Constantly changing client demands, new marketing technology and shifting options are all circling overhead, demanding the attention of agency leaders.
These red herrings have shifted the focus outward, away from the important day-to-day operation of the agency. As agency leader’s focus on the external forces, the tendency is to start creating a mental wish list. Most leaders are always looking over the fence, thinking the grass is greener over there. “If only we had award-winning talent. If only we had more money in the budget for xyz. If only we could establish a presence in a more competitive market.” This type of thinking leads to a very reactive way of doing business.
Is the grass really greener on the other side?
These are the murmurings we hear at agencies of all shapes and sizes. The feeling is that the “environment of opportunity” is a feast fit only for other agencies – the bigger ones, the richer ones, the ones with cool space – whatever excuse one can dream up. No one would argue that some agencies have distinct built-in competitive advantages – better city, recognizable name, big account, etc. But how do you explain occasions where the “best-of-the-best” gets decimated in a drought and the weed-filled lawn suddenly turns a lush green? Clearly, there is more to the equation than meets the eye.
Back To Basics.
For every big plan, there is a simple reality to consider: the day-to-day details surrounding the operations of your agency that can make or break your performance in today’s environment of opportunity. And make no mistake, tough economic times create new opportunities. Most agency leaders are focused on maintaining their current position – without first looking at the greater opportunity. What it boils down to is your agency’s ability to manage, develop, and leverage its assets in meeting new challenges and achieving your goals. An agency, even one with deep pockets, that pays no attention to its assets will eventually have nothing to show for themselves but empty pockets.
Ad Agency ASSETs are the Accounts, Specialties, Skills, Experience and Time that define the very who and what of your agency. Click over to our site where you will find the rest of the story, and some interesting ways to not just look each in a new light, but perhaps transform the way you manage each of these key agency assets. In effect, you could be one click away from a whole new way of looking at your firm! Head on over and see if you can make the grass greener on your side of the fence…
ACCOUNTS:
Without them, you wouldn’t be here. They help define the personality of your agency and the kind of talent you look to hire, retain, and grow. Your accounts define the profitability boundaries of your agency and offer you the best opportunity to grow in new directions. Accounts generate the revenue, creating the power to drive change throughout the firm.
Most marketing firms take the “all of the above” approach to new accounts; they’ll take on any work that comes along. Few, if any, set standards or benchmarks in terms of profitability. They neglect to adjust stiff time with regards to profitability and don’t measure client-by-client goals, performance, or impact to the rest of the agency. All of the power is given to the client, and agencies end up following rather than leading.
Recommendations:
- Tightly integrate client/agency operations – increase switching costs
- Dump chronic under-performer clients – free up time for more revenue
- Over-serve high potential accounts – increase switching cost, increase revenue
- Evaluate the strategic fit of each account in the portfolio – be true to your agency vision and strategic goals –don’t be afraid to say “No, that’s not what we’re about”
- Evaluate real service costs – get a truer picture of the profitability of your accounts
- Develop innovative compensation structures – create flexibility to ensure maximum profitability for all types of clients
- Create capacity for the work you want to do
SPECIALTIES:
Developing a brand focus or expertise helps define where you focus your resources, serves as a point of differentiation, and gives you a “personality” to build on. With little effort, you can be an agency that offers a unique product or service. In the market, the traditional agency has become a commodity – bought and sold at the lowest common dominator: price. Creating an area where you’re the expert allows you to move up the marketing ladder to the strategic high ground while charging a premium for your talents.
Most marketing firms want to be all things to all people. They’re afraid to say, “That’s not our strong point, but we can point you in the right direction.” Rather than developing a focus, they stretch their limited resources across the entire spectrum of marketing. They miss opportunities to align with strategic resources that can open new doors. As a result they ignore or miss real opportunities, all because of political reasons or lack of understanding.
Recommendations:
- Create something different in the market place
- Stop giving stuff away
- Identify, develop, and market specialties
- Build awareness throughout the agency, clients and prospects
- Strengthen and focus new business activities
- Charge a premium for proprietary knowledge and service capabilities
- Create a focal point for investing resources
SKILLS:
The skill your team brings to any project defines your firm. They shape the work you do and allow you to get work done. Skills can be continually developed, molded, enhanced and taught. Also, they can be bought – something to remember as you develop your firm’s vision. They must be used to keep the agency current.
Sadly, most marketing firms hire a select skill set, use it, and then allow it to wither and die or just let it go. They never evaluate how a vital skill can be upgraded or improved. In addition, they never really know what unique skills exist within their staff. The very hobbies, life pursuits, and passions of the agency staff can be used to further your goals. Ignoring skill development allows mediocrity to exist at all levels and does not reward your strong performers.
Recommendations:
- Identify required skill sets
- Inventory strengths and weaknesses
- Create a knowledge repository of personnel skills
- Create and enforce mechanisms for evaluation tied to your brand mission and goals
- Evaluate, compensate and reward for skills achievement
- Focus on development of skills
- Develop the employees worth keeping – drop the underperformers
EXPERIENCE:
More than just dusty case studies, experience makes the agency solid: experience gives decision-making intelligence and creates a pool of situations and projects to draw upon. Deep experience both increases the quality of skills brought to the table and allows you to charge a premium for the services you deliver. Building on your experience allows you to learn from mistakes, identify future trends, and enhance your reputation.
Sadly most marketing firms have no strategy to collect and capture useful experience. They aren’t sure how to attract it, and once they get it, they don’t facilitate the transfer of the experience to the agency. It continues to reside in the head of an individual, and this experience will leave with the individual. Agencies need to learn how to collect or retrieve this experience when it’s needed.
Recommendations:
- Capture agency history and experience in the form of stories and legends
- Create mechanisms to store and retrieve
- Assign librarian/archivist responsibilities
- Use agency knowledge, not individuals, as a marketable resource
- Collect and organize new business, research, information, data, in all forms, all types, all sources
- Make it easy to find, easy to retrieve, easy to capture
TIME:
This is one asset that once it’s gone, it can never be recovered. Increasingly business is measured by speed. Business cycles are moving faster, and slowness is a real liability. Moving faster than your competition, faster than your clients, and being inside the decision-making loop establishes momentum, instigates action and defines workload. Most of the time if your marketing firm moves faster you can make better profits. Proper time allocation determines what gets done and what doesn’t. Remember, once time is gone, it’s gone. Using time as an asset is a way of placing emphasis on what’s really important.
And never forget time can be tracked. We all know and hate the ol’ time sheets. But they are a way of tracking your use of time accurately. Many marketing firms waste time on things they shouldn’t and end up missing due dates. There is no separation between value added and non-value added time spent on all agency functions.
Recommendations:
- Create a project and client cost management discipline (keep it simple!)
- Get real tools that allow people to manage time-sensitive resources
- Redesign operations and processes around time-based goals
- Identify and eliminate or simplify time hogs
- Obliterate in-transit time
- Track and manage time for non-time based compensation arrangements
- Manage time for profitability
- Provide fast service
- Stay ahead of the change curve
- Use technology to build speed into the production
- Look for ways to do things differently
When You Put It All Together, It Spells… Ad Agency Assets.
The future belongs to the marketing firms that best utilize all of their ASSETS. Understanding how best to merge and manage each of the above will quickly separate you from the competition, help you align your processes, increase speed, focus your structure and clarify roles and responsibilities. Over time, this will transform your firm into the agency other leaders covet, thinking how did they do that? Lucky bastards! The grass sure is greener over there…
Photo by Lefteris Heretakis and used under creative commons.
