Here is Part Two of my blog post on how to run a profitable advertising agency.
13. Grow your digital assets faster. Bring on more technologists to leapfrog even early-adopter digital agencies. A lot of agencies are now behind simply because they didn’t start hiring more geeks sooner.
14. Pick a growth area. It’s not too late to become the smartest video or mobile agency (no one is yet.) Not even the big boys have mobile figured out. However, it may be too late to be known as the best “social media agency” given the sea of social experts. One more digital point, and I know that you know this — digital agencies have a higher multiple than full-service agencies. If you want to sell in the next three years, you best add valuable digital skill-sets.
15. Provide exceptional client service. All AE’s must know how to think like a client in order to anticipate client needs and address any potential issues before they materialize and metastasize. Consider sending your AE’s to an AE class. The worst call I could ever imagine is a client telling me that our account service sucked. It’s just too easy to fix. Fixing creativity is much harder.
16. Create an agency work process that is dedicated to profitability. Then stick with it. The ever-elastic creative process must be tamed. If you need a work process template ask me and I’ll shoot you one.
17. Manage meetings. Do the math. Lengthy, over-staffed meetings can easily cost thousands of staff-related dollars a month. Find a meeting management system that will work within your culture. Keep attendee numbers small, there is no reason to fill up the room; clearly state the meeting’s objectives; select a meeting leader; don’t hold up the meeting for stragglers (it is disrespectful and we are all busy) and schedule a hard-stop end time. Or better, get up and leave the room when you’ve accomplished your primary objective.
18. Stay very hungry. Business development is a 24/7 priority that needs a solid plan, an active approach and constant senior management attention.
Today, your agency marketing can work 24/7 if planned correctly. There are a wide set of tools to help you stay in front of your prospects. My own business development program that is primarily social marketing driven is delivering business leads from around the world.
19. Think niche. Even if you are a full-service agency, consider leading your new business program with a high-interest niche service or product. We used “invisible QR codes” (that happened to be developed by our client Digimarc) to get our ideas about ‘active packaging’ into senior-level meeting at companies like Nestle. We would have never gotten that first meeting with that Fortune 500 if we simply said that we were yet another full-service shop.
20. Have an agency website that is sales-oriented. You may only have 7 seconds to entice a prospect to dig deeper. Having a me-too agency website that doesn’t sell is a critical missed opportunity. I’ve reviewed hundreds of agency websites (visit my Agency Website Directory at www.pinterest.com/peterlevitan.com) and have very strong opinions about what works and what doesn’t.
Frankly, I couldn’t deliver my POV any better than Mark O’Brien at Print.com.
“Many designers believe that their site’s central function is to show their visitors how creative they are. I disagree. Certainly, a portion of the site should serve this purpose, but this is not the primary purpose of the site. The site’s key role is to generate business, and demonstrating creativity is only part of what converts a visitor into a prospect.”
21. Become known as a relevant and valuable thought-leader. Strategic, targeted, thought-leadership will position your agency as being smarter than the next guy, drives agency awareness, delivers traffic from the right prospects and can be extended to email programs, across social media (from SlideShare to Pinterest), presentations, webcasts and speaking engagements. My agency had a monthly thought-leadership publishing schedule and staff assignments – it worked. But, don’t go social unless you know that your agency can realistically sustain the program. Empty Twitter feeds don’t bread confidence.
22. Even if you love that sexy consumer work, think about working with more B2B clients. I didn’t go this route despite my agency having very compelling B2B client case histories. Why B-to-B? It’s a less crowded playing field; B2B clients have on-going budgets; positive ROI drives incremental spending and these clients will make you more digitally savvy. I am continually surprised at how many agencies leave B2B work to so few.
I am about to repeat myself to hammer a point. Consider revising your current business model if it doesn’t look like the agency of the future – even the agency of 2015. Explore the benefits of employing a leaner and meaner approach.
23. Act with a need for speed. Before my partner and I decided to sell Citrus, I thought about renaming Citrus “Portland” (why not own this creative city?), building a smaller core senior team and moving the other employees to freelance contractors managed by a symbiotic community system. The goal was to create a highly intelligent and lower-cost ecosystem that would be managed on a client-need basis. Too put it another way, we thought through creating a much more nimble, less FTE dependent approach. I shoulda, coulda, woulda… but didn’t.
24. Have smart partners who share your vision and are smarter than you. Strive to not be the smartest guy in the room.
25. Use the services of a strategic agency business consultant that can offer fresh eyes, new perspectives and savvy recommendations based on years of experience. I did and saw the value. Now I am one.
Many agencies think about the time that they might want to sell their agency. I’ve bought and sold three agencies and have consulted with a few that are heading in this direction. Here is a small part of what I learned. Just three quickies.
You need to have something that another agency wants to buy. Sounds obvious, right? Well most agencies (especially the one’s that don’t have a business plan) have not even thought this one through. What’s being bought these days? Cutting edge digital shops, agencies that have focused on a demographic, agencies that can bring in some big fish accounts (they’ll have to prove that these relationships are on-going).
You should be very profitable. You can’t fake this.
You might be more of a merger opportunity. It is possible that one of the agencies down the street might buy you. That’s how I sold my last agency.
One more thought…
What would I do if I started it all over?
I’d use strategic scenario planning to plan a new agency that’s built for the future – say three years out. I’d do research with CMO’s to help find out what they are really looking for in an agency. Oh, and how they actually search for agencies. Guesswork can be expensive. FYI, I am planning a series of posts on how clients find advertising and digital agencies for the Advertising Week blog.
Major point — I am very sure that my new agency wouldn’t look like my old full-service agency.
It would certainly have more digital chops (more access to digital strategists and engineers like I had at my Internet companies) and the agency would run much leaner. If you can’t do a complete agency overhaul (I wouldn’t drag my feet too long), then at least begin to make real market-based modifications to meet the accelerating changes happening in the business of advertising, design and technology.
Frankly, this need for new thinking applies to all agencies. New models will quickly displace even today’s savvy digital agencies. Need a quote to stimulate the need for speed? Here is a great one from Mario Andretti…
“If everything seems under control you are just not going fast enough.”
I know 25 points are a lot to chew on. I can help you get going. I am looking to work with just a few agencies that want to stand out from the pack – and make more money. Let’s talk. Take me up on my website’s Vito Corleone offer.
OK, one more point.
Buy my book on pitching. It is full of advice from me and 30 experts including 16 agency search consultants.
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