Marketing Consultancy

Traditional versus digital: Why does it even matter?

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

Traditional media has met its match with the advent of digital, and the advertisers have been weighing out the pros and cons for each medium to make spending decisions ever since. Media players however, are now saying the debate should stop because at the end of the day, content is king.

Havas Group Singapore’s chief executive officer, Jacqui Lim said that contrary to popular beliefs, the first steps for her team after receiving a brief and budget from the client is not to build a media plan and decide which channels. Instead, a lot of planning goes into optimising metrics and understanding what hits the right key performance indicators. This is driven by clients’ expectation for the agency to look at things in an integrated, platform-agnostic and audience-centric fashion.

Your Guide Chuck Meyst, Chairman

To decide on the right medium, there are several dimensions to consider, Lim said. For example,

Clients believe in a much more trackable and attributable kind of platforms, but the traditional or broadcast media comes in to help us amplify.

Rather that choosing traditional “or” digital, general manager of Unilever Singapore Banjo Castillo advises that advertisers shift their mindsets to “and”, and move the conversation towards how they can make the best use of finite resources.

With consumer journeys crossing not just media platforms but different screens as well, Castillo said that the company is focused on building its data-driven capabilities to boost campaign efficiency. This includes precision and performance marketing.

Havas’ Lim suggested a more unified currency for traditional and digital media buys, where television goes programmatic, and measurement and targeting are as transparent as that of digital. She added that making interaction and engagement metrics possible will also assure clients that they are making meaningful connections with their customers.

Understanding consumers

Additionally, the panellists at the event hosted by Mediacorp urged marketers to focus on effective storytelling as content is what matters to people and catches their attention. Ajay Vidyasagar, regional director, YouTube partnerships, who had previously also spent almost two decades in the television industry, said that digital has not only changed the way viewers consume, but allowed people to create content as well. This was what led to a surge of users on YouTube. He added,

“The walls between digital and traditional media are truly breaking. Consumers want content when they want it, in a form that they are able to consume, on a device they are comfortable reaching out to at that moment.”

Meanwhile, Castillo said that marketers can leverage digital to craft messages and develop products tailored to customers’ wants and needs. Digital has for instance, changed the way Unilever gets to know its customers.

He added, “When we do consumer research, it takes three to six months to come in, before we even get to analyse it. Now, through the power of digital, we can actually do social listening, and learn about consumers on the fly.”

by  Courtesy the MARKETER

Find out why Connelly Partners’ leader doesn’t want staff to work from home

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

by Lindsay Stein, Campaign Magazine

But the agency president and copywriter does believe in work-life balance.

Connelly Partners’ President and Copywriter Steve Connelly believes that working from home kills agency culture. However, he also tells employees, “If you don’t have a life outside of the office, you are useless to me.”

These are two of Connelly’s “strands of DNA,” which he tells Campaign US is a “blend of pragmatism and some basic human tribal beliefs I have that help us yield good work.”

He explained that no one can be creative 24 or 12 hours a day and he doesn’t expect staffers to work very long hours, but he does want them to be focused when they’re in the office.

“I have kids in their 20s and I certainly hear a lot about liberal work from home policies and I think that’s fine if you’re into productivity and staying connected, but if your focus and priority is culture, which mine is, then you have to be in the office, you have to talk to people and feel the energy around you,” he said.

But this doesn’t mean the agency doesn’t believe in work-life balance. Connelly said that if a staffer needs to work from home because he or she needs a mental health day or has a sick child, he’s totally fine with that. Plus, the shop offers unlimited vacation days.

“What you need to do to take time to refresh and stay charged and bring new experiences into the office you should do, but I’m not saying that I’ll pay for three days and then have you work from home on the fourth and fifth day. That’s not culturally beneficial,” he said.

Mothers who want or need to work from home are on a case-by-case basis. Connelly said he wants to make sure he stays connected with working moms and gets them back in the workplace, but he says if you’re in a leadership position, “You can’t lead by phone – you need to lead by example.”

He said he’d rather have a working mother tap into a truncated schedule in which she comes in earlier and leaves earlier than have her work from home.

Connelly also strongly believes in having a life outside of the office. “The more successful you become in this business, the more you’re taken away from what made you successful – the everyday things and people,” he said.

He added:” If you’re job is to tell so a wide range of people, you better be able to observe a wide range of lives. Go learn, live and find, and sometimes you suck up experiences without even knowing it.”

The agency’s culture is “familial” and “imperfect like most families, but with a lot of honest inside,” according to Connelly. The shop was built around a living room, kitchen table and bar because those rooms are often where the best conversations take place. “It’s a very educated treehouse,” said Connelly.

For agencies looking to figure out or build their own cultures, Connelly has some advice: “Please understand that culture is organic  If you’re going to commit to culture, understand that you are the dirt, not the seed or plant, and your job is to provide the best growing environment.”

Note: Steve Connelly and his agency are proudly “one of ours!”

Once the rage; Now everyone hates open offices. Here’s why they still exist

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

Employees don’t like them. Research proves they’re ineffective. Why is it taking so long for us to get rid of them?

First, you tear down the walls and dispense with the soulless cubicles. Then you put everyone at long tables, shoulder to shoulder, so that they can talk more easily. Ditch any remaining private offices, which only enforce the idea that some people are better than others, and seat your most senior employees in the mix. People will collaborate. Ideas will spark. Outsiders will look at your office and think, This place has energy. Your staff will be more productive. Your company will create products unlike any the world has ever seen.

There’s just one problem. Employees hate open offices. They’re distracting. They’re loud. There’s often little privacy. “The sensory overload that comes with open-office plans gets to a point where I can barely function,” says one 47-year-old graphic designer who has spent more than two decades working in open environments. “I even had to quit a job once because of it.”

For as long as these floor plans have been in vogue, studies have debunked their benefits. Researchers have shown that people in open offices take nearly two-thirds more sick leave and report greater unhappiness, more stress, and less productivity than those with more privacy. A 2018 study by Harvard Business School found that open offices reduce face-to-face interaction by about 70% and increase email and messaging by roughly 50%, shattering the notion that they make workers collaborative. (They’re even subtly sexist.) And yet, the open plan persists–too symbolically powerful (and cheap) for many companies to abandon.

As with so many things today, we have Google, at least in part, to thank. Open floors have existed since the secretarial pools of the 1940s, but when the then seven-year-old Google renovated its headquarters in Mountain View, California, in 2005, the lofty, light-filled result was more than a showcase for the company’s growing wealth and influence; it signaled the dawn of a new professional era. Architect Clive Wilkinson eschewed the cubicle-heavy interiors of the company’s previous office for something that resembled a neighborhood: There were still some private spaces, but also lots of communal workplaces and small, glassed-in meeting rooms. “The attitude was: We’re inventing a new world, why do we need the old world?” Wilkinson says. With Google’s rise, his vision for a collaborative workplace took off. “We had [companies] come to us and say, ‘We want to be like Google.’ They were less sure about their own identity, but they were sure they wanted to be like Google.”

Around the same time, a more radical version of the open office was emerging from other startups founded during the dotcom boom of the late ’90s. As these companies proliferated, they looked for cheap ways to differentiate themselves from each other and their predecessors. They found inspiration, Wilkinson says, in the more playful offices that had long been common in the advertising industry. Some moved into the unfinished lofts of San Francisco’s South of Market district–and left them that way. Walls only make things complicated when you’re rapidly adding (and eliminating) staff. “Those places were terrible,” says Joel Spolsky, who cofounded Fog Creek Software in 2000 and is currently the cofounder and CEO of Stack Overflow. “They were so loud, because there were no drop ceilings. It was painful for everybody. But [dotcom startups] were doing it because they had literally no choice.” Out of necessity, an aesthetic was born.

By the time Facebook opened its Frank Gehry–designed Menlo Park headquarters in 2015, the open office had become not just the face of innovation in Silicon Valley but a powerful metaphor. Facebook now houses roughly 2,800 employees in a 10-acre building that the company claims is the largest open floor plan in the world. “The idea is to make the perfect engineering space: one giant room that fits thousands of people, all close enough to collaborate together,” founder and CEO Mark Zuckerberg wrote when he announced the design in 2012. Famously, he has a plain white desk in the communal area, just like everyone else. (He also has a private “conference” room, where he is rumored to spend much of his time.)

The whiff of disruption that open offices carried became irresistible to startups and established companies alike. “When you talk to leaders in corporate real estate or CEOs about why they designed their space [in an open plan], most will give some fluffy answer,” says Ben Waber, cofounder and CEO of workplace analytics company Humanyze, which uses sensors to track how people use offices and interact with each other. “But when you dig down, it’s because this is what the workplaces look like at a couple of highly successful tech companies.” Calvin Newport, a computer science professor at Georgetown University who studies how people work, takes an even more skeptical view: Open offices have become a way to indicate a company’s value to venture capitalists and talent. The goal is “not to improve productivity and collaboration, but to signal that the company [is] doing something interesting.”

According to Humanyze, open plans are great at encouraging interaction between teams, which is useful when a company is trying to create new products. But they are terrible at encouraging interaction within teams, which is necessary for execution-based work, like writing code, when employees need to be in sync. An open office might be suitable for a company coming up with new ideas, but when someone has to implement them, it becomes distracting.

Of course, one of the main reasons that business leaders default to open plans is simply that they’re inexpensive. According to commercial real estate association CoreNet Global, the average space allotted to individual employees globally fell from 225 square feet in 2010 to 176 square feet in 2013, and is projected to keep decreasing. This adds up to hundreds of millions of dollars–or more–in savings per year at the country’s largest companies, according to calculationsfrom Erik Rood, an analyst in Google’s human resources department who examines corporate financials on his personal blog, Data Interview Qs.

Perhaps no company has exploited these efficiencies more than WeWork, which popularized communal tables and lounge areas in its coworking hubs and now builds out offices for other companies. WeWork distinguishes itself by using its data to compress people into smaller areas–it recently took Expedia’s Chicago office from three floors to two–without, it says, sacrificing employee satisfaction. Liz Burow, WeWork’s director of workplace strategy, says that this entails bringing people closer so they interact more, while also creating a variety of seating arrangements and, yes, even some private areas. “People have different needs throughout their day and their life,” she says. “They might need to focus at a certain point and talk to someone at another point.”

Many architects share this vision. Janet Pogue McLaurin, a principal at the architecture firm Gensler, which has designed dozens of prominent corporate offices, says that the most effective open plans include a host of meeting rooms and private areas for deep concentration. “Innovative companies actually use more spaces throughout the office,” she says. They don’t expect the desk to be the center of an employee’s work life.

It’s an enticing idea. But, as WeWork has found, the most expensive part of an office is the small meeting room. As a workaround, WeWork offers its enterprise clients phone booths–basically, portable pods that can be dropped right into an existing layout.

At 15 square feet, they’re rather tight for a private office. But at least there’s a door.

A Great Read by Katharine Schwab, an associate editor at Fast Company

To Increase Agency-Client Trust, Align the Incentives

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

Contributed today by Tim Williams of Ignition Consulting Group

The level of mutual trust between agencies and their clients is at an all-time low. There are many culprits, some historical and perennial, some temporary and episodic. The current debate over media “transparency” is a manifestation of the erosion of trust in agency-client relationships. But it is also symptomatic of the underlying cause of this mistrust.

Clients surmise that agencies are making money on media transactions that are not being fully disclosed. In many regions of the world, agencies earn not only a commission from the media, but also an AVB (agency volume bonus) — effectively a rebate from media properties based on total spend. In areas like Latin America, this is completely understood by clients and fully disclosed by the agencies. In fact, many agencies in these regions are heavily dependent on these volume rebates to make their numbers.

Black boxes

In the realm of digital media, the digital media distribution chain extracts up to 60% of every media dollar spent. Clients are understandably concerned that less than half of their digital media budget actually results in consumer exposure (and even then, just a few seconds’ view of a banner ad often qualifies as “exposure”). The digital media chain can indeed seem bloated and wasteful, and large marketers like P&G and Unilever have called for greater efficiencies and fewer handoffs in this chain.

An important part of this string is the audience data owned by third-party aggregators, the media themselves, or even agencies. Many of the large agency networks are able to add considerable value in the digital buying process by applying algorithms, appending data, and employing machine learning to enhance the effectiveness of audience targeting and delivery. In some cases, these technologies are viewed as “black boxes” by clients, and some marketers are concerned they don’t have full visibility into the process and costs involved.

The wrong end of the telescope

Underlying all of these issues is what I believe is the real problem: agencies have taught their clients they can have a full, complete, detailed view into every aspect of the agency’s business, right down to salaries, overhead costs, and margin. This, in effect, puts the client in charge of the agency’s finances. Procurement professionals now dictate which agency individuals are assigned to which projects and how many hours they can spend. They impose “industry benchmarks” on virtually all aspects of agency overhead costs, right down to rent and health insurance. In some cases, they decide the individual year-end bonuses of agency team members. That, by any reasonable standard, is insane.

Since when is it the buyer’s job to manage the margins of the seller? Why should it be the prerogative of a client buyer to dictate to a professional service firm how much profit they’re allowed to make? More to the point, how did this happen? It happened when agencies made the misguided decision to adopt a pricing methodology that dates from the industrial age: cost plus. The cost plus approach spawned a series of unintended but nonetheless pernicious consequences, ultimately producing today’s undesirable state of affairs.

Ceding responsibility

By definition, the cost plus method requires that all seller costs be disclosed, and buyers therefore feel they must be vigilant in tracking and verifying these costs. What if the agency is submitting inaccurate timesheets? What if they’re charging for time that was never spent? What if they’re overstaffing the business? What if they’re earning money in ways we can’t see?

In the world of multinational agencies, what should be purely internal agency management decisions are now monitored and governed by client buyers. Hence mandated audits of agency time and materials. Hence third-party cost consultants. Hence lack of agency-client trust.

To illustrate the futility of buying buckets of time, my friend Bruno Gralpois of Agency Mania Solutions provides the analogy of enjoying a fine meal at a restaurant.  As you take your place at the table, instead of ordering items from a menu with published prices, you instead ask the restaurant how many cooks will be needed, how much each of them will be paid, and how many hours it will take them to prepare your meal. Ridiculous? Yes. And it’s also a ridiculous way to buy professional services.

A simple remedy

The prevailing cost plus approach appears to be a circular conundrum, but the remedy is actually simple: agencies must stop selling their costs.

Imagine the immediate change it would make in agency-client relationships if clients bought effectiveness instead of efficiency. Marketers would cease to care how many people are assigned to their business if the agency compensation was based on the quality of the outputs instead of the quantity of the inputs. In this scenario, both parties would care about the same thing: deliverables and results, not time and materials.

In retrospect, the original commission system was far superior to cost plus. The only way for agencies to earn more money was to create effective work and make effective media placements, because that’s what spurred increases in client spending. Success breeds success. Clients in the days of Mad Men could have cared less how many people were in a meeting, because they knew the agency had the right incentive to include only the people who were essential to producing effective work and growing the brand.

If there’s one overarching principle of economics, it’s that incentives matter. As economist Stephen Landsburg observes, “Most of economics can be summarized in four words: ‘People respond to incentives.’ The rest is commentary.”

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. 

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!

 

Instead of Lowering Your Price, Lower Your Client’s Risk

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

Guest Author, Tim Williams

You’ve just found $100 on the sidewalk. Should you put it under your mattress or buy a lottery ticket? What role does your tolerance for risk play in your decision?

In business circles, risk is almost always treated as something to be minimized. But can risk also be an economic positive?

The iconic Peter Drucker made a profound observation when he said “All profit is derived from risk.” Ponder that truism as you consider the nature of the compensation agreements you developed over the last 12 months. It’s likely you injected little to no risk in your proposals, which is in directly violation to the principle that if you want to make more money, you must take more risk.

Harvard’s Benson Shapiro offers this perspective: “Performance-based pricing is insurance. It insures that the seller does not undercharge the buyer.” In other words, introducing an element of risk in your compensation agreements not only holds the potential of making more more, but also making you a better pricer.

Who Bears the Most Risk in Agency-Client Relationships?

Now let’s look at risk from another perspective. Jack Skeels of AgencyAgile believes “The primary mediating characteristic of buyer-seller relationships is how risk is handled.” Says Skeels:

“When we ask agencies, ‘Who carries more risk in the relationship, you or your client?’ the answer is almost always ‘We do.’ Nothing could be further from the truth. Your client carries more risk than you do … by a million miles … Clients are completely vulnerable to your efforts (which they don’t see, understand or control), and when you fail, they can die.”

The method of agency compensation is an important factor here. Clients who buy hours are really only buying buckets of inputs that may or may not correspond directly with the needed outputs. But more importantly, these inputs may or may not produce the desired outcomes. Herein lies the risk being taken on by the client. The agency will work its hours and collect its fees regardless of whether or not the work is effective. While every good agency desires to do good work, there is no real economic incentive for them to do effective work.

True, the agency can get fired at the end of the contract period, but that misses the point. After nearly 30 years using the hourly rate system, smart clients have realized that this approach has a fatal flaw. Brand growth has been stagnant for more than a decade, and most major marketers have been slogging along in a low-growth mode, unable to generate the needed ROI on their marketing investment. These clients have now concluded that the hourly rate system does absolutely nothing to help this situation; they’re simply “renting people” in advertising agencies.

Accompanying this current low-growth cycle for brands is an understandable low-cost mentality. Hence the rise and power of procurement. The prime directive at corporations everywhere seems centered on efficiency and cost cutting.

But what are these client organizations truly buying? No company ever saved its way to success. My friend Tom Lewis, formerly of the IPA, observes that professional buyers of marketing services are now squarely in the habit of attacking the seller’s cost base, insisting on as low a profit margin as possible while purposely leaving workload ill-defined. This, Lewis says, results in a low seller’s profit and a low cost of purchase for the buyer. In return for a lower price, the buyer unknowingly accepts compromised quality and effectiveness.

So instead of complying with buyer requests to lower costs— which will not provide the client with what the results they’re attempting to procure — could agencies instead lower their client’s risk?

Three Things Clients Buy

One of the world’s foremost business strategists, Michael Porter, asserts there are three main reasons businesses buy the services of companies like agencies:

To increase their revenues
To lower their costs
To decrease their risk

While most agencies don’t know it, even the most hard-core procurement professional thinks in these terms. Former WPP head of procurement Tom Kinnaird emphasizes that cost is just one of four areas in which procurement professionals seek a “win.” They also seek to obtain value, maximize cash, and minimize risk. This risk can take the form of:

The risk of suboptimal performance by the seller
The risk of not receiving the promised features and benefits
The risk of the service provider not producing the agreed-upon results

Writing in the WPP publication Atticus, Scott Brenman proposes the idea of a “threat audit” to help identify risks your clients face. He then recommends including on briefs a section about risks and threats to keep both agency and client focused on ways to minimize them.

KBS+ co-founder Jon Bond believes that agencies aren’t really in the ideas business — or even the results business — but rather the insurance business. The best agencies, he says, embrace the idea that their essential purpose is to reduce risk for their clients. Bond proposes that agencies should proactively sell their services this way, which he believes leads not only to more new business wins (risk reduction is a powerful proposition) but also better pricing (the best insurance companies command the highest premiums).

In the end, Bond says, “Economics are more powerful than negotiation.”

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.

THE DISRUPTIVE AGENCY MODEL – IS YOUR FIRM READY FOR THIS CHALLENGE!

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

By Judy Shapiro. Published In AdAge November 16, 2017.

Editor comment: The headline question “Is your firm ready for this challenge” is AgencyFinder’s. As Judy points out and as I suspect you know too, your agency is challenged like never before, to integrate the technologies and media alternatives. The question might be – when will you find the time?

In a recent Ad Age post, I heralded a new era for agencies where “quality scale” was new revenue created through the design of trusted user experiences that can be deployed at scale. This level of sophisticated marketing design is beyond the scope of ad tech platforms or management consulting firms with their limited executional, real-world experience; presenting agencies with a potent new growth area.

That vision set the stage so now let’s turn our attention to the practical details which will require, perhaps, challenging almost everything we think we know about how agencies are run today.

Align to clients’ new “trust” value equation
A staggering 60% of top 100 advertisers plan to review their agencies in the next 12 months, clearly reflecting clients’ radically changing expectations of their agencies. More than ever, brands need their agencies to be experts at creating trusted digital experiences while remaining operational and financially transparent. This complex dance of positioning, creative, data and technology is new terrain agencies must conquer.

Yet this requires highly trained people not easily monetizable via typical agency fee structures. The answer lies in disrupting old fee structures in favor of industry certifications of people, not technology, similar to certified engineers from tech companies. We have the foundation for standardized accreditation with strong leadership from IAB, 4As and ANA, among others. An added benefit of standardization is that the industry can be more transparent and comprehensible in tackling complex disciplines like programmatic, predictive modeling, AI and data.

Re-invent agency structure to excel at the art and science of modern marketing
It’s no surprise that the pendulum is swinging in favor of reintegrating tech, media and creative under one roof so that agencies can focus on contextual user experiences within an agile campaign architecture. Unfortunately, this goal cannot be easily achieved by clinging to the traditional agency structure that was built 30 years ago.

It’s time to rebuild the agency model from the ground up with an emphasis on agility, measurability and efficiency. In this vision, there are three competency areas making up a core team:

Progress planners. This is where the strategy and campaign planning responsibilities are. Within this is team are account planners; creative and technical campaign planning; experiential designers — translating experiential design into workable campaigns — and social engagement planners.
Performance planners. This new expertise will plan the performance of all marketing programs with a new set of tools and competencies; media planning (all platforms), campaign proforma modeling, fraud management and customer experiential journey mapping.
Platform planners. This is where agencies connect the dots between platforms, programs and business results. This team owns predictive modeling, audience data, privacy compliance, transparency and platform auditing. This is also where clients get support with their technology challenges such as data integration.

As campaigns become a seamless integration of online and offline experiences, this new structure allows agencies to operationalize this revenue-rich experiential vision.

Pick a tech “trust” side and own it
Traditionally, agencies were neutral arbiters of tech, refraining from owning or even advocating for specific technologies. But neutrality came at high cost, leaving agencies underpowered in understanding ad tech well enough to protect clients. The opportunity for agencies of all sizes to become guardians of clients’ budgets against fraud and inefficiencies by mastering all the science behind ad tech; programmatic, content syndication, social, etc. By taking the side of transparency, agencies have an opening to reclaim their role as trusted advisors.

Agencies lost a lot in the preceding 10 years; talent, tech edge, advertiser trust and huge profits that went from agencies’ pockets into the pockets of VCs and tech ventures. To avoid the next ten years looking like the last ten, agencies must disrupt themselves to become masters of the trusted experiential world.

Judy Shapiro is CEO and founder of engageSimply.

Navigating The Seven-Year Chokepoint (Time to Review New Business Options)

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

Guest Author – Blair Enns, Win Without Pitching

Agency business development has evolved over the years as technologies and media alternatives have evolved.  Most agency “business development” employees have little-to-no formal sales training, so imagine their frustration as they face many things “new” each and every day. To that, now add the seven-year chokepoint as Blair explains … Ed

In running a creative firm, everything appears to change around the seven-year mark. There’s a chokepoint at about that time that requires a change in strategy to get through. Some make it and some don’t.

The seven-year chokepoint was perhaps the first pattern I spotted soon after launching Win Without Pitching in 2002 (as a consulting practice, initially). So many of my new clients had been in business for seven years that at some point in my initial conversations I would venture, “Let me guess, you started the firm seven years ago?” I was correct far greater than chance would have predicted, and that pattern has held for 15 years. Even today, my guess is that more than 25% of the firms in our training program came to us somewhere around their seventh birthday. There seems to be something about being in business for seven years that precipitates the need for help in the new business department. But let’s back up.

In The Beginning
It’s likely that you started your career as an employee, working for someone else and thinking, “If it were my firm, I would do things differently.” Then in a moment that The E-Myth author Michael Gerber refers to as an entrepreneurial spasm, you went out on your own. There’s a good chance your first client was one you took with you from your employer, or perhaps it was your old employer, who used you as an overflow valve or chose to purchase your more specialized offering instead of staffing it in-house.

Level 1: Validation
Things went well and time flew by. One client led to another and another. You added people and capabilities, making it all look easy if a little harried. New clients kept coming in. And then they didn’t. Somewhere around the seven-year mark, your network just seemed to tap out, and everything slowed right down. This spawns an introspective moment for many firm principals. Where am I? How did I get here?

If you were to look back on your seven-year journey, you would see your path leading from your starting point to where you stand now. Along the way, you would see binary switches, like railroad switches, each representing an opportunity that came your way. They’re all switched to “On,” or “Yes,” leading to where you are now.

Those opportunities were random, arising from your reach or network. Some came to you easily and some you had to hustle for, but by saying yes to all of them, you ended up in a random place dictated by those random opportunities. That’s okay because along the way you learned a lot, including the confidence that you can be successful in business. Validation. But right here, usually at about the seven-year mark, the wild randomness that was the hallmark of the first level of your business needs to be replaced. That first type of success is not coming back, nor would you want it to come back. It’s time now for level 2.

Level 2: Life-Changing Success
Beyond the chokepoint at which your business quits growing organically, the journey, if it is to continue, must be more deliberate. From here on out you must set your course to a specific destination. That requires a visioning exercise of not only where you want the business to be at a set point in the future—perhaps another seven years out—but what you want the business to be.

Positioning the firm for this journey is vital. Positioning is the word we in the creative professions use for strategy, and strategy, according to Michael Porter, the Bishop William Lawrence University Professor at Harvard Business School, is the answer to the question, “How are we going to become, and remain, unique?”

Think of the primary components of your positioning as the answers to the questions, “What will we do?” and “For whom will we do it?” While keeping Porter’s definition in mind, the answers to those questions posed today should paint a picture of a global leadership position in seven years. My personal belief is that if you’re not aiming for global leadership then what’s the point? You and your firm can be anything in seven years, so why would you aim for anything other than the very best of something? If you cannot imagine being a global leader in this new area, then you must narrow either the discipline (what you will do) or the market (for whom you will do it) until you can imagine it.

Once you have your vision of global leadership, it’s time to pursue it steadfastly. The traits or tools of the first level of success are hard work and saying yes to everything. But these admirable traits are not the tools that enable the second level of success. Worse, once hardened into habits these traits work against you, because the tools required to get to the next level are saying no, and innovation, which I define as a combination of creativity and risk.

From Yes to No
“The difference between successful people and really successful people is that really successful people say no to almost everything.” -Warren Buffett

Saying yes to everything ensured your survival at level 1. It put money in the bank at a time when any dollar was a good one. But now you must view every new engagement as a strategic decision that will take you one step closer to your strategic vision.

Think back to your journey. Standing in the present, turn your attention away from the starting point 180 degrees to your new destination seven years ahead of you. You will get from here to there one step at a time, with each new client representing one of those steps. So how many steps do you think it takes to get from here to that future version of your specialized global leader firm? The answer is no more than 28.

For reasons I have covered elsewhere, your new business goals should be framed around managing a healthy churn of clients at a rate of about one new one per quarter. Every three months, on average, an old client fades away and, if your new business machine is working, a new, better one comes on board. Whether you like it or not, each client will take you one step closer to, or further from, that strategic vision of a global leader. So you must choose your new clients wisely. Seven years equals 28 quarters, 28 new clients, 28 steps away from where you are now. If you were to say yes to the next 28 clients that came along, where would that get you? The answer is somewhere that looks a lot like here. But few get to stay here, at the seven-year chokepoint, for long. They either figure out the next level, or they go out of business. There are exceptions—lots of them—that stay in this purgatory for years, decades even, but nobody wants to be stuck here, past the point of validation but well short of life-changing success. The first key is discernment: saying no to engagements that do not further your vision.

You must also bring the same level of discernment to your role. What functions does it make sense for you to hold onto, and which ones should you shed? And it doesn’t stop there. This ruthlessness of delegating, cutting loose, or otherwise saying no to things and people that do not advance the firm to its strategic target of global leadership needs to become the new habit, replacing the one where you would say, with a smile on your face, “Yes, we can!” Just because you can, doesn’t mean you should. And increasingly, in level 2, you shouldn’t.

From Hard Work to Innovation
My wife will occasionally observe that someone “is very successful. She must work very hard.” Recalling Peter Drucker’s observation on the source of all profit, I respond like a robot, “No, she must take a lot of risks.”

That is the second shift required for level-2 success—to no longer equate success with your own hard work, but with innovation, which I define as a combination of creativity (the ability to see an opportunity) and risk (the willingness to make large bets). Don’t misread that to think you should never work hard or that working hard is not a desirable attribute. As the principal, working harder may have been the answer to the question in the first seven years of your business, but it rarely is afterward.

The hard work habit becomes ingrained, though. Boxer was the noble ploughhorse in Orwell’s Animal Farm whose solution to every problem was “I will work harder,” even when the escalating crisis increasingly called for creative problem-solving or risk. The problem with hard work is it is consuming, and creativity—the ability to see new opportunities for your firm and clients—requires waste in the form of time to think. That’s why every firm that pursues efficiencies must trade some level of innovation to do so.

Entrepreneurship Is Risk
The propensity for risk is a highly personal thing, varying from person to person, but it is the one characteristic that defines entrepreneurs. They are always making bets. The size or frequency of those bets can puzzle or even terrify non-entrepreneurs. I need a certain amount of risk to make my life on earth meaningful to me, but I notice that the entrepreneurs I admire most tend to take more risk more easily than I do. I wish I could match them, but alas, if I want to sleep at night, I cannot.

We all find the risk-reward tradeoff that’s right for us, but some of us tend to settle into too comfortable a zone, and as a result, quit growing. Your firm needs to grow its way through this chokepoint. It’s delusional to think you will do so without taking more risk.

When creative firm principals at that seven-year chokepoint consider a new positioning to take them to the next level, some of them want guarantees. “How can I be certain this (the new positioning they are considering) is the right one,” they ask? “You can’t,” is the answer. There has to be some risk in the decision. Those seeking certainty before making the shift will likely find that game-changing success will always elude them. Their challenge is to push their own capacity for risk, which brings them closer to failure as well as success.

One Level at a Time
Business is a game with hidden levels. By succeeding at one level, you get invited to play the next. The common mistake is to bring those first-level tools to the next level. Not only do they not work here, but they also work against you. Many of the habits you learned you will now have to unlearn. Accepting this inevitable obsolescence of tools is the key to obtaining all the advanced levels of success.

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PRICING, NOT PRICE, AS A COMPETITIVE ADVANTAGE

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

By Guest Author Tim Williams, Ignition Consulting Group

Tim Williams has consistently looked at the agency world and the agency model as needing change. Today’s media alternatives demand agencies find new ways to explain and sell, and Tim makes some good points about both. When the time comes for a client to search a new agency, our AgencyFinder.com model still prevails.

The way to win more business is not to offer the best price, but rather the best pricing approach.

Many firms will argue their clients are “price shoppers,” and it’s true undiscriminating buyers can be found in every market. But most smart clients understand you get what you pay for. The reason some of them seem prone to “buy on price” is much more about how we sell than how they buy.

Based on the hourly rate system, what most agencies sell is their costs (buckets of hours), so it’s no wonder their clients are focused on costs. But what would happen if agencies decided to sell their services in a different way?

Are you creative or aren’t you?

To stand out in a competitive pitch, inject as much creativity into your compensation proposal as you do in your proposed concepts and recommendations Give your prospect multiple ways to buy your services, not just a take-it-or-leave-it total of your estimated hours.

Car washes demonstrate more creativity in pricing than agencies do. They offer multiple options (silver, gold, platinum), various versions of car wash packages, premium add-ons, monthly or annual memberships, and more. Honestly, is adding up your estimated costs the best you can do?

You can’t really claim to be “a different kind of agency” without taking a different approach to the economic foundation of your success. Ron Gibori, co-founder of agency start-up BGO (Blinding Glimpse of the Obvious), puts it this way “There are no new models, just more talk, without a new approach to the money.” Ron’s partner Mark Beeching elaborates:

“We embrace shared risk and reward with clients in a variety of ways — from pinning significant fees to agreed performance criteria through to joint ventures with clients and shared or even full-risk ownership and funding of new IP by BGO. We’d rather apply our inventive business brains to new win-wins with clients than endless wrangling over budgets and billable hours …”

Changing your pricing changes the dialogue

At a minimum, decide you’re going to join the rest of the business world in selling outputs instead of inputs. (Can you imagine paying for a new laptop based on the number of hours it took to build it?) Then commit to replacing your standardized rate card with a spectrum of pricing approaches designed around customer value instead of agency cost. This can range from fixed price options to licensed programs; from royalties to outcome-based agreements; from dynamic pricing to usage of IP (the way Hollywood makes money).

Not only does a creative approach to pricing help you stand out from the firms creaking under the outmoded hourly rate system, it changes the dialogue you have with your clients when in comes to compensation. Would you rather be talking about something clients want to minimize (costs) or something they want to maximize (value in its many forms)?

From treadmill to virtuous circle

If you need some extra motivation, consider that transforming your pricing strategies is really the only way you’ll be able to create and sustain the “virtuous circle” that is the basis of every extraordinarily successful firm:

The elements of this cycle are interdependent. You can’t expect “effective work” to sustain your success if you don’t also have an effective way to get paid for it. In fact, without a pricing strategy that produces healthy margins, you’ll forever be swimming against the currents. As the late great Stephen Covey preached, “No margin, no mission.

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