Hertz's 32 Million Dollar Blunder - 5 Things You Can Learn About Agencies
Hertz car rental is reportedly suing top-tier marketing agency Accenture for 32 million dollars over failed digital marketing. According to Hertz, Accenture failed to "deliver the website and apps for which it was so generously paid", in a timely fashion. Hertz contends that this delay has cost the company millions in their competitive industry—and they want 32 million dollars worth of compensation. Accenture has denied any wrong-doing and intend to defend their position, not commenting on any of the accusations outside of stating that they are "without merit".
Learning from other people's mistakes (especially 32 million dollar mistakes) is valuable to anyone—so what can we learn from the Hertz vs Accenture case? Find out in this blog post.
What happened?
Hertz hired Accenture in August 2016 to redesign their website and a few mobile apps. However, the firm was unable to meet basic requirements of the contract and did not make a single deadline, according to the suite.
Despite being a multi-national 41.6 billion dollar company, Accenture had missed the launch at three separate days: the original launch of December 2017, the first delay to January 2018, and finally August 2018—at which point Accenture had already been fired in May 2018.
Accenture then attempted to charge Hertz for the delays.
Delays weren’t the only issue Hertz had with Accenture’s work-ethic. Apparently, Accenture failed to deliver a web structure that could be applied across all of its rental brands, create a website responsive on tablet without hundreds of thousands of extra dollars, adhere to Hertz’ requested visual style, and delivered documents and guides in PDF format despite Hertz’ requests that they deliver them in an editable format. Accenture agreed to deliver the documents in an editable format, but only if Hertz paid in an extra few hundred thousand dollars.
But the woes and wows don’t stop there. Accenture seemed unable to deliver reliable and working code, according to the suit. Upon firing Accenture, Hertz got rid of the firm’s original code and started over. "An assessment of that code revealed that Accenture’s code was so badly written that it could not be re-mediated. Accenture’s replacement discarded it entirely," the lawsuit states.
The cherry on top of it all is that Accenture convinced Hertz to buy a license for RAPID, a program they promised would assist the development of a new content management system. The catch? Once Hertz bought the license, Accenture admitted it had no idea how to use RAPID.
What can we learn?
While Hertz couldn’t salvage anything from their 32 million dollar fiasco, we can certainly learn a few things from the outside surrounding finding a digital marketing agency for your own company.
The biggest is not always the best
Accenture is a 41.6 billion dollar marketing agency with hundreds, if not thousands, of employees around the world. Hertz spent approximately 32 million dollars on their campaign, perceived competence and brand—yet the entire project flopped.
Many large corporations are turning to smaller marketing agencies for a wide array of reasons. AdAge noted some of these reasons from major business players around the world that choose smaller marketing agencies.
These reasons include:
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Smaller agencies offer fresh and innovative marketing campaigns
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Clients receive individual attention
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Smaller agencies operate faster
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Smaller agencies offer niche experience
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Smaller agencies operate with less red-tape and bureaucracy
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Smaller agencies are more transparent
All of the above reasons could have saved Hertz from their costly agency school fees.
The best agencies don’t automatically mean the best team
One would usually believe that you get what you pay for. However, just because you’re paying for a top tier marketing brand doesn’t mean you’re going to get top-tier personnel assigned to your campaign.
Large companies and agencies have a lot of employees, and they’re often assigned to larger projects that require a lot of work. This is mostly restricted to background tasks—but enough new recruits on enough background tasks could lead to some very complex (and expensive!) problems.
It’s always a good idea to meet the team associated with your project and find out more about them, and even better if the managing director or CEO has a regular and personal dialogue with you.
Beware of scope creep
Yes, men are expensive. Yes, agencies will bankrupt you.
It’s easy to demand and expect any feature you desire for your marketing campaign, especially when you have no idea how to implement it yourself—after-all, that’s why marketing agencies like Accenture exist, right? This is also why Hertz is stuck with RAPID, which no-one, not even Accenture knows how to use.
If the agency you are working with is saying "yes" with no buts, then you should probably take a serious look to see if they know what they’re talking about.
Unfortunately, scope creep is all too popular with large agencies who have limited, if any, contact with the employees that actually do the groundwork.
Expect delays and the unexpected
Despite any marketing agencies best efforts, sometimes things go wrong or some more clarification is needed. And by sometimes, I mean quite often...
This is not to say that the majority of agencies are incompetent, just that the nature of development requires constant feedback and improvement to get the best possible result.
While there really is no good reason to delay a project three times when you have 32 million dollars riding on it, Hertz is not completely innocent. Hertz should have expected some delays and factored them in, especially in a competitive industry like theirs.
Look For Transparency During On-boarding
As mentioned before, agencies will bounce back and forth with feedback on their progress and find out what your evolving expectations are. It’s important to keep an eye out for transparency in their dealing with you.
A great place to start is during the on-boarding process. How clear is the communication and the expectations from both parties? Have you met with the team responsible for your account? How easy is it to communicate with and apply adjustments? Were your questions answered satisfactorily and have you heard back from any promised follow-ups?
These are important questions that every client should ask themselves when evaluating an agency during on-boarding.
A quality alternative
Finding the best marketing agency is not an easy task, and it’s definitely not as simple as hiring the most expensive or largest one. However, with the above lessons you should have a better understanding of what to look for, and avoid making making Hertz’ mistake.
If you’re not interested in spending upwards of 32 million dollars on your marketing campaign but still expect the best results, why not contact Demodia? Demodia is an internationally recognised marketing agency based in Europe, and has solved marketing challenges for companies big and small.
Contact Demodia today, and find out what your company is capable of.
