Business Development

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

 

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.

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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 

The Four Criteria of New Business Success

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

It’s not your job to win more new business says today’s Guest Author Blair Enns

It’s your job to win the right new business. That means engagements that meet the following four criteria:

1. A proper-fit client that takes you one step closer to the strategic vision of the expert firm you are building
2.At high profit margin
3.With low cost of sale
4.And your firm positioned to have the greatest possible impact

Let me unpack each of these criteria and then give you some options for improving your new business performance across all of them.

Proper-Fit Clients
Whether you acknowledge it or not, you reinvent your firm one new client at a time. You should have a vivid and wildly important goal off in the distance that you are navigating toward. It’s a detailed vision of the expert firm you are building, and each new client is a step toward or away from that vision. No vision means no standards about what client engagements it makes sense for you to take on. A vision that is continuously compromised by a leader that keeps making exceptions for clients because of revenue or “the portfolio” is ultimately hollow and dispiriting to the larger team. A top-down vision is required and each new client engagement should be a measure of how serious the firm is about that vision. The vision exists or it doesn’t. It’s meaningful or it isn’t.

High Profit Margin
Profit margin is like power in the relationship in that it only diminishes with time. The new business person or team sets the profit standard with the very first sale, properly expecting that it’s all downhill from there. (The only question is the steepness of the slope.) Winning business on price while hoping to make it up later, or on volume, is not a valid approach for an expertise-based business. Profit diminishes as you move from the expert practitioner position in the relationship to partner status and then quickly to vendor. The slide is inevitable so it’s your job to start high with the first engagement at a price and profit level higher than the overall average you’re targeting.

Low Cost of Sale
Of course nobody wants higher costs than necessary but a low cost of sale is vital because it signals other more important things. Are you seen as the expert practitioner or just another vendor? Vendors have high costs of sale, low profit margins and lack the high ground required to challenge the client’s thinking. Your cost of sale is a barometer of the relationship and its power dynamics, which will ultimately play out in the engagement itself, impacting your ability to create value for the client.

Positioned for the Greatest Impact
The sale is the sample of the engagement to follow. To have the greatest impact on your client you must be allowed to lead. If you are not allowed to lead in the sale then you will not be allowed to lead in the engagement. That’s why winning a pitch or in any way winning new business while playing the polite, compliant rule follower is not good enough. You cannot be a good soldier in the sale, dutifully following orders, and then suddenly try to become the general in the engagement. That’s the definition of a coup. Rather, you should be navigating the sale in a way that sees you seamlessly take the lead, with the client allowing you to move naturally and unthreateningly from the vendor position to the expert practitioner position.

That’s what they teach in Win Without Pitching.

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7 WAYS TO CREATE NEW REVENUE STREAMS

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

Guest Author: Tim Williams, Ignition Consulting Group

Tim’s contributions are “spot-on” and we’re happy to share them when available. His content is significant and if you read carefully, it suggests that running an agency is clearly a full-time job (for those who missed that class).  The same goes for everything you find necessary for new business development.  With today’s litany of business development options, it make sense to bring in someone with special skills to teach and train your people. Many of the skills required today are not “self-taught.” And if not special people with special skills, engage a service that delivers “opportunities.” Is your answer to Tim’s first question “Yes?”

Would you like to earn money while you sleep? Most of your clients do. 

While most product and service companies have diverse ways of generating revenues, agencies and other professional firms generally don’t make money unless they’re recording hours on a timesheet. “Work a million hours, make a million dollars,” as the saying goes.

This is why the agency business is not really scalable. As long as your product line consists of “billable hours,” the only way you can scale your company is to add more people. And with the current pricing pressures on the time-based compensation system, this makes agencies perpetually high-volume, low-margin businesses.

But it doesn’t have to be this way. An emerging crop of innovative firms across the globe are successfully cultivating new revenue streams, diversifying their sources of income, and yes, even making money while they sleep.

How do they do it? Here are seven ways you can accomplish this in your own business.

1. Diversification
Purposefully diversify your compensation approaches with clients

Your personal investment portfolio (the money you’re saving for retirement) is diversified for a very good reason: you’ll get a much better rate of return. The same logic holds for your firm’s compensation portfolio. If your revenue streams are generated in a variety of different ways, you dramatically improve the chances of earning an above-average year-end profit.

2. Non-Standardization
Replace a standard rate card with an array of revenue options (a “pricing stack”)

Besides being remarkably uncreative, a standard list of hourly rates is a wildly suboptimal way to capture the value you create for your clients. When asked by a prospective client to supply your “rate card,” respond instead with your version of a “pricing stack” — an assortment of different ways your firm pricing its services. These can include such approaches as:

FIXED PRICE OPTIONS 

REVENUE SHARING

USAGE

DYNAMIC PRICING

SUBSCRIPTION-BASED

LICENSING

ROYALTDIES

3. Risk Management
Bet on your own success by injecting elements of risk in selected opportunities

Not every prospective client is a candidate for an outcome-based compensation agreement, but some are. When you sense an opportunity to get paid for marketplace outcomes instead of agency inputs, seize it. You’ll learn from it and get better as you go.

4. Productization
Turn selected solutions into programs and products

As stated earlier, labor-based services on their own are not very scalable. But programs and products are. By packaging up selected services into programs and products, you enhance the perceived value of your offerings and create the potential for new ways to charge for what you do.

5. IP Ownership
Package your intellectual property in ways that can generate recurring revenues

Most firms have a wealth of valuable intellectual property scattered across their file servers. This can be “productized” and licensed to clients.  Look for opportunities to license existing IP (software code, analytics dashboards) instead of approaching every assignment as “work for hire” in which the client automatically owns the IP. Why should your clients buy everything you do for them when they can rent some of it for much less?

6. Unmet Needs
Move beyond widely available services to develop solutions for the unmet needs of clients

The profit problems at most firms can be correlated directly with a service offering that the business strategist Clayton Christensen calls “overdeveloped services.” Good luck charging a premium price for something clients perceive they can get down the street at half the price. Instead, turn your energies to the “underdeveloped services” designed to meet the unmet needs of the marketers you serve.

7. Experimentation
Adopt a “test and learn” approach to generating revenue streams

The most profitable agencies we have ever worked with have the attitude that every new assignment is an opportunity to craft a new compensation approach they’ve never used before — the equivalent of a pricing “test kitchen.” They expect varying levels of success, but that’s the point. They learn from their experiences and get better and better at developing more creative, more effective ways of capturing the value they create for their clients.

*     *     *

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

“As a next step, I’d like you to come back with some concepts on what this campaign might look like.”

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

Guest Author – Blair Enns, Win Without Pitching

The client was politely but firmly taking charge, proposing what he clearly saw as a logical next step. Even though he was still a prospect at this point and not a paying client, he seemed to be conditioned to believe that our firm doing work for free made sense for all. I didn’t see it that way. Matching both his politeness and assuredness, I replied without skipping a beat, “We never pitch.” It was a lie. We pitched all the time but I was getting tired of it. I’d seen this film before and I knew how it ended. I wanted to try to change the ending, even if I didn’t know what should come after my small act of defiance. What made this particular exchange interesting though was that my boss, the president of the firm, was seated next to me and he replied to the client at exactly the same moment I did. “That sounds good,” he said. Cue the awkward silence.

It’s so long ago now that I don’t recall what happened next. I think I remember the three of us exchanging glances, Mexican standoff-like, but I don’t remember what language my boss or I spun to extricate ourselves with minimal embarrassment before we retreated to work on the pitch. I do know the client never hired us. I don’t think he hired anybody. It was the classic example of an overeager salesperson (me) mistaking interest for intent, and then an agency CEO, who had flown in for a meeting that never should have been, wanting to salvage something from the trip. Neither do I remember the details of the conversation with my boss that followed. I vaguely recall there was no real friction between us. I think he appreciated my alternative approach but would have liked to have known in advance what the play was going to be. The problem was that I myself didn’t know. I just sensed another client who was about to put us to work, for free, and not hire us.

If we list the things that went wrong on this opportunity, we find: 

1.     The client had not yet formed any intent to solve his problem, therefore, in all likelihood, the meeting never should have happened. At the very least it was poorly qualified beforehand. Wasting your boss’s time and money by having him fly in for a poorly-qualified meeting is a major no-no. In all likelihood, he was probably coming to town anyway and asked me to line up some new business meetings. (Again, the details elude me.) Such a request is perfectly legitimate but also enough pressure to cause a salesperson to set up meetings that shouldn’t be. I don’t remember anything about the dialogue that led to the meeting, but I’ll bet it was me pushing for it and not the client. In such a context the dynamics become clear, with the client thinking, “these people really want my business. Of course, they’ll bring me some free ideas!”

2.     We let the client lead in the meeting and then we agreed to follow even though the place he was leading us to wasn’t in our best interest, or at least I didn’t see it as such.

3.     We, my boss and I, were not operating from the same playbook. I had contradicted him in front of the client. If I had told him in advance how I wanted to handle such a request, I think he would have agreed to play it my way. He was a great that way. But it wasn’t part of any predetermined plan of mine either.

All the errors seem silly to me now, but back then I just didn’t know. I was a new business person. It’s not like there was anything that resembled training for this role. You copied what was done by those around you and those that went before you, based on the stories and the decks. And you improvised.

In the many years since this incident I’ve seen that this lack of cohesion on business development topics is common–perhaps even the norm–even if most examples don’t manifest themselves in a subordinate putting his boss in an awkward position the way I did. Just today I heard from an executive at a medium-to-large independent firm frustrated at the firm’s leadership team’s inability to get on the same page. “We have rules we’ve agreed to about when we will pitch and when we won’t but we break those rules all the time, and we always lose.”

There are so many different challenges that can affect a firm’s new business success, but not having everyone agree on some basic policies and procedures has got to be one of the most common and most significant.

If you’re trying to extricate your firm from a new business rut, a good place to start would be to get all the key players together (I mean ALL. Don’t let the chief transgressors skip this.) and agree on some basic new business rules, such as:

What do we require from the client before we will incur any expense?
What information do we need before we agree to a meeting?
Under what conditions will we respond to an RFP?
What is the smallest engagement it makes sense to take on?

Of course, agreeing on the rules and enforcing them are two different things. I suggest that once you lay out the rules, commit to a brief postmortem on each late stage opportunity (any opportunity that proceeds to a win or a loss) and, rule by rule, ask yourselves how you did. After a few such reviews, the patterns of transgressing and enabling will become clear. Then you need to decide what to do about  that . You can cross that bridge when you come to it. For now, commit to getting everybody on the same page by setting up the rules and reviewing every won or lost opportunity against them

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You’ve Landed a New One! Now 3 Principles of a Successful Client Onboarding Process

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

By Eric Taussig, Founder & CEO, Prialto

Making the client onboarding process successful is crucial for any service company.

When done well, your onboarding process is the mechanism through which your business development and/or sales team does an elegant handoff to your service delivery people. This instills confidence in your offering, and makes your new customer glad to have signed on with you.

Getting your client onboarding process right—especially when your service is offered remotely from a globally distributed team—is even more important and difficult.

Below, I outline three principles we’ve kept in mind while structuring our onboarding process, a process that we see as foundational to Prialto’s success.


3 PRINCIPLES OF A SUCCESSFUL CLIENT ONBOARDING PROCESS

1. Make the new customer glad to have signed on with you

Savvy buyers are always hesitant to sign on to a new service. They fear the inevitable productivity dip that takes place before a new service becomes additive.

Our new customers are particularly fearful. They worry that they will need to provide a lot of heavy personal management time to make our service work in light of our virtual assistants residing a world away in Asia and Latin America.

To overcome this, we work to awe the customer with the amount of management support we will provide on their behalf. We put their entire support team of virtual assistants and their manager on the onboarding call so that they hear from each person and understand how each of their roles will help make the service exceptionally “turnkey” such that the productivity dip common in adopting a new service will be minimal.

This addresses one of the greatest fears with which the customer comes to the new relationship. It puts them at ease and encourages them to follow our lead.

Instead of regretting that they’ve signed on, they rightly feel smart for having done so.

2. Create a detailed, personal and professional context around which to collaborate 

Contrary to conventional wisdom, studies show that when meetings begin with a bit of personal sharing they are more productive than meetings kept to “just business.” Sharing and honoring the personal context in which work is conducted creates the trust and respect that is foundational to work collaboration.

We begin each onboarding call by introducing each of the several key Prialto employees who comprise our new customers’ support team. By this time, we’ve already sent the new customer a detailed biography of his/her primary virtual administrative assistant. On the call, we outline each of the team members’ roles in helping the customer.

We then ask the new customer to introduce him/herself. While making the request, we invite the new customer to tell us about both the professional and personal aspects of his/her life.

When the new customer pauses, the Prialto team comments or asks follow-up questions to show that they understand the professional life being described, the personal world in which it takes place, and the connections between the two.

We follow these introductions with a series of preference questions. Many of these preferences might have been collected in advance of the call via a web form or survey. However, asking the questions on the call allow us to follow-up with personal insights and questions that further build trust, primarily my telling the new customer that “we’ve been here before.” We have worked with people like him/her, and we know how to successfully lead a busy professional through the productivity dip to the “sweet spot” in which the service we offer is creating lasting value.

These questions and introductions also help bridge the context gap between our customer operating in a high pressure North American business environment and the world in which our virtual assistants live in Latin America and Southeast Asia.

3. Begin taking steps to ensure continuity

Customers who sign on with a firm for a new service are often attracted by one particular partner, employee or executive. But the firm and the customer hope the service is not dependent on any one or two people.

Building continuity of service starts with the client onboarding call. That’s why the call should never be with just one person. It should always be with the broader support team.

It’s important to note that someone on your team should always document all preferences and key information shared on the call. And whenever possible, the call should be recorded (if that’s okay with the new customer).

THE ONBOARDING BRIDGE

Services are difficult to sell because of all the trust building required between provider and buyer. The provider must convince the buyer that the productivity dip will be minimal, and the buyer must convince the provider that s/he will be a customer capable of riding out the productivity dip.

A good client onboarding process will:

  • Help the new customer slow down in a time-efficient way in order to get started
  • Help overcome the business and social context gap between the service provider and service buyer
  • Begin the process of ensuring continuity of service for both the firm and the customer

By proactively addressing each of these bulleted needs, the onboarding process becomes an elegant handoff from sales to service that positivity defines your brand.

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Five Rules for Pursuing Project Work – Applies to Agencies of All Size

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

Some firms don’t take project work at all, while for others project revenue vastly outstrips the income from their few ongoing clients. What’s the proper role of project work in your firm, and what’s the proper approach to pursuing or vetting it? In this article I lay out some specific guidelines on projects as a part of your overall client mix, and the rules of pursuing and accepting project work.

My own experience has been that the most profitable firms are the ones with what I would call ‘tighter’ client bases – fewer, more loyal clients who entrust their firm with a large percentage of their budgets, rather than breaking it up among many firms. Although I haven’t formally quantified this, it has been my experience that firms with higher volume of project work are busier but less profitable than their more AOR-focused counterparts. While I’m a firm believer in the idea of ‘fewer clients, more money,’ I recognize that for many firms project work is helpful at plugging capacity gaps. What follows are five rules on pursuing and accepting project work, and some final guidance on the mix of projects to longer term engagements.

Rule #1: Don’t Chase It

It may be okay (or even highly lucrative) to take project work, but, with few exceptions, most established firms shouldn’t be pursuing it. Your business development goals should be focused on replacing your outgoing clients with even better, more lucrative incoming clients, while striving to keep the ongoing client base at somewhere between eight and twelve clients. Through regular business development activities, and just by answering the phone, project work will come at you. Short of finding enough project work, your bigger challenge is probably saying no to the bad stuff, so don’t focus business development resources on an outreach program that targets project work. Project-based opportunities are a natural by-product of targeting larger ongoing engagements, but with rare exceptions, you should not be devoting business development outreach attention or resources to it.

Rule #2: Don’t Offer Incentives for It

Your business development incentives should be focused on rewarding personnel for managing the churn of on-going clients, and should not reward for project work. Discretionary bonuses for project work, at the end of the year, are okay, but keep the focus, and the incentives, on the larger ongoing clients.

Rule #3: Object to It

When a prospect inquires about project work, the first thing you want to do is remind him that you are not in the project business. “We’re not in the brochure business. We’re in the business of creating total brand experiences.” (As a broad hypothetical example.) “We often do brochures as part of that, but if someone’s just looking for a brochure we usually refer them elsewhere. Let me ask you, is your brochure part of a larger undertaking?”

If your efforts to uncover a more comprehensive need come up empty (“No, we just need a brochure,”) you still have the option to take the work. “Before I say no, let me ask you a few questions…”

If your questions into the project reveal it to be a potentially lucrative one, and you happen to have the capacity then perhaps this is a project worth considering. Either way, by leading with your objection (“We’re not in the brochure business”) you should have positioned yourself well if the project is indeed a desirable one. It’s now the prospect’s turn to talk you into waiving your no-project policy and taking this on. Remember that you reserve the right to retract every ‘no’ or every objection or obstacle that you place in front of the prospect. Creating these objections allows you to gauge whether or not he recognizes and values your expertise. As you begin your retreat from the opportunity does he follow, or does he let you walk away?

Rule #4: Don’t Compete for It

You’ve established with the prospect that you are not in the project business. You’ve questioned him further about the assignment and found that it is indeed well suited to your firm and could be quite lucrative. If the capacity to do the assignment is there then this might be a project worth taking. Before you remove the obstacle (“We don’t do projects”) make sure that every other potential obstacle to doing business is identified and addressed.

You don’t want to say, “Okay, we’ll do it,” only to hear, “Great – we’ll get back to you after we talk to three other firms,” or, “Good, I’ll send you the RFP.”

You might say, “If we did decide to waive our no-project rule and take this on, what would need to happen before we agreed to get started?” If you hear, “We would need to meet with the other firms and decide on one,” or “I need to get approval from my boss,” then your job is to direct the prospect to go do what he has to do, then come back to you for a decision on whether you will waive your no-project policy afterward. If the prospect tries to put you to work (responding to an RFP as an example) then politely send him on his way. You want to get to the point where the prospect says, “We’ve ruled out other firms – we’d prefer to work with you, and I have approval to hire you right now if you’ll accept the assignment.” Then and only then do you agree to remove the objection – your no-project policy, and take the assignment.

Rule #5: Don’t Take Tactical Work That Would Neuter Strategic Opportunity

You’ll often encounter a prospect who dangles a project in front of you as an opportunity to ‘test the fit’ before they commit to you. While it is perfectly appropriate for you to agree to take a small first step with a client in order to assess the fit for a larger engagement, a first step should be just that – a first step and not a sample twenty-fifth step. By this I mean start at the beginning, which is almost always your diagnosis of the problem, or your validation of the client’s own diagnoses. To jump right to project work that is based on a bunch of assumptions may offer insight to the client on what it would be like to work with your firm on a daily basis, but it will offer no insight into your more valuable (and lucrative) strategic problem solving skills. Further, you’ll have to do some form of strategic work (diagnose and prescribe) to be able to deliver a tactical solution, but you’ll do it without the client’s full involvement, without fully applying your methods, and without appropriate compensation.

In short, don’t agree to a tactical ‘test’ that will only position you as a tactician and impair your ability to get paid for the strategic engagements. You’re better to suggest a phased engagement that has the two parties begin at the beginning, with your diagnostic and strategic development processes. Offer an opt-out point somewhere between strategy and creative platform at which the client can walk away if they don’t like the fit, or the work you’ve produced. You can further sweeten the pot by adding a money-back guarantee for the first phase. Together, these steps allow you to begin at the beginning, charge fairly for your strategic work, and allow the client a test period and an escape clause with no financial risk.

Summing Up

It should be clear now that I am not advising you to decline all project work. Focus on the larger on-going assignments. Don’t offer incentives beyond discretionary year-end ones for project work. When the subject is broached, lead with the objection that you’re not in the project business, then search for a larger underlying opportunity. If the project seems like one you should take, make sure you get every other potential objection dealt with before you agree to take it. And finally, never put the cart before the horse and agree to take a tactical project as a test of a more strategic or total engagement.

A Healthy Project Mix

What should your revenue mix be – project-to-AOR? If your total project work represents more than 25%-30% of your revenue, I suspect you might be doing too much of it and impairing your ability to more lucratively position your firm as an expert advisor seeking more complete, longer term engagements.

Four Steps To Lead Generation Success

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

by Blair Enns of Win Without Pitching

“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” John Wanamaker

Amen, brother John. Amen. When it comes to the various ways a creative firm might generate leads at the top of their funnel, I’ll admit that for too long I’ve been guilty of saying “Do all these things… some of them are bound to work.”

Blogging. Speaking. Webinars. Outbound calling and emailing. Networking. The more you can do, the more leads you’re likely to generate. It’s hard to argue with the general principle but it’s reasonable to expect that someone like me who has seen the insides of hundreds of firms should have some theories for what works and what does not. I do now, but I’ll admit that it’s taken me an embarrassingly long time to tease out some of the patterns of effective lead generation.

Below are some principles for reducing the lead generation waste. Before I share them, allow me to reiterate my usual caveat about positioning: good marketing for something that has many substitutes isn’t good marketing at all. Marketing begins with assessing what is missing in the market and then matching a solution to that unmet need. If you don’t have something that is meaningfully different to some market segment then lead generation will always be difficult.

With that out of the way, here are four steps to building a simpler, more powerful and less wasteful lead generation program.

1. Bet On One Thing
If you had to bet all your chips on just one lead generation vehicle, on which would you bet? Put another way, if you were only allowed to undertake one activity or form of lead generation for years to come, which one would you choose? Few reply that they would smile-and-dial although that is what many have done for years. Most pick something that would drive inbound leads, like a blog, speaking, writing a book (or books). Some might launch a YouTube channel. Some a podcast. What One Thing would you do?

When I think of the firms that drive numerous inbound leads they all have one very clear thing they do. Their lead generation efforts are as focused as their positioning. They’ve resisted diluting their efforts across numerous channels, avoiding Warren Buffet’s admonishment that “Diversification is for people who don’t know what they are doing.”

To Buffet’s quote I will add my favourite from Peter Drucker. “In business, all profit comes from risk.” The rewards you seek (high-quality inbound leads) are more likely to come to you if you take some risk and bet on One Thing. Risk mitigation is at the root of lead generation inefficiencies. Focus more, take more risk, and do less.

Your One Thing should constitute between 60% and 80% of your lead generation resources of time and money.

2. Now Pair It With a Complementary Thing
Marshall McLuhan noted that media tend to travel in pairs. Newspapers deliver type. Television, video. The Internet can deliver type, video or audio. The same principle applies to your lead generation One Thing, albeit more loosely, like a complementary pairing of wine and food. If you choose to write books, as an example, it will pair nicely with speaking, or blogging. Perhaps the blog becomes the vehicle through which you write the book. Or the speeches are the now-easy-to-obtain platform that get you face to face with your prospects after the book is written.

The key though is to decide on the One Thing and then pick the second Complementary Thing that helps you achieve or leverage the One Thing. If you misuse the idea of a Complementary Thing to hedge your bet on the One Thing then you will just create more work for yourself and dilute your impact. It really is One Thing aided by a truly Complementary Thing. Once you get traction with your One Thing, numerous Complementary Things will present themselves to you and many will be easy to pull off. You are free to pursue them or to remain focused on your One and Complementary Things.

3. Strive To Own The Channel
When choosing your One Thing choose something that you can own or dominate. I know firms that have founded conferences, networks, radio shows and other lead gen channels in which they had such a massive presence that it just would not make sense for competitors to try to replicate or follow. To choose blogging in a field where everyone is blogging and a competitor is already dominant might not be the wisest decision. Seth Godin blogs and writes books. He decided against other social media because, in his words “I couldn’t be the best in the world at it.”

Another book on branding? Probably not ownable. If someone has already written the definitive book on your area of expertise perhaps you should look for another channel. If the space is crowded with books but none that truly stand out then sure, got for it, but you really have to have something new and meaningful to say.

One more smart, but not belief-rattling, blog on healthcare marketing? That field is crowded. A YouTube channel or virtual conference, however? Those might be easier to dominate.

There’s a nuance here that I won’t be able to fully explore in this brief post and it centres around the idea of perspective. Perspective–an over-arching point of view on the firm’s area of focus–is the final differentiator that separates a well-positioned firm from its few remaining direct competitors. If your perspective is strong enough (contrarian but still accessible) then you don’t have to seek to dominate a marketing channel in your market, you simply need to dominate that point of view within it.

With a strong contrarian perspective it may make sense to launch an assault on a larger competitor’s dominant channel with the goal not to replace them but to carve out a devoted niche and achieve “leading alternative” status.

4. Consider Leveraging Your Discipline
It’s interesting to note that advertising agencies almost never advertise, direct marketing firms almost never build formal direct-based lead gen programs for themselves, experiential marketing firms rarely create their own experiences to drive leads and while most public relations firms claim to get business through word of mouth, few employ a formal plan for themselves like the ones they might sell to a client. Only social media firms seem to embrace the discipline they trade in to drive their own leads.

In the Win Without Pitching program we have a full term dedicated to Closing With Case Studies–an approach that uses carefully built IP-based case studies to derail pitches and eliminate unpaid proposal writing. Using “process-framed case studies” to close this way is powerful, but it is even more powerful when you use your own firm as one of your case studies.

Put yourself in your potential client’s shoes for a minute: from whom would rather buy discipline X?

A) Someone who does not use it
B) Someone who uses it
C) Someone who uses it and can use their own firm as a case study for how they use it and why you should use it too?

Someone in category A will lose out to someone in category B most of the time, and will lose to someone in category C almost all of the time.

In summary, bet on One Thing. Then add a Complementary Thing. Strive to own the One Thing channel you select, and if you cannot own the channel strive for the leading alternative in the channel by owning a provocative point of view, one that’s contrary to that of the leader’s. Finally, if at all possible, make that One Thing the discipline that you sell or most often trade in. The combination will focus your efforts, reduce waste and make you far more compelling to your target market.

P.S. – Chuck writes “I have to admit; I was hoping Blair would be even more specific!”

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