Marketing and communications agencies are facing pressure to drive revenue today. They need their employees to pursue new business, and new revenue from existing clients, aggressively.

However, according to many agency leaders I’ve spoken with, they are often not seeing the level of activity they need from their people.

Let’s assume for a moment that these employees are not inherently disinterested in bringing in business. When we put ourselves in their shoes, their passivity may be a result of how their incentives look from their perspective.

Don't Fall in Love with Your Own Messaging.

Agency leaders, by definition, believe in the power of words to shape beliefs and behaviors. Employees need to understand and believe in the vision, mission and strategy to deliver them. However, no communication will motivate an employee to take an action against their perceived self-interest.

Whatever you say, employees are also listening to what you pay.

Four Ways Agencies Demotivate Their People.

Too often, agencies unintentionally disincentivizing the behaviors that the company needs. Let's explore the four blind spots in marketing agency compensation.

1. Big Effort, Little Reward.

When you’ve invested in hitting a goal, it’s demotivating to learn that reward doesn’t match the effort. True incentives must be tied to measurable results, including goals, metrics and proportionate rewards. And, critically, rewards should accelerate, not decelerate, as contributions increase. There’s no way around it: if people don’t perform, they will need to make a little less…

2. Trying to Keep Everyone Happy.

Agencies often spread rewards too evenly. Since the size of the pie doesn’t expand with leadership’s altruism, trying to keep everyone happy often makes the strongest performers the least happy.

If you are focused on retaining your best people, but you are spending almost as much to try to hold on to everyone else … consider getting real about who you can and can’t afford to lose, and structuring compensation accordingly.   

3. Asking Everyone to Do Everything.

Agencies often expect senior employees to wear every hat—developing business, managing client relationships, delivering projects, and leading teams—diluting their focus and energy. Employees may scatter their effort or focus on tasks they’re comfortable with, not what the business needs.

Empower leaders by narrowing their priorities and personalizing goals. Manage your talent less like Supermen and Superwomen, and more like a team of specialists who are contributing – and rewarded – according to their areas of strength.

4. Keeping Decisions in a Black Box.

Employees need clarity to succeed. Ambiguity around expectations, performance metrics, and reward structures breeds confusion and resentment.

Many leaders avoid getting too specific about the criteria for compensation decisions beforehand, preferring to treat everyone as individuals or prioritize their own discretion. There are often good reasons to avoid "formulas," particularly in creative industries. However, treating compensation as a "black box" is like asking someone to play a game without telling them the rules. If you want to incentivize behaviors, you simply cannot do so without communicating how the “game” works.

Where to Start: Gaming Out Compensation Change.

Do you suspect your agency may have blind spots in its incentives? (It’s ok, we all have blind spots! Compensation structures are breeding grounds for them.)

This is your largest operating expense. It should incentivize behaviors that make leadership’s life easier, not unintentionally undermine growth.

The good news is, after you peak under the proverbial rock and identify those blind spots, you are half-way to moving past them. Since compensation missteps are so common, if you know where to look, we know how to design backwards to sidestep them and ensure you’re steering your people in the right direction.

Once you know what “game” you are in, you will know how to change it.

When you view incentives as a game, powered by behavioral economics and game theory, you can build smarter, scalable incentives that optimize motivations and spending.

Curious what I mean? Feel free to play around with our Gaming Compensation Change tool here. Then, book a meeting with me, Tim, to start gaming out compensation at your company.