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Relying on third parties to deliver agency services

Most agencies depend on vendors and contracts to help provide at least some of the results that their clients expect.

Any time you rely on these third parties, you need to consider what happens if they don’t deliver as expected.

As more agencies consider using AI tools like ChatGPT to deliver services at reduced costs or shorter timeframes, these dependencies pose an even greater risk if they fail to perform as expected.

Chip and Gini discuss options, including having fallback plans or making clear to a client that results are contingent upon that other company or organization doing their part.

Resources

Key takeaways

  • Chip Griffin: “You need to have a backup plan and/or you need to be entirely transparent about being reliant on a third party and make sure that the client understands the implications if that is not available.”
  • Gini DIetrich: “There are great opportunities, but understand what the risks are and protect yourself.”
  • Chip Griffin: “Be careful about proposing something to a client that is hyper specific in writing. Make sure that you’re putting together more of a generalized plan, that you then work with them over time to consider.”
  • Gini Dietrich, on the client having direct relationships with vendors: “I’m not the bank, so you have the direct relationship. You pay them directly and we’ll happily use it on your behalf.”

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And today we’re gonna talk about relying on third parties, something that Gini has a lot of familiarity with because of a nice little Christmas toy she has right after this.

Gini Dietrich: Everybody get to see the tamagotchi now, right?

Chip Griffin: Some people would be satisfied with having their own kid they had to take care of . For some reason, Gini has now gotten roped into taking care of a pretend child. I do not understand this for the life of me. Do you want to listen for, for people like me who have never heard of this thing?

Gini Dietrich: I don’t know how you’ve never heard of this, because this was, this was popular when your boys were little.

Chip Griffin: Have you met me, Gini? Have you met me? I don’t know all sorts of stuff.

Gini Dietrich: You have children!

Chip Griffin: I have boys. They do not want to pretend to have a baby. They can barely take care of themselves let alone some little electronic toy.

Gini Dietrich: So my little one got a tamagotchi for Christmas, in her stocking, and she can’t take it to school. So every morning she comes and hands it to me and says, thank you for babysitting. And so I take care of the Tamagotchi during the day, and then when she gets in the car, when I pick her up, I hand the Tamagotchi back and she takes care of it for the afternoon and evening.

Chip Griffin: Okay. Yeah, that’s, um, that sounds like way too much fun for me. Yeah. I guess for, for those of us who were old enough to remember the days before technology, this was, you know, when you used to have to carry like an egg or something?

Gini Dietrich: The egg, yeah. In high school. Yeah.

Chip Griffin: Right. So you would, you would learn what it was like to take care of a child.

So you would never, ever have a child in high school because I mean, you can’t just chuck the egg and get a new one. Right. I mean,

Gini Dietrich: I mean, technically you can.

Chip Griffin: Yeah, I was joking. I was being sarcastic. All right, but your daughter is relying on a third party to take care of her little doodad. Yes. During the course of the day.

Sure. Agencies frequently rely on third parties to deliver services to clients. Yes. And we’ve seen this for years and years, whether that’s subcontractors or partnering with third party vendors. We’re also seeing it a lot now with things like ChatGPT, where people are saying, I can deliver faster and cheaper content because I’m going to use ChatGPT to help deliver those services.

So I thought it would be helpful for us to talk about when you’re delivering services that you don’t perform yourself or independently and you’re reliant upon a third party individual, vendor, service, software, something like that. And how do you handle it to make sure you don’t get into trouble with your client if perhaps that service fails to deliver or isn’t available when needed or has some other problem like you’re, you’re servicing a crm and the CRM has some outage. Right. How do you, how do you protect yourself in working with your client? So I’m curious, you know, what, what’s your advice to someone on relying on any of these third party services for delivering services to clients?

Gini Dietrich: Well, you know, you should have a backup plan for everything. And I, a really good example of this is we were starting a new podcast for a client, right when Elon Musk took over Twitter and they had wanted to do a Twitter, do the podcast via Twitter Live. And as we all know, Twitter kind of hit rock bottom a little bit there in the beginning, and, every time we tried to do Twitter live, it wouldn’t, it wouldn’t work. And so we had to pivot pretty fast. And so we, you know, well then we were like, well, should we do Facebook Live? Should we do LinkedIn live? And finally we were just like, let’s not screw with the live piece of it.

Let’s just do a podcast that’s pre-recorded. But we had several things to fall back on be when, while that was happening, it was a little bit stressful, of course, but, we had something to rely on. And I think the, the challenge in this is twofold. Number one, if you’re using third party vendors, it’s a little bit harder to have a fallback on, you know, for instance, if you’re redesigning a website for a client and you’re using a third party for that, if they don’t show up, it’s, it’s kind of a problem.

That’s why I always like to have three or four different firms in our roster to be able to, to fall back on. But the other part of that fold is you, and you mentioned ChatGPT, I think a lot of. organizations and a lot of human beings are saying. Well, I can have ChatGPT write the first draft of this content or maybe the final draft of this content.

And I don’t, I don’t have to pay a human being to do it. I don’t have to pay an employee to do it. And what we’re finding are a few things. Number one, ChatGPT is not always available. It keeps it, it’s always down. It’s always tough to, to log in, especially when you need it. And so when you’re relying on these kinds of things, you have to be careful that you have something to back it up in case it is down or it goes out of business or whatever it happens to be.

Chip Griffin: So I, I think what you’ve talked about there is absolutely critical. You need to have a backup plan and/or you need to be entirely transparent about being reliant on a third party and make sure that the client understands the implications if that is not available. So for example, with ChatGPT and I don’t mean to beat on ChatGPT yeah, I do kind of actually a little bit.

Yes, I do because I, I, I think ChatGPT as we’ve talked about previously, has a lot of promise. I think that that people are going to the two extremes right now where they either hate ChatGPT and they’re like, oh my God, this is going to destroy me. Or they’re like, oh, ChatGPT is great. Now I can do all of this other stuff and I can do it much cheaper, and all that kind of stuff.

And it, it’s, the truth is somewhere in between as is with most things, yes. But if you’re going to rely on something like ChatGPT you either need to do things early enough where you can fall back on having a human perform it or let’s say you’ve got a client who says, Hey, you know, I’ve heard about this ChatGPT, I don’t understand why we can’t create all of this content for the new website much more quickly, much less expensively.

And you might say, yeah, we probably can do that. What you need to do though is say that we’re going to do it at a lower rate, dependent upon the availability of ChatGPT. Right, and, and if ChatGPT, for whatever reason becomes unavailable either because the service is down or because they go to a paid model and the paid model doesn’t make sense anymore, whatever it is.

In that case, I would encourage you to be entirely transparent upfront, particularly if it’s something that’s causing you to give the client a discounted rate. Yes, yes, yes. Never ever eat that yourself. Now, if you’re doing it just behind the scenes and you’re not being transparent, now, it’s on you. Now you just need to make sure that you’re not so dependent on ChatGPT or some other service that if it is unavailable, you cannot deliver on time and within budget.

Gini Dietrich: Yeah, I think that’s, that’s critical there is relying on it and not being transparent. So you know, there, there have been a few scenarios. I talked to somebody last week who said, oh my gosh, I’m using AI well ChatGPT to create all this content for a client, and I’m not, and I’m charging them what I normally would.

And I was like, good for you. I mean, that’s good profitability. And he goes, except, yeah, the site’s been down for two days that I can’t deliver on time. And I was like, oh, you, that’s, that’s a problem, right? . So you have to, you have to have a backup plan. You have to carefully balance. And you have to make sure that you have access to it because, I mean, there have been a couple of times where I’ve went to just to play with it and it’s been down, and so I can’t imagine having to rely on it to get my work done.

That would not, it would not work well at this point.

Chip Griffin: Right. And, and I’ve seen a bunch of people say, well, you know, I’m not, I’m not too concerned because they’re gonna come out with a, a subscription model soon. And so that will, you know, eliminate that because they’ll obviously have to be stable for that.

Sure. Perhaps. But is that pricing still gonna work for you? You have no idea what their pricing model is going to be. Right. And, and while I suspect it’s not going to be prohibitively expense, I’m in no position to guarantee that. Neither are you. So if, if you’re going to rely on it, you need to be prepared for, it may not be what you’re looking for.

And this is not, I don’t want to just harp on ChatGPT because this is for other things as well. I mean, you mentioned if you’re relying on someone to help you build a website and back in the early days of, of my first agency, I did a lot of subcontracting to people to do web design and other graphic design type work.

One of the things if you’re doing that, is you should always have a reserve of additional contractors that you can tap into in case one flakes out. Yep. Because I will tell you from my experience, the graphic designers, they’re kinda artsy and you know, I had one who liked to go surfing in the middle of the winter, and so, you know, if, if the waves were up in New Hampshire in February, he might not be available on any given day.

Most of the time that’s not a problem. And he did great work. So, you know, I kind of lived with it. There was another guy who lived on an island and sometimes he just decided not to answer the phone or anything. It was a problem. So I tried to have a network of of other people that I could fall back on.

Gini Dietrich: Yes, yes, yes, yes.

Chip Griffin: And you always want, I mean, it’s same thing with writers, right? Yes. Writers. I mean, a lot of agencies contract out to writers. And in that case, it’s less about them flaking and more about them just not perhaps having availability when you need them to have it. Right. And, and when you spec things out for your client, you don’t know exactly when you’re gonna be asking them to produce a piece.

So they may tell you as you’re putting the proposal together, sure, I can help you with that. But then three weeks later, they’ve got a big book project that they’re working on or something and they can’t step in and help you with the ebook you were looking for, or the blog posts or the op-eds or whatever.

Right. And so you need to make sure that you’ve got a plan. And a network that will allow you to fix these things so that if you’re not being transparent with the client, they never know anything happened.

Gini Dietrich: Yeah. It’s, it’s critical for sure. And you know, we, I think we all rely on third party. I mean, we certainly do in my business as well. You know, I’m going through a process right now to find a web form for a client, right. And we’re going to be relying on them to, to do that work. But yeah, like , I’ve also had the experience where web and graphic people have flaked on me and never to be heard from again. So there’s also that experience, that you, you know, you just have to be really careful to protect yourself, understand that there are risks to it.

There are great opportunities as well, but understand what the risks are and protect yourself.

Chip Griffin: And I mean, you also need to think about it particularly where we’re in a space in a time where everybody’s interested in the cutting edge, whether it’s ChatGPT or Twitter Live or Clubhouse, right? If these are core, if, if any cutting edge platform technology tool is part of your proposal to a client, understand what you’re gonna do if, if things change, right?

If you, if you put together a one year Clubhouse plan a year ago, what’d you do in month six? Right? Or really month two. Once it was pretty clear that, right? Yeah, people were interested in the party line for about six weeks and then they’re like, yeah, why am I doing this? Yeah, this makes no sense.

And so you need to be thinking about, and it’s one of the reasons why you should be careful about proposing something to a client that is hyper specific in writing. Make sure that you’re putting together more of a generalized plan, that you then work with them over time to consider. You have the quarterly planning process that you use with many of your clients.

Yep. Yep. That’s a great way to make sure. Because things you’ll have a better idea from quarter to quarter, which tactics are likely to work and what new service is out there that you can use and what new service fizzled already and isn’t worth spending time on. So, so make sure that you’re being flexible in what you’re telling clients that you will do, so that you don’t get in a box where a client says, wait a minute, you proposed a year long Clubhouse plan.

You’re not doing that. Bye-bye.

Gini Dietrich: Right. I mean, it goes to what we talked about last week about RFPs and the procurement. You know, if you’re working with an organization that has a procurement department and you’ve put together a statement of work or, or a plan, they expect that that’s what you’re going to do.

And if you’ve put in there, in your statement of work that you’re going to do Clubhouse for a year and it no longer exists or is no longer functioning in a, in a way that that drives results. You can’t say to the procurement department, well, it doesn’t exist anymore. They’re like, but you wrote it down in here for a year and we expect that you’re going to do it because they’re so literal, tend to be. And so you have to be really careful about those, those kinds of things.

For sure. I mean, it goes back to my Twitter live thing. We just said, we’re going to launch a podcast and we’re going to try new and innovative ways to promote it. And it turned out that the live piece of it didn’t, didn’t work for this client. And so we went, we, we had the flexibility to be able to go to pre-recorded sort of what I’d call the more traditional route.

Chip Griffin: This is also why if you’re using third party services, you may want to think about working with the client to have them have a direct relationship with the vendor. Yes. Yes. Rather than going through you. Yes. So let’s, let’s use the example of say, a, a CRM like HubSpot. Do you want them to, do you want to have the HubSpot license and the, the client pays you?

Or do you want to work and have HubSpot directly have a relationship with the client? That way if HubSpot screws up, The client gets to yell at them and not yell at you, who then has to go yell at HubSpot and good luck. Right, right. So, so think about those kinds of things and if it, in, in many cases, it may make sense for the client to have a direct relationship with a press release distribution service, a software provider, whatever.

And it may make your life a whole lot easier if they do. And that way if something gets taken away, if they take away some feature that’s not on you. Right. And, and it’s, it’s really difficult for agencies sometimes to let go cause they want full control and, and all that. And maybe it’s easier, right? We, we can just subscribe and, and for small things that aren’t a big, an integral part of your project, it may make sense for you just to go get that subscription yourself or other, you know, you, you’ve gotta judge where it does make sense for you just to internalize it because it’s 10 bucks a month and it’s, you know, it’s a convenience, but if it went away, it’s not a big deal.

Versus the, you know, $5,000 a month agreement that is critical. And the whole thing falls apart if it doesn’t work. Right. Right. Those are the ones where you may want the client to have the direct relationship.

Gini Dietrich: Yeah, and not to mention, I’m not the bank, so you have the direct relationship. You pay them directly and we’ll happily use it on your behalf, because I’m not, I’m not doing that, not playing that.

Chip Griffin: Right. And, and there are all sorts of tools that we use that the actual tool does make a difference. You know, if you’re putting on webinars with a client, the, the software that you use has a, a major impact on what you can or can’t do. Yep. The platform on which we’re recording this, StreamYard, recently rolled out webinar functionality, I’ve tried it.

it is not nearly as robust as the webinar functionality on other things. So if you’re gonna use it, you give up things that you might have on other platforms because it’s a new service on StreamYard versus something like Zoom where they’ve really refined webinars a lot, particularly in recent years and where more organizations have done online events and that kind of thing.

And so the functionality has really evolved. If you need some of that advanced functionality, if you wanna be doing polls, complex q and a and all that kind of stuff, and breakout rooms, those are all things that you can do with a Zoom platform that you can’t do today at least, as we record this, with a StreamYard or other things.

And so, so if you are going to propose things that are dependent upon those functions, then you want to work with the client, help them to understand what’s being used. And if, if you say, we’re gonna always do q and a, then they need to understand that whatever platform is being used has to have that q and a functionality.

Yep. And if not, You know, it’s not on you. It’s on that third party platform. And, and I know that agencies love to sort of hide a lot of the behind the scenes, how the sausage gets made, and part of that’s correct. Part of it is the client shouldn’t be burdened with a lot of it. At the same time, we don’t want to make it so opaque that, you know, we are now on the hook for someone else’s screw up.

Gini Dietrich: Right. Yeah, yeah, yeah. I, I’m a big believer in complete, I know you don’t like this word, but complete partnership with our clients in that fashion because that way they’re, they’re in charge of making the payments and making sure that they, that the vendor is doing what they’ve said they’re going to do and all of that.

And then we can focus on what we do best, which is communications.

Chip Griffin: And, and the reality is many clients have more leverage with these vendors than we do as agencies. Yes. Yes. Particularly when we’re dealing with mid-size or larger brands. Yes. Because when they complain to, you know, a Zoom or a HubSpot, someone actually might take their calls.

Yes. Whereas for us as small agencies, , they’d be like, I’m sorry, what’s your customer number again? Right, right. Let me look you up and see if I can find you. Yes. You know, particularly in those cases, you really want to be able to leverage that and so it makes much more sense to work through them. I mean, unfortunately, those are the ones where it’s often the most difficult to get their own internal processes to, to handle the payments and that kind of stuff.

But once taken care of, you know, it’s smooth sailing for a long period of time, so it’s worth the investment to work with them to get those things set up. And then you don’t have to deal with really complex stuff down the road. The other area to look at this is web hosting, particularly if you’re not a digital agency.

Yes. That web hosting is a core part of your business. Yes, yes. Don’t host your clients’ websites unless it’s a core part of your business. Yes, . Let’s let them call someone else when the site is down.

Gini Dietrich: Right. Please let them call someone else. Yeah, this is not what I wanna be doing. No.

Chip Griffin: I mean, I’ve hosted people on my own servers in the past, but that was my line of business at the time, right?

20 some years ago. I would never do it today. There are many better options out there. There, and, so you should work with your clients to solve these problems that way, rather than taking on the burden of managing a relationship that you’re not really best suited to do.

Gini Dietrich: Yeah, so I think the, the idea here is if you’re going to use third party vendors, which all of us do and should, absolutely.

If you’re going to use software that’s available, if you’re gonna test out the new greatest and latest tool, awesome. Do those things. Have a backup plan, and be sure that you understand what the risks and rewards are, but mostly what the risks are so that you have a plan to be able to mitigate them.

Chip Griffin: And be as transparent as possible about any dependencies for a particular project.

Gini Dietrich: Yes, indeed.

Chip Griffin: Make your life so much… maybe not easier, but it’s better. It’s better. Trust me. Yes. Been there, done that over the last quarter century. So on that note, that will bring to an end this episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it depends.

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Chip Griffin is the founder of the Small Agency Growth Alliance (SAGA) where he helps PR & marketing agency owners build the businesses that they want to own. He brings more than two decades of experience as an agency executive and entrepreneur to share the wisdom of his success and lessons of his failures. Follow him on Twitter at @ChipGriffin.

 

Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, the lead blogger at Spin Sucks, and the host of Spin Sucks the podcast. She also is co-author of Marketing in the Round and co-host of Inside PR. Follow her on Twitter at @GiniDietrich.

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