Build

Why value exchange is at the heart of our commercial model

The variation in all the commercial models in the intermediary sector is huge. What is also vastly different is the consultancy offered by the range of businesses that are grouped under this single banner of ‘pitch consultant' or 'intermediary’.

Our commercial model is as follows:

• The principle of value exchange is the foundation of how we have built our commercial model.
• At AAR, we charge all our customers for the consultancy services we deliver.

This means we have two main sources of revenue: brands and agencies.

• For brands, we use output-based pricing to charge a fixed fee to deliver an agreed set of deliverables. The benefit to brands is that they have clarity on what they are expected to pay upfront, with no surprises along the way. It allows us to work flexibly to deliver the best outcome for our clients and for agencies and not base our decisions on what was in or out of scope. The benefit this brings to agencies is that the brands we work with are financially committed to any selection programme, which brings credibility to AAR opportunities and reassurance that the brief is genuine.
• For agencies, there are two ways we deliver consultancy: through our agency selection programmes and through our agency subscription. We do not operate a pay to play model. Agencies do not need to subscribe to AAR in order to be on a pitch list. AAR clients have access to the entire market, and this will never change.

So, what does subscription offer?

It provides agencies access to a wide range of tools and services designed to help them win and retain client business. This includes insight, data, research, reports, town halls and seminars. The cost of subscription is tiered and based on the agency’s income, to make sure this information is democratised and available to agencies of all size.

Within our pitch consultancy, we work on a success fee basis. We ask agencies who win an opportunity through an AAR introduction to pay a fee commensurate with the size of the opportunity. If you are a subscriber, we do not charge a success fee, as this is covered within their annual subscription, alongside access to all the tools mentioned above.

The success fee is calculated as a percentage of the fee from the year one scope of work. It is capped and never exceeds 10% of first year's revenue. meaning no ridiculous fees which do not reflect the scale of service we’ve provided.

The success fee percentage is decided and agreed on a case-by-case basis, depending on scale of opportunity, type of opportunity, the pitch programme, and this will be discussed and agreed with all agencies at the start of the process.

The bit that really matters is that the success fee demonstrates a value exchange. It reflects the value that we bring agencies throughout an AAR selection process - our ongoing consultancy support to agencies to ensure they can deliver the highest quality pitch response they can on behalf of the brands we support. If we get to the end of the process, and the winning agency does not believe they have received the value from AAR as reflected in the success fee, they can refuse to pay us. We will not argue or quibble but take it on the chin. We are proud to say that no agency ever has.

We are all hugely proud of the role that all our AAR consultants play throughout a pitch, and specifically the time and investment we put into agencies throughout any selection programme.