Frictionless Client Relationships? We’ll Netflix that!

Simon Quarendon | January 15, 2019

Friction is one of those words that gets bandied around in business. And usually out of context. Most of us were probably first made aware of it in a physics class when we were taught how it translated into ‘resistance that one surface or object encounters when moving over another’.

That was good enough for the financial services industry to adopt the term as in ‘friction costs’. Although in reality they simply meant those additional costs that would be involved in an investment, such as commissions and fees. But, hey, friction costs sounds less intimidating.

Netflixing the Frictional Issue

So we were intrigued to see Netflix using the term in another context, this time as in “reducing the friction between viewers and content”. The sentence was used in a major article published in The Sunday Times (‘Netflix: the greatest story ever spun?”January 13th, 2019) to describe Netflix’s business strategy which is centred on ‘removing barriers’ or, put another way, encouraging us to consume as much of its product as we possibly can.

And you have to admit, as business models go, it takes some beating. Sales have soared to a projected $16bn last year as the company chases what the paper terms a critical mass point of 200 million subscribers. At that point it might be able to ‘dial down’ on its spending (it has a negative cashflow of $4bn including $13bn spent on content) and may even increase subscription fees so as to balance the books. Not that its investors are unhappy; its share price has rocketed from $12 to $337.59 in just seven years.

So, if reducing friction as a business strategy is good enough for Netflix, we thought it might be good for Selbey Anderson too. (Yes, we know, we’ve only just raised some capital and already we’re comparing ourselves with Netflix, but heh, we like to think big).

Our use is a further variation on their theme; reducing the barriers that exist between agencies and their clients. Let’s consider what those barriers might be and the benefits that might accrue to both parties if we lower them or reduce them entirely.

Clients want more face time with senior account handlers

The biggest barrier, at least from the clients’ perspective, is the amount of face time they can have with their account handlers. Stuck in eternal internal meetings, most ‘client-facing’ staff are anything but and are constantly scrambling to respond to emails, voice mails and the like from increasingly irate clients. And you know the people who can add the most value to the client because they have the most experience? Well good luck to ever seeing a senior member of the agency, trapped as they are in a permanent cycle of working ‘on’ the business as opposed to ‘in’ the business.

Client want better information

Another barrier is the amount of information flowing between the two organisations. Or lack of it. Despite a proliferation of cloud-based project management or collaboration tools, most agencies insist on hoarding data behind their firewalls and dribbling it out to the client on an occasional basis, using an antiquated or convoluted system, such as a ‘monthly activity report’ Oh, and the time that the agency spent dicing and splicing that information into that report? The client paid for that.

So, we’re with Netflix on this. If we can make more agency personnel available to their clients for more of the time, we believe that we can lower a potential barrier that’s preventing a more fruitful relationship from developing. Critically, this includes senior staff who tend to fade from the clients’ view as they climb up the agency. Similarly, if we can speed up the flow of information between the two parties then we can remove another barrier that can be just as obstructive.

In summary, clients want – if not continuous access to their agencies – then something that very closely resembles it. Those agencies that are taking active steps to remove the barriers preventing that from happening will probably not grow to the size of Netflix but they should create for themselves a comparable competitive advantage that might feel just as disruptive to the rest of the industry.