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Mr. Rich DelCore

P&G’s Sales-Based Compensation & BAL Model: How Can This Strategic Approach Be Applied to Other Agency-Client Relationships?

In a 4A’s Webinar, P&G’s Rich DelCore and Cindy Deihl, along with Saatchi’s Jane Wagner (BAL-IAMS), discussed the expanded P&G sales-based agency compensation approach and the “Brand Agency Leader” model for driving brand growth by facilitating IMC strategy and planning.
 
P&G discussed alignment of interests geared to drive superior business results over time by embracing the following core principles:
  • Value Definition: focus on superior business results rather advertising or execution.
  • Degree of Unification: a single compensation budget and strategy planning process.
  • Relationship Structure: long-term relationships and compensation based on value and results.
  • Degree of Flexibility: ability to shift resources, funding and metrics among integrated disciplines.
  • Holistic Brand Building: integrated master planning, a brief for each initiative.
  • The Benefit of One: one check, one brief, one cohesive message.
  • BAL (Brand Agency Leader): coordinates all agency partners, “seat at the table” for all agencies, shared rewards for brand success.
  • P&G Franchise Leader: approves BAL, partners and final creative, rewards all agencies based on brand revenue.
We’d like to know what you think about P&G’s approach to brand building, agency relationships, value-based compensation and integrated marketing communications.
 
Do you plan to explore a “P&G-type” strategic approach with any of your marketing services relationships?
 

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Powerful Alignment of Incentives

Congratulations to Rich DelCore and his team at P&G for pioneering yet another impressive innovation in agency compensation. Not only does this approach recognize that agencies should be paid for the value they create rather than the hours they work, but it’s a powerful alignment of incentives between P&G and their agencies. Both parties are working to “grow the pie” rather than worrying about who gets the biggest slice.
Posted by Tim Williams, Ignition Consulting Group (Thursday, June 25, 2009 6:24 PM)

Align Incentives and Hours Don't Matter

Rich DelCore of P&G and Sarah Armstrong of Coca-Cola are revolutionizing the pricing strategies of their respective agencies, one of the first times in commercial history where the buyer is changing the business model of the seller. If agencies refuse to undertake this change, larger clients will impose it on them. We hear endlessly that value-based compensation "sounds good in theory" but is not practical. Well, that's hokum. P&G's and Coca-Cola's models are indeed theories, but so is hourly rate x hours = price. The difference is, P&G and Coke's is a superior theory. To all the naysayers out there, take a hard look at these two models, as they pave the way to a better future for agency compensation. Stop saying it can't be done. It is being done, across all professional sectors, from accounting and law to IT and consulting firms. Clients are looking for value, not inputs, efforts and hours. These two models explicitly understand that the agency/advertiser relationship is not zero-sum, but rather an opportunity to create ever-increasing amounts of wealth based on a relationship of trust and mutual profitability.
Posted by Ron Baker (Friday, June 26, 2009 11:31 AM)
 

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