Category Archives: New Business

7 Lessons learned from Jim Valvano…

…relevant to the agency business and life

images-2Every year around NCAA Tournament time, I think about my old coach, Jim Valvano. He’s become synonymous with the underdog. As one of my life’s great fortunes, I played for Coach V on his last two Iona teams after transferring from Wake Forest. In our two seasons together, we went 52-11, won two ECAC championships and made it to the NCAA Tournament both years. We beat the Kansas Jayhawks, Pittsburgh, St. John’s, Wichita State, Seton Hall and Mike Krzyzewski’s Army squad thrice.

We also beat the eventual tournament champion, Louisville, 77-60 in Madison Square Garden in February of 1980. They0_0_3586_4675 were nicknamed the “Doctors of Dunk.” We were a bunch of tough New York kids without a nickname. That season, we ranked in the Top 20 of the Final AP Poll.

Playing for V was an emotional roller coaster — such incredible highs and lows. There was no “normal.” Everything he did was a challenge to our manhood and our competitiveness. He and I had an unusual bond —  we were both English majors and literary students. We often discussed the frailty of the human condition and the duty of the writer to make language new.

I learned seven key lessons from Jimmy that apply not just to basketball, but to the agency business and life:

  1. “The only two things that are real in this world are Achievements and Relationships.”  V would finish this thought with, “and we get to have both.” 40 years later, this theory has withstood the test of time. Everything else just fades away, like cheap ink.
  2. “Never accept in victory what you wouldn’t in defeat.”  Boy, does this apply to the pitch process. You might get away with less than your best occasionally; but it will surely come back to haunt you when you need it most.
  3. “Dare to Dream.” As usual, V usually had a subtitle to his headlines. For this one it was, “and then out-dream yourself.” Our dream was to beat the #1 team in the country in the 9 o’clock game at The Garden. What’s your team’s dream? Agency of the Year? What’s your personal dream? Marketer of the Year? A One Show Pencil? Go do it…anything is possible if you plan for it.
  4. “Always know the time and score.” Sounds simple, right? It’s not. Your shelf life as a professional has an expiration date. And your value is measured in wins. Never lose sight of the clock and scoreboard. LinkedIn is littered with expert losers.
  5. “Success requires a system.” All great coaches have a system. The system wins and the system loses. The players are just executors of the system. Great players in a bad system often lose. And good ones in a great system almost always win.
  6. “Basketball is a cumulative game.” Life is a cumulative game; so is your career, your agency or your brand: it’s ALL a cumulative game. It all counts — not just the last 2 minutes. A missed opportunity is a missed opportunity.
  7. “Make enthusiasm a habit.” Our industry attracts cynics…don’t be one. Train your enthusiasm, don’t curb it. Foster it. Develop it. Seek inspiration. Find and channel your inner Coach V; number 15 below did.550684_10150977951418433_828174284_n

2018: The Year of Grow Agency Grow

Welcome to New Business MasterClass

It’s a new year and everyone is back to square one in the ad agency world. New forecastscropped-GrowAgencyGrow_Gradient-1 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 gag-1new 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.

cropped-GrowAgencyGrow_Gradient-1Grow Agency Grow launches next week on LinkedIn, so keep a lookout …it will change your agency’s life.

 

What Agencies Can Learn from Warren Buffett about Pricing their Services

“You can determine the strength of a business over time by the amount of agony they go through in raising prices.”– Warren Buffett

UnknownI’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 36918c8with 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.”

images-1As 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.

 

What’s Wrong with Ad Agency New Business Conferences: 4 Things

Obsolete Boondoggles in the Modern Age of Training

 It’s late in the fourth quarter and the time when  agencies invite me to visit and take a look at their new business efforts from this past year. I run a diagnostic test that examines what works and what doesn’t at small-to-midsize independent agencies. This requires some painful Q&A.

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.

  1. It’s expensive.  When you add airfare, hotels, NYC restaurants to a conference imagesregistration fee you’re making a minimum investment of $5k per key employee. It might be worth it if you know it worked. But…
  2. Disseminating the content is challenging. Assuming someone took great notes, it’s still difficult to capture all the elements necessary from a live setting. The learning resides with one or two agency people. Cascading the information accurately throughout the agency is a common complaint I hear.
  3. The content is dated and similar every year. For those few agencies that do go back a second time, they pretty much get the same old playbook with a new wrinkle Unknownhere or there. Chaucer said “There is nothing new under the sun.” Boy was he right
    about New Business Conferences.
  4. The content is not effective in the modern economy. The “big takeaway” at these conferences is that your agency needs to be a category specialist. It’s a round peg/round hole approach.  It was somewhat relevant in the awful and fear-driven economy of 2008-2011. But, it’s a weak application today in the booming, modern economy. You’re paying a ton of money for content that was born in a world prior to uber, AirBnB, Amazon and Facebook.

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

 

 

10 Regional Agencies That Sell Things

Remember selling? It’s gotten a bad reputation in the creative community

UnknownExcuse 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 663id_146_044_w1600look 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

 

 

 

 

 

 

 

The Conversation: Palma featured on The Perception Channel

Adman grants rare interview to one of the world’s leading tech design firms; sounds off on ad agency biz dev, headhunting & golf

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.

 

 

 

The Ad Agency Outlook for 2013

Happy Days Are Here Again

xctmppjah6YThe S&P is at an all-time high. The Dow is over 14,000 — more than double January 2009. Warren Buffet says “opportunities abound in America.” Believe him, he knows what he’s doing. It took 5 years, but our nation survived George W. Bush and is prospering once again. We leapfrogged the fiscal cliff and we’ll kick aside sequestration (like a Government shutdown would be such a bad thing?).  All this can go bust with the flick of a Bic; but, as they say in the Google search bar: I’m feeling lucky. By the way, Google’s stock price closed at $821 per share today, another record high.

I see a turnaround. I see agencies pitching a lot of business. I see agencies recruiting and hiring good people. I haven’t seen it quite like this since the glorious Clinton administration in the creative advertising industry. Yes, a lot of the growth has transpired in the Digital sector; but we’ve also seen growth in more traditional agencies that have transformed themselves into hybrids. This transformation is driven by talent — not just by simply adding disciplines, but by recruiting and attracting the best talent in the marketplace.

Notice that I say “in the marketplace” and not “on the marketplace”. The bad economy of the past four years caused a lot of bad habits, which are listed below.donnydeutsch1_175 But, I’m happy to report that the era of agencies and clients playing it ultra-safe and conservatively is over. To prosper in the new economy, agencies must once again focus on their inventory: the talent pool. 

5 Habits Agencies Must Break to Exploit the New Economy:

1.  Category-driven Prospecting — As Donny Deutsch said in 2003, “kill the category lists.” The bad economy forced clients to seek “round-peg/round hole” solutions. Fortunately, we can be marketers once again. Our reputation can rest on our creative product and its connection to effectiveness, and not on category expertise.

2. Specialization-based Positioning — In the doom-and-gloom darkness of the past few years, agencies have been forced to move away from their real point of differentiation: Creativity.  And for good reason, creative had become a devalued commodity — like home values during the housing crisis. But, creativity is back and content is once again, king. We can get back to being creative companies, and not “fully integrated whatever.”

3. Online RecruitingIf you want top creative talent, they are not going to respond to an ad on a job board. Your ad will attract unemployed candidates, job-hoppers, underachievers and folks that want to “get into advertising because it’s cool.” You will attract the best available talent ON THE MARKET. You will never get the top 10% of talent IN the market. FACT. The best people are busy creating great work. I’m happy to report that most creative agencies with pride in their product recognize this as well. This is not to say there’s not a place for online job resources, just not for leadership and key positions at your agency.

4. Jobvites/Employee Referrals More short-cut, cheapskate nonsense propagated by a bad economy. Once again, these practices produce what’s available. This tin can is so rife with worms that it ensures a fishing expedition. What if the hire doesn’t work out? What if the internally referred candidate is not quite as good as another? What if that candidate uses you for a counter-offer? What if they are not the right cultural fit?

5. Collaboration Platform — Why do agencies talk about collaboration so much? Is it unusual for a vendor to listen to their clients? Seems that way. Luckily, we can move away from this and back to leadership, stewardship and seeking out clients with like-minded missions and purposes. To drive this point home, let’s quit on Wieden + Kennedy’s Philosophy — leaders attracting leading brands:

OUR PHILOSOPHY

wkLogoA brand must be willing to lead consumer expectations, not follow.

At Wieden+Kennedy, we do communication. Creativity. Ideas. We build big brands and deep relationships.

We help create brands that lead popular culture, not merely reflect it. Because we believe brands that influence culture sell more.