Risk management should be at the core of every organization’s operations. Marketing agencies, in particular, should prepare for both expected and unexpected risks. Unfortunately, most marketing agencies focus on their strengths and product development at the expense of risk management.
At every phase of its business operations, a marketing agency should consider how it conducts business, the third-parties it deals with, and risks that arise from such dealings. Some of the risks that marketing agencies face include:
- Advertising risk
- Inadequate marketing strategies
- Poor branding
- Questionable affiliations
- Poor brand value and perception
That said, here’s how a marketing agency can tackle the risks it faces:
Make Your Business Operations Agile
Marketing agencies ought to regard agility as a crucial component of their risk mitigation strategy. The marketing industry is dynamic, thus making it difficult to foresee the future. To solve this, it’s best to make your business model as agile as possible to adjust to changes in the industry swiftly.
Agility is just as important as efficiency as far as risk management is concerned. If a negative risk occurs, agility will give you the resiliency required to ride the tide. Likewise, if positive risks occur, agility will enable you to capitalize on the opportunities that will arise fully.
Create Awareness Among Employees
The COVID-19 pandemic has shown us just how important it is to train employees and plan for the unexpected. Employees should be trained on risk tolerance and financial management. When employees learn to spot risks, it will be easier for you to mitigate them or capitalize on their opportunities.
Risk management seems to be simple in theory, but few employees at marketing agencies have the requisite competencies and skills to apply it in practice appropriately. Risk awareness programs should focus on risk-based decision making so that employees can differentiate acceptable risks from non-acceptable risks.
Decide What’s Important to Your Agency
Before you develop a risk management strategy, you should first think about areas most likely to be affected by each risk. For instance, you might only be interested in financial risks. In this case, hazard-based risks won’t be that important. Some of the key considerations to keep in mind when creating a risk management strategy include:
- Cultural, political, and social issues
- Technology and economic trends
- Government laws and policies
- Your business strategy
Identify Your Risks
You can’t tackle something you know nothing about. Thus, it’s essential to outline the types of risk you face. Working out the risks to your marketing agencies could be as simple as outlining what could go wrong and why and how that can happen. Moreover, it’s advisable to take a closer look at:
- Past events and risks you’ve faced
- Potential changes in the business environment, including new compliance regulations
- Audit reports
Determine Your Response
While undertaking risk planning, it’s best to determine possible response action. Often, risk-related events escalate simply because there wasn’t a response action in place. When formulating a response plan, it’s best to focus on risks with a high likelihood of occurrence and a high potential impact. It will be easier to determine what to do to lessen the impact of the risks.
Assign Risks to Owners
It’s easier to tackle risk in your marketing agency if each risk is assigned to an owner. These should be individuals who are most suited to deal with a particular type of risk. For instance, a branding and public perception risk can be assigned to a PR expert. The collaborative efforts of each risk owner will go a long way in helping you determine the most suitable action if the risks occur.
Review Risks Regularly
Risk management isn’t a one-off undertaking. It’s a continuous process, which should be scaled as your marketing agency grows. For this reason, set aside time to review the risks you face regularly. In doing so, you’ll be able to pinpoint emerging risks.
Ensure that you also report on the new risks, their likelihood of occurrence, and their possible impact. Discussions relating to risk management should be encouraged within the agency’s leadership team so that executives also get the opportunity to provide direction and their input.
Commit to Reducing Risk
Every marketing agency faces both internal and external risks. The best way to tackle risks is to keep them at bay. To do so, you need to have a solid risk management strategy that prepares you for unexpected events. With such a plan in place, it will be easier to nurture a culture of risk prevention.
Risk is an inherent component of running a marketing agency. The only way to cushion yourself from the negative impact of risk is to have a solid risk management plan. In doing so, you’ll prevent the risks or tackle them appropriately if they occur.