GROW AGENCY GROW: The Launch
The hour is upon us. Grow Agency Grow is officially launched. Our website is live and the betting windows are open for business. Free pizzas to the first 100 members.
It’s a new year and everyone is back to square one in the ad agency world. New forecasts to meet. New business to get. Do you have a plan for growth? Are you committed to growth? How are you preparing for growth in 2018? Or is this year just a wash, rinse and repeat of 2017?
I’m excited to announce a better way for your agency to approach new business in 2018 and beyond. Next week, Ed Klein and I are launching Grow Agency Grow, an ad agency new business training & coaching company.
Grow Agency Grow will provide on-demand new business training content through online video lessons. It is the ad agency equivalent of MasterClass. The videos will be released next week to subscribers. We believe it is a more efficient, effective and modern way to gain winning new business knowledge than attending conferences, seminars, summits and other code names for boondoggle.
Grow Agency Grow launches next week on LinkedIn, so keep a lookout …it will change your agency’s life.
I’ve been hearing a lot from my clients and friends in the agency business about the erosion of their margins for years now. What Mr. Buffett alludes to as it relates to agency services is that if you’re not creating real value for your clients, and figuring out how to charge for that value, you’re never going to grow your margins. Many are wondering how we got into this mess in the first place, and how we’re ever going to get out of it.
My friend and colleague Ed Klein, who’s sat on all three sides of the table as an Advertising Director and VP Marketing at Coca-Cola; Principal at Hauser Group and 22squared; and as a search consultant has some insight to help us continue the migration away from the hours based fee structure.
Ed: “Thanks Mike. There’s an evolution in our industry that’s taking place right now. It can become a revolution if everyone gets on board and starts changing the conversation with the client community. The good news, clients are open to and wanting the change! They didn’t get into Marketing to manage an agency’s profitability. The only reason they ask to see proposals in the form of FTE’s, blended rates, overhead and profit is that we trained them to do it that way. Think about it, what other business opens the kimono so wide that their customers can calculate not only the costs behind your operation, but right down to the salary of many employees.”
Palma: “How do we get out of this?”
Ed: “The big headline is pricing deliverables based on the value created. I love the
Warren Buffett quote because the best agencies in the world right now are more profitable than at any time since the days of massive commissions on media. It’s because they understand that the value they’re creating isn’t related to their time, it’s directly correlated to the value they’re creating for their clients, and no one has trouble paying for that.”
Palma: “How should agencies go about determining the value they’re creating, and how do they price from there?”
Ed: “The best news in the movement to what economists refer to as value based pricing is that from the outset of any engagement, you’ll be discussing your client’s goals and objectives, not your overhead and profit margin. Agency’s need to understand the value they’re creating to set a price. That conversation will lead to a deepening of their understanding of their client’s business, and their client’s belief that goals and objectives will be aligned. From there, agencies will calculate their costs, (not for client consumption), to build Pricing proposals, (not fee proposals), that protect and grow their margins. There is an element of art as well as science in pricing, as we can all understand when we think a little harder about what we pay for clothes, food, and other professional services. The strongest proposals will always come with options, so that all negotiations will be based on the pricing structure you’ve presented, not the slashing of your FTE’s, overhead, blended rate and all the other drivers of your profit margins.”
As Jack Torrance said to the bartender in The Shining, “Words of wisdom, Lloyd…words of wisdom.” By the way, Ed and I will be launching a major initiative next year, disrupting the new business model and revolutionizing the agency search process, so stay tuned to mikepalma.com.
The first question I ask the agency principal is “What did you do to win new business this year?”
The first answer I usually get is, “Well, we went to NY in the Spring for a new business conference.”
Me: “How was it?”
Them: “Well, we won’t be going back.”
I’ve heard this so many times over the past 6 or 7 years that I’ve lost count. Of course, I ask why; and the reasons are invariably the same.
Please make it stop. There has to be a more cost-effective, internally efficient and fresher way to impact your agency’s business development program. There has to a better method led by proven coaches that actually won new business at an ad agency like yours. There will be…and just in time for 2018. Stay tuned to mikepalma.com
“Hey Siri, can man replace himself.” Siri: “Ask Watson.”
“Alexa, what is the meaning of life?” Alexa: “The meaning of life depends on the life in question.”
For most boomers like me, our first exposure to automation was
at a NYC-based restaurant named Horn & Hardart. I remember well how cool it felt to put a coin in a machine, open the window and pull out a slice of real New York cheesecake. Horn & Hardart called their restaurants Automats and they changed the way we ate and drank forever.
Well, a similar revolution is adrift in the business world today and it’s built upon algorithms that improve company productivity, and therefore, profitability. These automated systems are most influential on the workforce: human resources, employees, talent.
If you haven’t begun the process of automating your business, it’s probably already too late. Somebody else in your category already has. You can laugh, but taxi companies also laughed when a technology-based livery company with a goofy name took the cash and hassle out of the personal transportation industry. This isn’t some futuristic bullshit. This is real and this is now.
How does this apply to creative agencies? Let’s begin with our only commodity/inventory: people. With all the hubbub over a commitment to training & learning — how do we know what’s really working? Most agencies throw money at seminars, conferences and “summits” (Really? That’s a pompous name for a money-making boondoggle) and assume they’ve done their part. But the keys to the kingdom rely on:
How do agencies do that? Well, I’m excited to introduce LiiRN, a company revolutionizing today’s workforce. LiiRN is the brainchild of brain child George Swisher, one of the few men I have referred to as a “partner” in my 28 years in the advertising business. George and I have worked with dozens of agencies, helping them grow and get smarter.
This Fall, LiiRN is coming to a General Assembly near you. George will be hosting free Lunch & LiiRNs in NYC, Atlanta and LA in the next few weeks to educate you on how technology and AI are changing the workforce. What you don’t know can kill you. This hour with George will change your life. Here is the Eventbrite. Don’t miss it.
Excuse me, but I thought the purpose of advertising was to sell things. There’s a rumor out there that “people don’t want to be sold.” Don’t believe it. People want to buy. They want to be sold. Just ask any good salesperson.
That’s why people spend so much time online researching stuff: hotels, airfares, automobiles, clothing, food, beer, booze. And that’s just the essentials, I haven’t even mentioned the special interests: sports equipment, musical instruments, cigars, Bibles…people want to buy what they need and what they want. That’s why advertising exists.
In the rush to create content that “doesn’t sell,” we’ve lost our reason for being. When I look at agencies for my reviews, the first question I ask is, “What do they sell?” When I look at creative people to recruit for a job, I ask the same question. And I’ve learned not to entirely trust the case studies and the portfolios.
As children, when asked what we wanted to be when we grew up — we likely answered “astronaut,” “baseball player,” “teacher,” “nurse.” As we grew up, the answers often changed to, “lawyer” or “doctor,” etc.. NOBODY said “I want to be a salesman!” But, almost everyone winds up being one; even if you are a lawyer or a doctor.
You don’t need me to tell you BBDO or Ogilvy sell things. But, if you’re an underdog/challenger brand requiring priority attention and service — please allow me to identify 10 regional agencies that actually sell things. These are the sleepers, the needles in the haystack:
SANTY Scottsdale, AZ Arizona was once the place where ad people went to die. Not so anymore. These guys are change-driven and help you manage change but they never lose sight of the prize — they sell. What they sell: Snacks, Pizza, Ice Cream
BLUE SKY AGENCY Atlanta, GA This 25 year-old shop prides itself on being the go-to agency for growing Southern brands. But, they are all about the sale. What they sell: Hams, Braves tickets, Hotel rooms, Natural Gas
TOMBRAS GROUP Knoxville, TN No longer a “sleeper,” but I could not omit them. True, they connect data and creativity for business results, but if they didn’t sell things very well, that would just be another hollow agency tagline. What they sell: Beer, Baked Beans, Health club memberships, Cake, Insurance (Did I tell you I have the utmost respect for insurance salesmen?)
&DONOVAN Greenville, SC This agency takes hard-core sales to an art form (and a science experiment). They combine sales content with technology to form a method they call Contology. Sounds good, but “Can you sell me this pen?” as the Wolf of Wall Street said. The answer is yes. What they sell: Tacos, Beer, Cars (Did I tell you I also respect car salesmen?)
BRIGHT RED/TBWA Tallahassee, FL Speaking of “sell me this pen,” these folks actually do sell pens. Hey, if you can build a 160-person agency in Tallahassee and sell it to Omnicom, you can sell anything. What they sell: Pens, Hotel rooms, Vacations, Burgers, Socks
FIZZ Atlanta, GA A real wildcard, they do Word-of-Mouth marketing. This is not to be confused with idle chatter. Their conversations sell. One-of-a-kind solution. When your advertising is not working, try this and count the money. Triple-digit ROI. What they sell: Beer, Milk, Energy drinks
quench Harrisburg, PA Nestled (or maybe Hersheyed) in the heart of America’s “snack belt,” these guys move food and beverages by the SKU off the shelf. You want to sell packaged goods? Check out this joint. What they sell: Tunafish, Beer, Iced Tea, Vegetables
SCOUT Atlanta, GA Recently acquired themselves, these guys put the “human” in humanizing your brand. And they get real humans to spend with brevity. No dog whistles here. What they sell: Bread, Carpet, Shrimp, Frozen seafood
ADMIRABLE DEVIL Washington, DC Some startups are more compelling than others. This one really grabbed my attention. What’s in a name? Everything. What does their name mean? That’s for you to figure out; but when you do it could change your life. What they sell: Apparel, Fishing tackle, Accessories
CUSTOM NYC The only NYC agency to make the list. Why? They are different from any other agency I know. Why? They focus on complicated technology platform offerings and simplify the messages so businesses understand the value and benefit. The result? Companies buy. What they sell: Technology platforms
So, sell me this pen…https://www.youtube.com/watch?v=ftFAbPnNYrg
It’s been a long time coming. I’ve always been a little leery of spilling the beans on my personal life. I’ve been even more reluctant to divulge trade secrets. But, I was honored to do this video feature for Jeremy Lasky and Danny Gonzalez of PERCEPTION and The Perception Channel. They are the best in the world at what they do, and at being nice guys.