a hundred pounds an hour would you want an average can't director you

we can just hire average people and put average people on your business to give you an average result. Why should we be hitting an average? You've selected us because we're not average, you've selected us because we're the best for your map. So of course we're not going to hit benchmarks. Benchmarks are for the average. That means that there are people who are much more expensive than that and there are people who are much less expensive than that. The average is a hundred pounds an hour. So the whole concept of benchmarking...

Mike Lander (36:07.281)
Exactly.

Mike Lander (36:12.971)
Correct.

Exactly.

David Meikle (36:31.242)
and price comparison in that way is nuts. However, if we say, we estimate it's gonna be this much money, then all of the hours responsible for delivering what it is, is up to the agency. And the recording of hours becomes an internal agency tool to make sure that you're not over-investing where you don't want to be over-investing. And making sure that some clients are profitable, or that sufficient clients are profitable.

Mike Lander (36:55.719)
Exactly.

David Meikle (36:59.794)
I've worked on pieces of business and agencies that made crashing losses, but the reputational benefit of having that piece of business far exceeded it. So there are two sides to it. A hundred percent. So it's an internal tool to make sure that you're making money. It's an internal tool to make sure that if you're losing money, you know where you're losing it and by how much. And it's an internal tool so that, so that you can allocate resources in a way that is

Mike Lander (37:08.219)
Exactly. It's an internal tool. Absolutely.

David Meikle (37:29.09)
vaguely sensible. But charging by the hour isn't going to go away. Reconciliation and differentiation such that you can improve your margin is the way forward as far as I see it.

Mike Lander (37:43.667)
Yeah. So, on that note, David, it's been a pleasure having you as a guest. In fact, it's been amazing. It's been a lot of fun. It's always fun. Exactly. Honestly, David, I love having our conversations because it's, yeah, I have to try and keep up mentally sometimes, which is always great. So you challenge my thinking, which is fantastic. Where can people find out more about you?

David Meikle (37:49.871)
That's always fun. Always fun. Always fun chatting with you, Mike.

David Meikle (38:06.326)
Don't worry, you and me both.

David Meikle (38:11.42)
Thank you.

Mike Lander (38:13.219)
And where can they buy your new book?

David Meikle (38:16.09)
My new book tuning up my new book tuning up is available at shoot tuning up bike it's shooting up is available shooting up is available shooting up co.uk where you can get the hardback if you want the digital version you can get it from Amazon you can find out more about me and what tuning up is and Responsibility control and you can try your own diagnostic to determine how well your relationships are running

Mike Lander (38:19.419)
Yes, that's the one!

Mike Lander (38:34.379)
Very good.

Mike Lander (38:42.667)
Ahhhh

David Meikle (38:44.362)
That's also on the website and free of charge. And you can find out more about me and How to Buy a Gorilla and what I get up to at www.htbag, standing for howtobuyagorilla.co.uk. Mike, it's been an absolute pleasure to join you this afternoon, what a lot of fun. We need to do this much more often.

Mike Lander (39:04.915)
We need to do it a lot more often, David. I thoroughly enjoyed it. Thank you ever much for joining us.

David Meikle (39:09.528)
Thank you.

Mike Lander (39:11.251)
So stay there and I'll just turn the recording off. What it should say now.