Archive for the ‘Strategy’ Category

EP12: A client perspective | Katie Pattison | Hammerson plc

December 5th, 2017

In episode 10 we gained some fantastic insight into best pitch practice from Tony Spong at AAR. Tony’s intermediary experience – seeing the process from a client and agency perspective, got us thinking how useful it would be to involve some clients in our future episodes.

 

So, we finish the year with the first of our client perspective episodes. Katie Pattison has been managing marketing budgets at FTSE100 businesses for 25 years, during which time she has hired agencies of all shapes, sizes, and disciplines.

 

In this interview, Katie shares her experience of agency new business approaches, lasting agency relationships, and her top tips or gaining and retaining clients.

 

As always, we’ll be giving away a copy of Katie’s recommended read The Alchemist by Paulo Coelho. Listen in to find out how to win.

 

We’ve loved producing Small Spark Theory this year and have been overwhelmed by your feedback. We’ll be back in the New Year, chatting with more clients and experts and will be unveiling details of a very special Small Spark Theory event. For more details, sign up for our newsletter here or for more information on improving your agency new businesses effectiveness, please get in touch here.

 

Have a wonderful festive break and see you in 2018.

 

EP4: Agency Growth Planning | Felix Velarde

April 3rd, 2017

For agency leaders, managing the day to day business of client and staff needs whilst staying focused on a clear growth trajectory can seem an insurmountable task.

Whether you are looking for a high value exit, attempting to break through the turnover ceilings of one, two five or ten million or simply want to avoid the boom and bust revenue rollercoaster, this podcast episode is for you.

Agency growth expert Felix Velarde has founded, grown and sold agencies many times over and now works as a consultant and mentor focusing on strategy-driven growth and agency scaling. In this episode we discuss the need for differentiation, building superstar teams, and power of planning and process.

This month’s book recommendation is The Four Obsessions of an Extraordinary Executive by Patrick M. Lencioni – as always we’ll be giving away a copy – tune in to find out how to win.

You can read more about Felix here.


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Introducing Small Spark Theory™

January 24th, 2017

For many years now I’ve had the opportunity to observe new business performance in a wide variety of agencies and regardless of size, or discipline of agency, the challenges are remarkably similar. There are familiar patterns of success, ebbs and flows of revenue, euphoric wins and debilitating disappointments.

 

And I’ve become fascinated with those patterns, the formulas for success, the reasons for failure and a little obsessed about how we can become more effective in our marketing and new business endeavours.

 

Increasingly, the solution is not necessarily an ambitious marketing plan, an expensive sales resource or brilliant marketing idea (although that never hurts) but instead a forensic application of process and a marginal gains approach to performance improvement.

 

This brand new podcast series, Small Spark Theory™, explores the small changes we can make to our sales and marketing process to achieve better new business results. In this, the first episode, we set the scene for the using marginal gains and think about how to get some solid foundations for growth in place. Oh, and there’s a little competition too. What more could you want?!

 

With thanks to Matthew Syed for audio extract permission. Matthew’s book, Black Box Thinking is available here.

 

 

Follow us on Twitter @gunpowdertweets and join the conversation at #smallsparktheory

Fortune favours the brave

December 15th, 2016

This small consultancy, Gunpowder, turned 4 last month.

 

I’m not sure quite where the drive to start the business came from. 12 years before I had launched another business, this time in recruitment and with the backing of an agency group and sadly, within two years of our millennium launch, the post-9/11 downturn, and subsequent recruitment freezes hit us so hard we reluctantly took the decision to close. Failing was painful. I made staff redundant, my pride was hurt. I vowed never to do that again.

 

But I did, and 4 years on I’m still here. What I’ve learned during that time; from my own experience and that of my clients – is that nothing good or exciting comes from getting comfortable. As cliched as it sounds, moving outside one’s comfort zone, really is where the magic happens.

 

For many of the agencies I work with, the leaders are owner managers. They are practitioners; creatives, strategists, technologists, more frequently introverts than extroverts. For them, much of the sales and marketing process falls squarely outside their comfort zone.

 

Discomfort at contacting complete strangers with a business proposition, a dislike of networking or fear of public speaking are all common – instead, we retreat to the environments and behaviours which are less challenging, more comfortable. And yet left unchecked, that discomfort becomes a very real barrier to growth – for example, relying on our network alone for new business referrals is easiest, but unless we keep adding to that network, connecting with new people and sharing our knowledge and expertise, the network will in time diminish and the referrals grind to a halt.

 

I’ve talked before about the importance of using a marginal gains approach to fuel new business growth and many of these small improvements mean testing our boundaries, getting comfortable with the uncomfortable.

 

I’m going to be exploring this is more detail next year in Gunpowder’s brand new podcast series; Small Spark Theory ™ which launches in January, but in the meantime, here’s a little taster of top tips and recommendations to fire you up for 2017:

 

  1. Making first contact with a prospect – The Future Factory are experts at generating new opportunities for creative agencies. Even if you don’t need a full lead generation programme but just need help taking the first step – the team run excellent workshops on how to write better prospecting emails. Get in touch with Kimi Gilbert to register your interest.
  2. Networking – It needn’t be daunting. Reframe how you think about it by reading our guide here.
  3. Presenting – If you find yourself fumbling through pitches and presentations then help is at hand. Catherine Allison founder of Master the Art is an expert at helping hone your personal presentation skills.
  4. Asking clients for more – Moving from supplier to trusted partner, means rethinking your client relationships and client planning processes. Get in touch for details of our Account Development Skills workshops.
  5. Team up – There’s safety (and savings) in numbers! Collaborating with a like-minded business or team who have complementary skills to host events or other marketing initiatives can feel a lot less daunting and will make your budget go further.

 

Have a wonderful Christmas and New Year break. Here’s to small acts of bravery in the year ahead.

 

Further reading:

 

Quiet: The Power of Introverts in a World That Can’t Stop Talking by Susan Cain

 

Feel the Fear and Do it Anyway by Susan Jeffers

 

Give & Take by Adam Grant

 

To Sell is Human – Daniel Pink

The revenue growth opportunity your agency could be missing

August 10th, 2015

Here’s a question: What does your agency quality assurance policy look like?

 

In my experience it’s usually something that has been pulled together with the sole intention of ticking a box during a procurement-led roster review or tender process. In most cases, it had been inherited from another agency, topped, tailed and tweaked a bit. Ask anyone in the agency not directly involved with procurement, RFIs or tenders and I doubt they will know of its existence, let alone its content. It might talk loosely about approval processes and meeting clients objectives but rarely offers anything of any substance.

 

The reason for this is completely understandable. The tender process is so excruciating that the quality policy is relegated; along with the professional indemnity insurance certificate, the health and safety policy and other such delights, to the folder marked ‘Must Have’ deep in the dusty RFI archive.

 

But here’s the thing. Your quality assurance policy could, and should, be critical to protecting and growing agency revenues.

 

So let’s go back a step. It’s hard to win clients. I’ve talked about this a lot in previous posts, in fact I talk about this all the time – and you know this already – but few agencies I speak to are putting the necessary safeguards in place to make the most of those hard-won relationships. The much discussed IPA report From Mad Men To Sad Men painted a grim picture of the state of client/agency relations when it was published last month.

 

Much like new business, the development of existing client business is often haphazard and even in the hands of the most proactive client service teams, the client plans, the process and momentum can get abandoned when things get busy. Moreover, rarely is anyone measuring the activity and opportunities generated from coordinated client planning.

 

We know that effective client planning and proactive, business focused (rather than project focused) account direction can build more profitable relationships – however, combined with a quality programme, a process that measures the quality of the client relationship then we can start to see significant bottom line advantage.

Late last year during my DBA workshop (Turning Clients into Advocates) we discussed client satisfaction programmes and the experience and opinion in the room was varied.

 

Of the 10 agencies present:

  • 7 hadn’t tried it
  • 1 had tried it and found it a complete waste of time
  • 1 had tried it and whilst it hadn’t been successful, knew why it hadn’t worked and wanted to try again
  • 1 had a successful programme up and running – it had been transformational for the business

 

My experience is closer to the latter. Gunpowder has worked with an agency for the last two years, up-skilling the client service team and building a framework with which to measure client satisfaction. The results? Existing client revenues were maintained against a predicted reduction in budgets, satisfaction scores went up, and the referrals from happy clients resulted in significant new business wins.

 

So, what are the ingredients for a successful programme? First of all we need to think of it as a quality programme rather than a client satisfaction survey. It is not a one hit wonder. To really see the results it requires time, planning, resource, investment and commitment. Ideally it needs to happen every year and be carried out by a third party. The benefits need to be clearly communicated to clients, to staff and the process must become part of the agency culture. It will probably feel uncomfortable – you are being measured, you are accountable, there’s nowhere to hide.

 

Nevertheless, the benefits of a well-executed quality programme are worth it. You’ll gain respect from your clients. Deeper, more informed relationships. You have the opportunity to discuss and fix problems before they fester. You can monitor the relevance of your service offering. You have benchmarks for performance, for individuals, teams and the agency as a whole. Best of all, the process inevitably generates referrals.

 

You’ll have a quality policy that doesn’t just sit in a tender application folder gathering digital dust, you’ll have a quality mark, a programme you can shout about, build into your new business credentials for all the world to see.

 

What are you waiting for?

 

Gunpowder provides Account Development workshops and bespoke client satisfaction-led quality programmes. For more information, get in touch.

Selling your agency at the highest price

August 3rd, 2015

This month’s guest post is from Felix Velarde, serial agency entrepreneur, Board advisor and consultant to CEOs. In November last year Felix sold his agency Underwired for the final time. In the past 21 years he has founded and sold several agencies – in fact selling Underwired twice! 

 

Here’s his advice for agency owners considering a sale:

 

So I’ve been involved in more agency dealmaking than most, and I thought I would share with you some thoughts about how to get the highest price when you sell. Get the formula right and you’ll have an agency that potential acquirers will fight over.

 

Client balance

Buyers don’t like risk. The biggest risk is to your agency if you lose a major client. So any client that, if it were to leave, would cause a structural change has to be balanced: 40% really is the biggest you’ll get away with without it being a discount factor.

 

Say you have a client that dominates, at 60% of profit. Your multiple (M) will be based on your EBIT for the remainder on the assumption the dominant client is a major risk. So if your EBIT is £1m all in, you might assume you’ll get M6xEBIT – £6m – yay! Actually you’d be offered something more like M3x (for the remaining £400k EBIT) – £1.2m. Disappointing.

 

In fact, it might actually be worth resigning half the dominant client’s business – leaving you with £700k EBIT at M5x, or £3.5m in your pocket.

 

Once you know what you are trying to achieve it gives you specific sales goals and targets to focus the minds of your account handlers and new business team.

 

Fame

Over the years I have been involved in several agencies that have very rapidly become famous. They all had three things in common:

 

  • They weren’t big, but they were known for doing one thing exceptionally well
  • They got on every pitch list for that one thing, and punched above their weight in terms of their client lists as a result
  • They attracted lots of buyer attention (my last agency received nine offers when it was put up for sale)

 

This requires both tested processes and an appreciation that you can’t really be all things to all people. So you have to be courageous in stating what you do and what you stand for, in unambigious terms. This has two effects: you will get the attention of every client that wants what you say you do, and it will attract every buyer who needs to add your skillset to its portfolio.

 

 

Timing

Timing is of course everything. There is no point doing an earn-out deal at the bottom of your value cycle (which looks like a sine wave). By the time you’ve got your money, there is stil fifty percent more growth to be extracted.

 

Likewise, don’t do the deal at the top – there is no more growth to be done, so your earn-out will add little to your starting price. Let’s say the half way mark between now and the next dip is 2017. You need to get cracking and start optimising your business for sale right now.

 

 

Conclusion

Leadership, especially in the run-up to a sale, takes vision, drive and the ability to lean on others’ experience. There are seven major value creation steps you need to consider, and several critical considerations for selecting corporate partners. Might be time to get in touch!

 

 

 

Have you got the X Factor?

November 13th, 2014

As we hit the midway point in another season of warbling wannabes, with Simon Cowell’s shirts unbuttoned to an all time low and the first ‘shock exit’ already in the bag, I’ve been pondering the motivations of our nation of viewers.

 

What makes us pick up the phone and vote for one talent over another? History shows us the best voices often bounce out of the process whereas the comedic, or those with ‘a story’ stick around for a lot longer. Vanilla just doesn’t cut it.

 

And what does this have to do with agencies? Well quite a lot as it happens.

 

The choices we make in business are more emotional than we think. And for clients, where cost, strategy and creativity are equal; it is personalities, relationships and the ‘experience’ that can make the difference between hiring, retaining or referring one agency over another.

 

If, like most of the agencies I meet, the vast majority of your business comes from referrals you are in good shape. Clearly this means there are some clients and other people in your network who are advocates. They get you. They have made a connection with you that sets you apart from the competition. Their experience of working with you has been positive. They trust you to deliver. Moreover, they know that if they recommend you to someone else, you’ll make them look good by association.

 

Yet what’s interesting to me is that many agencies do nothing to actively promote referrals. There are no systems in place, little management of client data, not much in the way of account development planning and rarely any process for measurement of client satisfaction. Interesting because 10% more effort here has the potential to deliver far greater returns than 10% more effort in cold new business hunting.

 

So, if you’ve been pretty good at getting referrals but need more business, think about your X Factor. Find out what it is about the experience of working with you that clients like, the emotional stuff, and do more of it.

 

My DBA workshop: “Turning Clients into Advocates” takes place on November 24th.

 

Bespoke Client Satisfaction Programs and Account Development Skills Workshops are available, see me for more information.

The New Business Equation

July 5th, 2014

Finding the formula for continued new business success can feel like chasing the Holy Grail. A winning streak can so often be followed by a dwindling pipeline, or even worse, an unexpected dip in client revenue. The peaks and troughs seem impossible to avoid, and losing pitches is costly and bad for morale.

 

Meanwhile advances in digital technology have opened up a world of opportunity for agency marketing and new business, yet the ever increasing choice of tools can be overwhelming, time consuming and counterproductive if used inefficiently.

 

How can you market your agency effectively, build a pipeline and maintain momentum? How can you keep on winning?

 

I will be exploring the formula for achieving sustained new business success at a breakfast event exclusively for DBA members on Tuesday 22nd July.  For more details and booking information click here.

Show me the money (part three)

October 22nd, 2013

We all know the importance of credit checking clients, especially in the current economic climate. But at what stage should you do this?

 

Julie Fawcett from Heart Business Consultants gives us her advice:

 

Many companies wait until they have won the business and are about to sign the contract before checking the credit worthiness of the client. But what happens if the check shows them to be un-credit worthy? Would you ask for payment up front? Or turn down the business? What if the client is unwilling to pay up front? Wouldn’t it have been better to know all this at the start, before you had dedicated all that time to the pitch?

 

Wasted time is not the only consequence of this scenario. You may damage your company’s reputation by declining the work as the client will certainly feel like you wasted their time and now they have to either start the pitch process all over again or face an awkward conversation with their second choice about why they would now like to proceed with them.

 

And don’t forget the cost of lost opportunities. What work might you have won had your pitching efforts been focused elsewhere?

 

To prevent this from happening to you, introduce a credit check to your ‘to pitch or not to pitch’ criteria. It takes less than half an hour to do and it could save you a lot of heartache further down the line.

 

Do you know your new business ROI?

June 25th, 2013

I recently had the pleasure of spending a morning with Otto Stevens from Waypoint. As the former CFO of iris Worldwide, Otto knows a thing or two about growing profitable agencies so I was keen to understand his thoughts on new business. I particularly liked what he had to say about ROI so asked him to share his views on here:

 

It seems curious to me that not many agencies have definitive outcomes to measure the return on investment (ROI) in new business. 

 

Now when I say new business I mean new business personnel, marketing and research costs, pitch costs. Many agencies when planning for the new financial year will realise that they have a gross profit gap that needs to be filled. You can get this from existing and new clients.

 

Why shouldn’t you measure new business in the same way as you measure the productivity of agency people? If you measure it, you can manage it.

 

  • How effective is the new business attraction and conversion?

 

  • Did the pitch costs justify the gross profit won?

 

  • Is the new business director doing his/her job?

 

In my experience if your investment in new business is not returning gross profit on a factor of at least 6 times in 12 months then perhaps you should return to the drawing board.

 

Interested to know more? You can contact Otto here or, if you are thinking of going back to the drawing board, see me.