Blog Posts

Rebuilding Your Business Model

Written by ChuckMeyst2015 on . Posted in Blog Posts, Business Development, Marketing Consultancy

As the old axiom goes, all you need to start an agency is a desk and a phone. In the 21st century version, the desk might be replaced by a laptop computer, but the perceived simplicity of professional service firms is based on the fact that we are essentially knowledge businesses. We don’t have manufacturing facilities, product inventory, warehouses, or distribution centers. Just the same, professional firms are built on top of a set of capabilities and practices that constitute a business model.

The problem is that most leaders have never stopped to consciously identify, examine and modernize the interlocking pieces of their business model framework. In truth, precious few leaders of professional firms could even map the elements of their business model on a piece of paper. So when we see headlines about “The death of the agency business model,” the issue is more a matter of benign neglect than mismanagement.

A triangle of value

Even among business school types, “business model” is an amorphous term habitually referenced in books and articles, but scarcely defined in a way that allows for productive discussions about how to optimize the business strategy of the firm. Over the years, my colleagues and I have worked to develop a useful framework to describe the key elements of a professional firm’s business model, which has resulted in what is essentially a triangle of value. Each side of the triangle represents one of the three key reasons a professional firm exists:

  1. To create value
  2. To deliver value
  3. To capture value

Creating value is the foundation of your firm’s success, and it rests on a clear definition and understanding of the specific client challenges your firm is best prepared to address. Most firms approach this question precisely backwards, showcasing the obligatory bullet point list of services as the standard bearer of their business strategy. But the capabilities you offer must emanate from the types of business problems you solve for your clients. Clayton Christensen frames this in context of Jobs to Be Done Theory; the idea that clients hire a specific service to solve a specific problem.

The essence of this leg of the model is to clearly define and articulate “What are the problems we solve for our clients?” The most powerful way to do this is to state these problems from the client’s point of view, in first-person language.

Equally important is a clear articulation of the markets you serve. The answer can’t be “everyone with money,” as some firms regrettably define their target market. Peter Drucker famously observed that marketing starts with the question “Who is your customer?” and this question applies just as much to professional firms as to the clients they serve. Your target market doesn’t have to be a type of industry category; it can be a type of audience or even a type of brand.

Delivering value is the second piece of your business model. This means developing and supporting an effective engagement model, which is comprised of your operating model and your production system. Most agencies get high marks from client organizations when it comes to responsiveness; meeting deadlines, reply client requests, and fulfilling scopes of work. In other words, we’re seen as very responsive. (Unfortunately, client ratings for agencies being proactive are dismally low.)

When it comes to the operating model, the central issue agencies must address is differentiating between short-, mid-, and long-tail offerings. These solution sets vary widely in perceived value to clients, and must be delivered in very different ways by agencies. Short-tail offerings are the agency’s unique blockbuster competencies; uncommon services and programs that provide high-value solutions to client problems. Mid-tail offerings are capabilities that are routinely applied in most engagements. And long-tail offerings are the widely available executional services and activities that are seen as standardized (and therefore commoditized) by most clients. These three classes of offerings must be developed, delivered and priced in very divergent ways. The mistake most firms make is bundling all three service classes under the banner of the dreaded “blended rate,” the absolute worst way to address the continually-evolving disintermediation of agency services.

Capturing value is the part of the business model where professional firms struggle the most. The root of the problem is trying to package up the value of knowledge work in a unit of time; a hugely suboptimal way to get paid for the expertise and intellectual capital that resides in your firm.

Effectively capturing value is dependent on having an actual revenue model (billing for your costs is not a revenue model, it’s just a reflection of your cost structure). Professional firms with actual revenue models have replaced their rate card with a “pricing stack, a variety of ways to capture value in ways that align with the principles and practices of modern pricing. These include such approaches as dynamic pricing, two-part pricing, royalties, licensing IP and more. At the very least, it means pricing based on the perceived value of the outputs or outcomes, not the cost of the inputs.

To fully capture the value you create also requires commercial alignment; uniting the entire organization behind a shared vision of what you really sell and how you should get paid for it.

Not planning, but choosing

Especially if your firm has been in business a decade or more, it’s very likely that you’ve arrived at your current business model more by default than by design. You are living with an emergent strategy rather than a deliberate strategy. If this describes the current state of affairs at your firm, you have the opportunity (if not the obligation) to deliberately design your business model.

Your remix is not necessarily to make plans, but to make choices. Business planning is about taking steps and deciding what to include. Business strategy is about making choices and deciding what to leave out. As you examine each element of your business model, the job is to not to figure out how you can be better, but how you can be different. As design thinker John Koklo recently observed, “Leading companies say No much more than they say Yes. Rather than chase the market with follow-on features, they lead the market with constrained focus.

Propulsion is written by Tim Williams of Ignition Consulting Group, a global consultancy devoted to helping agencies and other professional firms create and capture more value. 

Ad Agencies And Their Holding Companies Fail At Their Own Branding

Written by ChuckMeyst2015 on . Posted in Blog Posts, Business Development

I read with great dismay and sadness about MDC merging KBS into an unknown (at least in the U.S.) Swedish agency (Forsman & Bodenfors) and obliterating the Kirschenbaum Bond name.  Without getting into the history of Kirschenbaum and its recent problems, all agencies go through up and down cycles, sometimes those phases go on for years.  But that is no reason to destroy the equity which has been built into the agency brand, especially one that is essentially positive.  The evidence is that once that brand name disappears, the new agency rarely fully recovers.  As a result, when it comes to mergers in advertising, one plus one often equals far less than two.

As every good marketer knows, building a brand name takes years, often decades.  Destroying the brand can take only a stroke of a pen. Changing or obliterating names can be confusing and dangerous for the brand.

One of my favorite stories is how Omnicom screwed up both Chiat/Day and TBWA. Omnicom merged TBWA into Chiat in 1995 and ultimately changed the name to TBWA, eliminating the Chiat moniker.  Yet, even today, especially in Los Angeles, Chiat’s headquarters, TBWA is still known as Chiat/Day. (TBWA was a stronger name in Europe and is rightfully called that in those markets).

Batton, Barton, Durstine & Osborn modernized and became BBD&O and eventually BBDO, which makes total sense. Ditto when Doyle Dane Bernbach was bought by Omnicom, it was changed to DDB/Needham (to accommodate the merger of Needham Harper Steers – but Needham was ultimately dropped); DDB was the stronger brand. Other agency brands are still confused by their own name changes.  JWT is still called Thompson or J. Walter or even J. Walter Thompson; I think I understand why that name was changed, but I could make a good case for having left it alone.  Ogilvy, which started as Ogilvy, Mather and Benson, and subsequently changed to Ogilvy & Mather, became just Ogilvy, but to this day is still often called O&M, even by its own employees (checks still are marked Ogilvy & Mather). Y&R is still Young & Rubicam, even if the full name is not verbalized. Changing a name does not change a culture.

When the founding principals of well-known ad agencies retire, merge or die, unless they made strong succession plans, the agencies often diminish or disappear and rarely recover if they are merged.  Saatchi & Saatchi, at least in the U.S., never achieved its potential when Compton was merged with Dancer and their name was changed to Saatchi & Saatchi.  Saatchi was on of  Briton’s more creative agencies and the two merged into it were heavily package goods agencies, more known for their ability to create effective strategy; for complicated reasons, Saatchi, at lease here in the U.S. never achieved the creative reputation of its London parent.  The merger never took into account the cultures of the two American agencies and the strength of their client relationships.  In the case of this three way merger, one plus one plus one ended up equaling about one and a half.

IPG merged Bozell and Kenyon & Eckhardt and then the two of them into FCB, which was subsequently merged  with Draft.  Now, what remains is a mere shadow of the original agencies.

In a mistaken effort to keep contemporary, merged agencies often drop the names of the founders, which may be unnecessary.  JWT is a perfect example of that.

So much of advertising is driven by creative personalities.  When it comes time to sell or merge the new agency people want their names to dominate, but that often destroys the equity which was achieved by the original agencies.  IPG was smart to leave the Deutsch name alone, even though Donny Deutsch long ago moved on. When IPG merged Lowe into Deutsch, aside from being a cultural disaster, they still kept the Deutsch name dominant. The people who ran Deutsch figured out how to keep their culture, despite often rancorous disagreements with the parent company (and occasionally, Lowe, which subsequently and smartly separated itself).

Kirschenbaum & Bond now joins a long line of wonderful creative agencies which simply disappeared after being merged and submerged – Ally & Gargano, Scali, McCabe & Sloves, Wells, Rich, Greene, Lintas, Ammirati & Puris are all examples of great brand names which disappeared out of the hubris of holding companies.

More often than not, putting these agencies together, without any regard to their individual cultures and differences actually ended up killing the brands, costing the holding companies millions of dollars in the long run.

What a waste.

Guest Post by PAUL GUMBINNER President of The Gumbinner Company, executive recruiters for the advertising industry.

90 Days, Give Or Take (says Drew McLellan of AMI)

Written by ChuckMeyst2015 on . Posted in Blog Posts, Marketing Consultancy

Remember those goals you created in your retreat, summit, on a long car drive, in the shower, etc. for 2018?

That seems like eons ago, doesn’t it? You had plenty of time. You just needed to get a few things off your plate before you really dug in and got started.

Well, guess what — we have about 90 days left. In the US, Thanksgiving is three months from today. And whether you celebrate US Thanksgiving or not, we all know that by December 1st, things begin to grind down to a crawl for that last month of the year (and the first two weeks of January). So if we’re going to make hay, we need to do it right now.

One of the most paralyzing things we do to ourselves is to bite off more than we can chew. Our grandiose plans are so overwhelming that we don’t even know where to start. It’s time to trim that plan down to the essentials.

I want you to identify the two things you can do that would have the most impact on your agency by the end of 2018. It might be getting rid of a toxic employee. It might be doubling down on mentoring an AE so they can take more day-to-day work off your plate. It could be a new business push or fixing an internal system or process that is broken.

Whatever they are — no more than two. And then this week (yes, before the end of the day Friday) put together a simple plan for making it happen. Calendar it. Commit to it. Build an internal team if you need to. But, the finish line is now visible to the naked eye, so we can’t put these things off any longer.

You’ve got 90 days to set yourself up for success in 2019. Don’t dilly or dally. Just get it done!

Thank you Drew!

 

Gads, What a Burden! I’ve Come to realize it’s time for a new Marketing Partner; Now What?

Written by ChuckMeyst2015 on . Posted in Agency Search Tips, Blog Posts

Quick Survey:

Maybe my load’s not that heavy, but circumstances have brought me to a place and time where it’s appropriate to start looking to hire a new marketing partner. Take a moment to guide me and others faced with the same challenge; comment to identify your favored options. Additional comments welcome.

  1. Hire a conventional “big bucks” agency search consultant (if affordable)
  2. Reach back to those in my “Other Agencies” folder that have already approached me
  3. Conduct a Google or Bing search for agency candidates – a true Do It Myself project
  4. Use an on-line agency search “service” or directory to find qualified candidates
  5. Ask colleagues for suggestions and referrals
  6. Ask my media buddies for suggestions
  7. Other …

P.S. – It’s known as agency search and it’s degrees harder than hiring a new CMO.

How to Choose the Best Digital Agency

Written by ChuckMeyst2015 on . Posted in Blog Posts, Client Search News

5 MUST ask questions as well as a guide to help you find the best digital marketing agency to grow your business online.

I was listening to the excellent Robert Craven the other day on the Google Partners Podcast and it occurred to me that it must be a real challenge for a company or brand, to find a digital agency.

There is quite simply a plethora of agencies out there and to complicate matters still, they all focus or major in different disciplines, all claiming to be ‘the best’ or ‘leaders’ in their field. Furthermore, many will display badges of honour – winner of this or commended for that. No wonder people get so confused…

So, I have written this guide to try and help people when looking for an agency to help them grow and develop online. I have also highlighted some key questions to ask as well as some key questions that need to be asked by your potential agency.

Who am I?

I am Reggie James, founder of Digital Clarity. I have worked in the digital marketing space from its initial inception and launched one of the first paid search (PPC) agencies, as well as a tracking and attribution software business used by digital agencies in the UK called DC Storm.  The DC standing for Digital Clarity. This company was acquired by Rakuten in 2014.

Prior to this I worked at two search engines, helping both agencies and clients get found online, and I continue to help clients achieve this today.

What is a digital agency?

A digital agency is the umbrella term given to organisations that deliver services ranging from web design through to Paid Search (PPC) and Search Engine Optimisation (SEO). The term Digital Agency may also cover a whole host of other specialisms that sit under each sub service.

The challenge

There is a major problem in the digital marketing space that is sadly being perpetuated by a number of agencies who were one day a PR Agency and today dress themselves up as a ‘Social Media Agency’. This happens all the time and can cause confusion and bad experiences.

Many clients that I meet may have had their fingers burnt or are reeling from some horrendous experiences where they thought they had signed up for a service with a reputable ‘Digital Agency’ only to find that the team at the agency were not all that they seemed or worse still, were learning some new skills whilst on the client’s payroll. Though shocking, this is not uncommon and quite frankly unacceptable.

Thankfully, things are changing. Experience and verification by both independent bodies and platform owners like Google are helping customers find the cream. In certain disciplines like display advertising, the use of blockchain technology is helping create a public ledger of post GDPR audited agencies and sites.

The importance of digital agencies

So, knowing what we know, it is also vitally important to point out the incredible value great agencies add to their clients.

It is rare to find companies that have the digital marketing prowess, collective skills and manpower that a truly good agency will have.

From creative thinking and strategy through to execution and management, well admired agencies can deliver both resource and fantastic return on investment (ROI).

What should a good digital agency do?

You work in an industry or sector where you have competition. No two businesses in your sector will be the same. The same is true of digital agencies.

A good digital agency will take the time and effort to get under the skin of your business. Whether you are selling to consumers or businesses direct, the need to understand the lead time and business process of your company as well as the competion and where you sit in the venn diagram of your industry are all basic first steps of good digital agency practice.

The questions you are asked by your prospective digital agency will determine whether the agency is the right fit for you.

What types of digital agencies are there?

Firstly, there are many. Here are a list of a few below.

The extended specialist

Web Design, these services could include:

Design & Development
User Experience (UX)
Innovation
Languages
PHP
Python
Net
CMS

WordPress
SiteCore
Etc.

Branding

Messaging
Logo design and development

The Jack of all trades

These are referred to as full-service digital agencies and in many cases can be the larger agencies. This agency model is going through a seismic shift as many clients may be paying for a suite of services that they will never use or simply do not even need.

The full service agency model, when analysed deeper –  one can normally see a shift toward a certain service. This means the agency at one point specialised in a discipline and then augmented services or bought companies to align disciplines. Why? More than likely, to win new business or keep existing business.

The ‘me too’ agency

These are agencies where they may have been involved in non-digital work, but are looking to capture new work by adding the word ‘digital’ to their name, or offer services that are out of their comfort zone. This can Web design agencies who suddenly feel they are SEO specialists and start dabbling in the art and science of Search Engine Optimisation. Quite simply, this normally ends in tears.

Questions to ask

I covered this question in an earlier blog when i looked at choosing a PPC Agency and it’s always worth going back to compare questions.

In many cases where I have come across a client who is in a toxic situation with an agency, I have often been asked to mediate or help transition the relationship to its natural conclusion. On reflection with both the client and the agency, it is normally the questions and due diligence that has led to both parties starting off on the wrong foot.

So what questions can a client ask a prospective digital agency? Here are 5 must ask questions:

What disciplines of digital marketing do you do?

Search? If so, PPC or SEO or both?
Web Design and Development
UX / UI
Digital Transformation
Social Media
Etc.

If it’s more than one of the above, which areas do you specialise in?

Of your specialist disciplines, can you demonstrate your skills-sets with some examples?

Case Studies
Testimonials
References
Etc.
How will these skills help my business?

Can you share projections?
Your process
The day-to-day running of the account
Analysis and reporting
Etc
How would you go about working with me?

On boarding process
Needs analysis
Etc.

Conclusion

Once you have your answers to these questions, it will much better help you shape your opinion of both what you require as well as see if the agency is the right fit for you and your business.

Note: This is an opinion piece  by Reggie James, founder of Digital Clarity and not necessarily those of AgencyFinder.

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Agency Owners — No Rest For The Weary?

Written by ChuckMeyst2015 on . Posted in Blog Posts, Business Development

Owning, leading or even just working in an agency is a fantastic gig. You get to be surrounded by wicked smart, witty, committed teammates, you get to save the day for clients on a regular basis and let’s face it, the work is fun most days.

We are lucky. Damn lucky. But we are also tired. Along with all of those privileges comes the worry of keeping the sales pipeline full, dealing with the human side of your team and clients (which can be both joyful and tragic as we all walk out our lives together) and long, arduous days (and nights, and weekends….).

Drew McLellan

We work at a pace that is fast and furious, shifting from one client to the next and often working weird and long hours. That is unsustainable without giving yourself some respite.

But we’re not so good about giving ourselves that break. It’s not about taking a vacation or a long weekend or just not checking email for 24 hours — it’s about survival.

Back when I was a kid in the business (call me 30 or so) I remember one of my mentors saying “This is a young man’s game, Drew.” And that was before the 24/7 connectivity we have now. I think he was both right and wrong. Our chosen profession does require an incredible amount of energy and passion but that’s not about being young. It’s about recognizing that it’s an endurance sport and we have to train and plan for that.

Here’s my challenge to you — when was the last time you didn’t check email for 24 hours? When was the last time you took 5 workdays off (in a row!) and played as hard as you work? Who (family, friends) are you not getting enough of in your life?

If you don’t like the answer to those questions — fix it. And then go to your 2018 calendar and schedule some breaks for yourself. Re-fill your bucket so you don’t come up empty.

This post courtesy of Drew McLellen, Chairman & CEO at AMI, Agency Management Institute and  President of his agency McLellan Marketing Group

 

One More Time; Let’s Simplify Branding & Marketing

Written by ChuckMeyst2015 on . Posted in Blog Posts, Marketing Partenerships

Our company matches advertisers with qualified marketing firms, so we constantly field requests for branding firms, branding services, or just for branding. Conversely, it seems every agency today declares themselves to be a branding or digital agency. So just like media alternatives have grown to a complex set of options, so have the meanings of branding and marketing. Here are some versions that may help simplify things.

Image result for kentucky peerless distilling co

Start with Branding. The one I like says it’s the essence of a product or service. “The intrinsic nature or indispensable quality of something, especially something abstract, that determines its character.” Or “a property or group of properties of something without which it would not exist or be what it is.” Accordingly, the toolkit of adaptations agencies claim they can bring to bear on branding generally seem reasonable, but they generally serve as participles to the noun branding. Does it seem reasonable then that the essence of anything could serve to promote itself? Any more than a race horse could win a race without running?

That’s where marketing comes in. Marketing runs the race. Some say “Marketing is the process of bringing goods or services to market.” How’s that for simple! Marketing then as an all-encompassing concept is far-reaching. It could include research, advertising, public relations, direct marketing, social media, experiential and more. Curious then how digital fits in that set. Yet most agencies today are want to declare themselves as a digital agency. To add to the confusion, it seems everyone pontificates about branding and marketing. Since those conversations will undoubtedly continue, in the meantime I hope this helps.

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THE SOLUTION FOR BEING TOO EXPENSIVE

Written by ChuckMeyst2015 on . Posted in Blog Posts, Business Development

It’s early January. My phone rings. It’s Sue, a former client I spoke with two weeks earlier. She had called to share she was leading a new firm and they were growing like mad. She needed our help again. I had always liked Sue. We did really good work for her and she’s a straight shooter. I trusted her. We also hadn’t worked together for quite some time and our prices were higher now and our process more finely tuned.

The conversation we had two weeks ago had gone well. I walked her through our process-framed case studies and gave her a proposal for the work with options. This was the green-light call, I was certain of that.

“Hello, Sue. You ready to hire us again?” I joke.

“Well, I wanted to talk to you about that,” her tone sombre.

Uh-oh. I knew she was looking at other firms. I suspected they were all local and generalist in nature. Is she calling to give me bad news?

“Okay…what’s up?”

“I know you can do a good job. But you’re just so much more expensive,” she says. “My firm is young. And your price is just….,” her voice trails off.

To keep the conversation from turning from bad to worse, I jump in.

“Sue, do you mind if I ask you a question? Is your firm trying to be the low-cost provider in your sector?” I know the answer.

“No, of course not.”

“Well, neither are we. I know you’re looking at other firms, and there are some good designers here locally. But let me tell you why we’re worth every penny. Then you can make your decision. And if the decision is not to hire us, that’s fine. We’ll still be friends, okay.”

“Sure.”

“So the first reason we’re worth it is that we specialize in your sector. And this gives us insights that other firms won’t have. Are the other firms you’re talking to going to be able to hit the ground running, or are you going to have to start by explaining in excruciating detail exactly what it is you do? You know me, Sue. We’ve worked together before. You won’t have to train my team. I’ve already done that for you, by working for dozens and dozens of firms in this sector.”

She says something non-committal. At least she’s listening. If I go down, I’m going to go down swinging.

“And Sue, we’ve shown you exactly how we work. I walked you through our process-framed case studies. We’ll take you through each step in that process, just like we do with all our clients. Now, did any other firm show you exactly how their process is going to work, or did they just wave their hands a lot?”

Again, a non-committal answer. But I think I’m making headway, so I keep on. Next, I make a strategic move.

“And Sue, you know you can split this project into two portions. We’re better than anyone on the planet at strategy…” Did I really just say that? “…so why don’t you hire us for the strategic part, and then you can give the tactics to some low-cost (inexperienced) pair of hands?”

I’m doing what Win Without Pitching calls “stepping on the tactical to raise the strategic.”

This has worked with other prospects in the past. Once we finish the strategic component, it’s actually pretty tough for the client to go elsewhere. Their comfort level and their confidence in our abilities is pretty high by that point. But it doesn’t work this time.

“No,” she says. “I don’t want to split this up. All that will happen is the second firm will say, ‘Well, we wouldn’t have done it that way.’ So the results will suffer. And I don’t have time to babysit this process. I’m looking for a firm that can act as my marketing department. I’m too busy to babysit them, or to play referee.”

“I totally understand that, Sue. You don’t want to have to play referee. Our goal is to deliver great results for you, which is why we put together the proposal and price options the way we did. We can handle all your needs.”

“And Sue, there’s one more thing I want to say. I normally don’t do this for very many people, but we’ve worked together before and I trust you. So I’m going to do something I don’t normally do. I’m so confident that our process will deliver great results that I’m going to give you a money-back guarantee. How many other firms are that confident?”

“Not very many.”

“That’s right. So, you want to know whether we’re worth the investment. I understand that. I’ve given you three reasons. First, we know your sector. You won’t have to train us. Second, we’re going to be following a clearly defined, well-honed process. And third, I’m giving you a money back guarantee. If you get to the end of the strategic phase and you don’t think our deliverable will work, then you give us one chance to fix it. If we don’t fix it to your satisfaction, I’ll give you your money back.”

There’s a silent pause.

“Sue, this reduces your risk a lot.”

“Hmm…” She’s thinking about what I’ve said.

“Sue, what concerns do you have?”

“None, I just need to think about it.”

“Okay. That’s fine. Again, I want you to know that I’ll respect your decision, no matter which way it goes. As you think about it, if you have any other questions, give me a call, okay?”

“Okay.” There is a pause. “Oh, I do have one more question.”

“Sure.”

“Well, we had a really good year last year, and I need to get some money off my books. Can I pay you for the whole year in advance with money from last year?”

I laugh. “Yes, Sue, I’ll take your money, no matter what date is on the check.”

She laughs too. We trade some pleasantries and hang up.

Less than a week later, I have a check in my hand for more than a quarter-million dollars. She never negotiated the price.

What just happened?

Maybe she called to tell me I didn’t get the job. Maybe she called to negotiate on price. But she called. And I won the work at a higher price than any other supplier.

Reading this conversation, ask yourself how confident I sound. Pretty darn confident, right? Where does that confidence come from? It comes from the expertise my firm and I have built in our one sector.

And how does this expertise manifest itself? It manifests in expert processes.

And the money-back guarantee is a great way to back that confidence with action. I know that most challenges are no match for the systems we use to develop a solution. Yes, there are outliers, those thorny, horrendous problems that cause my team to stretch and sweat. But I’d asked enough questions to know that Sue’s challenge isn’t one of those. So the risk I’m running in making the offer is very, very small.

Our expertise and the resulting confidence also manifests in expert sales processes. I knew how to help her reach a decision that would be in both our interests. Thanks, Win Without Pitching, for all you’ve taught me.

The Money Back Guarantee Step-By-Step

When I first heard Blair talk about offering a money back guarantee, I was deeply skeptical. No, worse than that, I was frightened at the thought of actually having to write out a check. I’m sure many of you feel the same way. But I’ve been using them for a while now and I’m here to tell you that they’re a lot less scary than they sound. I’ve made this offer three or four dozen times, and I’ve closed a fair share of those and no one has yet to ask for their money back.

I urge you to use money back guarantees. They’re incredibly powerful. The firm that offers them exudes confidence. And that’s exactly what the prospect is seeking. At the end of the buying cycle, buyers need reassurance. Many of your prospects don’t buy what you’re selling very often, so they’re unsure. They need to understand that you represent a safe choice. They need confidence. And that’s exactly what a money back guarantee provides. You’re offering to take their financial risk down to almost zero.

The Components

First, only guarantee the strategic portion of the engagement. It’s too easy for the tactical details to go sideways. When I was talking to Sue, that’s what I did, guaranteed just the strategic portion.

Second, you have to require the involvement of the principal. They can’t disappear while you’re doing your work, foisting you off on some low-level person with no power and no vision, only to pop back in and say, “Well, that didn’t work. I want our money back.” I didn’t require this of Sue, because I knew that she would need to be deeply involved in our process. That’s the way she works.

Third, the less “fine print” you have the better. So, no caveats, no exceptions, no escape clauses. This should feel like a handshake deal, not like one where the lawyers have to redline every clause. This is where you need to have the courage of your convictions. The only thing I told Sue in this regard was one minor detail: if it’s wrong, you give us one chance to get it right. But there was no other fine print.

Fourth, there needs to be a limit of some kind on the guarantee. Typically it’s a time limit. The guarantee can’t go on forever. This was implied in my offer; our strategic offerings only last a few months.

Fifth, give them a range of options. “We’ll get to the decision point. Then we can decide to proceed, or we can decide to stop, or we can decide to stop and I’ll give you your money back.” This fifth point is not strictly necessary, but it’s a more realistic representation of the possible futures than just: “You get your money back or you don’t.”

How to make the offer

When it comes to making the offer itself, here are some tips:

  • Make the offer to one person, not to the whole room. This will be the highest ranking person at the prospect company.
  • Look that one person in the eye. Focus on them. Smile. You want to humanize this moment.
  • Slow down. You’re making an incredibly important point. Your audience should sense the room lights dim and the spotlight on your face grow brighter.
  • Tell them that you don’t do this for everyone. (That’s true, isn’t it?) They’ll feel special.
  • Frame your offer as a way to reduce their risk. You can call it “financial risk” or just “risk,” but you want to highlight the benefit for them.
  • Be confident. Exude trust and power, even if you’re shaking on the inside. This kind of offer is the mark of a supremely confident professional. It won’t work if you telegraph your doubts through tone of voice or body language. Don’t mumble. Speak up.
  • Place your offer carefully into the flow of the meeting. You probably don’t want to lead with it. Wait for the right time, and once you start, don’t let anyone interrupt you. Once you make the offer, pause. Let the silence stretch. You want to sear this moment into their memory.
    Then ask a strategic, high-gain question. The one I asked Sue was a variant of this one: “How many other firms are so confident that they can deliver outstanding results that they’re willing to guarantee their process?” You want to distance yourself from the competition.
  • Practice by making the offer to a few “gimme” prospects first. These are the prospects that won’t ever take you up on it, or where the cost of failure is so low that you could afford to pay them back. These types of situations are low risk for you. In using these as practice, you’ll learn what it feels like to make the offer, how the words sound coming from your mouth, and what types of responses are typical.

What could I have done better?

Thinking back over the conversation I had with Sue, there are some things I could have done better:

  • I should have sent her an email right after our conversation with the guarantee spelled out. This would have hammered home the point.
  • I probably shouldn’t have spent so much time questioning my competition. I was trying to draw distinctions, but looking back, I feel I might have overdone it.
  • I could have been much more clear about the three choices: if you don’t like it, we get a chance to make it right, in which case we’d proceed. But if we can’t fix it then we can decide to stop, or we can decide to stop and I’ll give you your money back.

That’s okay. I’ll do better next time.

Did Sue take me up on that offer of a money back guarantee?

We recently wrapped up the strategic engagement portion of the project with Sue. I had all 8 members of her leadership team in the room as my team and I walked through our findings and recommendations. At the end of the meeting, we do what we always do: ask them to fill out an NPS (net promoter score) survey. We got 9s and 10s from everyone, so our NPS score is 100%.

The next day I came into the office and sent Sue an email.

Sue,
I neglected to say one thing in our Monday meeting. I doubt I actually need to say it, but just in case, here goes:
Do you remember the sales conversation we had at the beginning of the year? That’s when I offered you a “money-back guarantee” on the strategy portion of our engagement.
Well, the strategy is set, so if you want your money back, now’s the time to ask.
Otherwise, full speed ahead.
David

Her response was simple:

David
Full speed ahead
Sue

By Win Without Pitching Coach David Chapin

MANDATORY READING – If new business wants more respect, it needs to become more proactive

Written by ChuckMeyst2015 on . Posted in Blog Posts, Business Development

Editors Note:  This passed my desk today and I shared via LinkedIn and FaceBook with the headline:

My God, this man has got it! And it took an outsider to make the point so simply clear. Attention all New Business Coordinators. Either step aside or learn what it takes to do new business as it needs to be done. (And if  YOU are a NB person take heed. And if you’re an agency owner/Manager, please pay attention).

There’s recently been discussion that the industry needs to support its new business managers more. As one myself it’s no surprise that I whole-heartedly agree with the sentiment: new business for any industry has a direct impact on a company’s growth, and there is nothing more important than this both culturally and financially.

However, I can’t help feeling like the role of new business has potentially lost its stature because we, as new business professionals, have let it happen.

I have only been working in the advertising industry for a few years – before I joined ad-land I worked in various ‘hard sales’ roles. And as an outsider looking into the industry, its definition of new business wasn’t really what I regarded as new business.

To me, new business has always leaned more towards a sales role than anything else. It has always been about developing narratives to persuade your target market that your product or service is the hand-in-glove fit for them and the answer to all their challenges. It is the proactive searching of the market to find clients that will benefit from your offering and then once you find them, building that relationship with them.

The admin has always come second for me. Don’t get me wrong, what comes after the initial contact is still absolutely critical to successful new business. But the hierarchy should always be proactive first, reactive second.

This is how it works in most new business roles, so why should it be different in advertising?

I think perhaps that new business departments or individuals have let their role become devalued. In far too many cases, the person responsible for new business in an agency is seen as the person who expertly answers the incoming RFIs or puts together the credentials document before an important client pitch or meeting. This isn’t new business; it is inbound admin at best.

The concept of waiting for briefs to come in is something that really grinds with me. In years gone by, the bigger, more established agencies have had the luxury of RFI after RFI landing in their inbox.

However, with the changing media landscape – as well as more and more clients looking to a wider range of agencies – this luxury is likely to become a rarity. Agencies can no longer afford to have their new business teams or individuals as in-bound sales or admin people.

The process of building relationships and actively trying to speak with prospects has become a lost art within the advertising industry.

‘Content is king’ is something that you hear at every new business breakfast, seminar and networking event. Yes, it absolutely is, but what is more important is what you do with that content. Posting content on your website or social channels is the easy part, but if we are honest it requires little effort.

Proactively shoving that content under the nose of your number one new business target in an engaging way is much harder. It can be easy to shy away from the harder work when it has become accepted wisdom that new business is more inbound then outbound.

If we want new business to be truly considered at the top table as a key cog in the machine – if we want our voices to be heard – then new business needs to stick its neck out. It needs to fight really hard to become a respected part of an agency’s makeup again – not by answering RFIs, building decks and getting good coverage in the trade press but by becoming more proactive, more outward facing and – essentially – more like sales.

It needs to take responsibility for driving the agency forward and making sure that every single person in the building comes on that journey.

Only then will us new business managers get our voice, one hustle at a time.

Jack Williams is head of new business at Atomic London

Good Business Comes From The Top Down

Written by ChuckMeyst2015 on . Posted in Blog Posts, Business Development

Intro: I responded to Paul’s post below with this comment: “You have painted a very disappointing picture of our industry but it explains why so many agencies struggle investing in the expenses of business development.” Meaning – with margins so thin, I could understand what has long been a reluctance within agencies to invest in agency business development. Paul responded: “I didn’t mean it to be disappointing. It is merely a statement of how things are and have become under the holding company model.” I’d suggest it’s disappointing that it’s come to this for the fine agencies within the holding companies.

======

After reading about Sir Martin Sorrell’s resignation as CEO of WPP, I decided to look at the composition of boards of all the major holding companies.  It was a revelation, but not surprising.

First, let’s understand the function of boards.  They are there to set policy and priorities for a company.  This includes a multitude of items from finance, dealing with the financial community, personnel policy, compensation, moral leadership and many other areas of policy.

Looking at the members of each of the holding company boards reveals what we have known for a long time.  The holding companies, despite recently establishing cross-function agencies to pitch and handle major accounts which report directly to executives of the holding companies (e.g. WPP’s Red Fuse which was established to handle Colgate worldwide is an example).  The holding companies are definitely not advertising companies.  Not even remotely.  They are financial firms. And most have
no board members who know anything about advertising, communications or people management.

All the major holding companies have similar boards.  They are made up of investment bankers, fund managers, an occasional senior executive from an advertiser.  With the sole exception of Omnicom, there is not one single board member with an advertising agency background.  There are no real human resources professionals (“our assets go down the elevator every evening”).  Although one company has an executive recruiter on the board, but that person was not an advertising recruiter.  All the emphasis appears to be on making and managing money.

The irony is that before the holding companies came along, there were plenty of agencies which were highly profitable and extremely well managed.  Just look at Grey, Bates, even Deutsch.  They were money machines.  But no longer.  The holding companies have stripped away their essence, leaving almost all the big agencies the same.

No wonder things are as they are.

There is no emphasis on the work.  There is a lack of creativity.    Salaries are out of line with similar industries (entry level salaries are particularly poor so that agencies rarely attract the best and brightest young talent).  There is tremendous employee turnover. Salary freezes are the rule rather than the exception ; raises are delayed, forcing talented executives to look for new jobs in order to make a livable wage. Profits in advertising are actually low compared to other businesses.  Morale at most of the major agencies is, at best, only fair.

I have no sense that the holding companies are dealing with any of these issues. Rather, what we hear about is dealing with Wall Street.

It is time for the holding companies to encourage creativity among their agencies.  P&G and Publicis demanding that their agencies work together to make a better product is laughable since threats don’t make good ads.  While working well together is admirable, good work comes from a strong self-positioning, employee belief in the work and the willingness to fight for it.  Doing better work comes from not being afraid of clients and fighting for what is right rather than simply giving in because it might affect the profit level to be turned over to their holding companies.  BBDO is a perfect example of this.

It is time for the silos to end.  And that can only happen when digital and above the line are all under the same roof and all working together.  Almost every agency president I have talked to agrees with this, but being able to affect this change is complicated by the holding company ownership.  All it takes is for there to be one appointed leader who controls the entire process and has both the authority and responsibility to make it happen.

Agencies are managed for profit, but they would be more profitable if they were managed to encourage growth and creativity.  This includes fighting back against the procurement departments of prospective clients; agencies must be allowed to make a reasonable pre-tax profit which will fund growth. It means turning down accounts if a reasonable profit is being denied to them.  But the holding companies are looking at additional revenue at any cost – even losing money on new accounts. By procurement insisting on lower costs, they are precluding their agencies from pushing back for better, work – the holding companies demand keeping business at all costs.  I know one story where an agency was losing money on an account and resigned the business, which actually made the agency more profitable.  The president of the agency had his wrists slapped by the holding company CFO and was told it was beyond his scope of responsibilities (despite his contract called for maximizing the agency’s profits).  The company wanted the revenues and actually didn’t care about the profits.

It is time to address the excessive turnover among advertising employees.   If people are the principal assets, they should be treated that way.  Training programs for juniors are a thing of the past.  There is  some training for very senior executives, but these represent an elite few.  Employees cannot obtain timely promotions and rotations.  Once upon a time not so long ago, these were built into agency operating philosophy, but now that clients can dictate who can work on their business and how much they get paid, this is also a thing of the past. Constant wage freezes, in order to generate and maintain profit for the holding companies, forces aggressive and high-functioning employees to leave.

The list goes on.

Today’s post courtesy Paul Gumbinner, President of The Gumbinner Company, executive recruiters for advertising.  www.viewfrommadisonave.blogspot.com 

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