Marketing Failed? You Still Have to Pay.
Marketers often assume agencies and vendors are 100 percent successful on all of our marketing initiatives. And yeah, our reputation is everything, so failure is not an option. If you're like many of us, you do everything within your ability to ensure success. The truth is, no one has 100 percent success every time. Unique situations always present themselves. Maybe your product or service just doesn't have enough value or the condition of the market changed. One thing is certain, unknown environmental factors, regardless of market research, will present uncontrollable variables that affect the outcome for every marketer's goals. It's not often, but it happens.
So what do marketing agencies and vendors do when a product or service doesn't sell? More often than not, we just take the hit. It's expensive, because when we understand what went wrong, we want to help fix it. When it still doesn't work, it's just lost time and revenue because the client expected the marketing to work and it didn't. So how much does it affect our industry? Nearly 6 percent of media revenue will be compromised due to non-paid invoices and it equates to $9.6 billion in revenue losses every year, industrywide. Printing, online advertising, social media, Web design, other direct response—we're all compromised, even the media giants. (The $9.6 billion came from our internal reports and approximations. We researched 10 large media companies' annual reports and 10Ks to establish losses.)
You do have to pay the marketing agencies and vendors you hire, though, even if you don't like the result. Because if you don't pay, those agencies and vendors will start taking steps to make you sign that check. Here's what they'll do:
Step 1: What Do Marketing Agencies and Vendors Do When You Don't Pay Them?
There are a lot of options they can employ to recover their losses. They first need to accept that they have debt, unless they charge 100 percent upfront. If your marketing agencies and vendors don't take full payment upfront, then they need to establish how they want to approach collecting the debt. I've owned an Integrated Marketing firm for over 13 years and used all these options listed below at one point or another in my company.