Monday, April 26, 2010

Creating a Point of Difference to Grow Your Business

The two biggest complaints I have heard most often over the years from clients are that "all agencies are pretty much the same" and "agencies don't understand what we really need". They don't see much differentiation because (a) there isn't much, and (b) our points of difference aren't relevant to client needs. The March, 2010 issue of Fast Company profiles two agencies that have taken very different avenues to build relevant differences in their agencies that are paying off with big-time success.

Grey New York won 17 of 19 new business pitches in 2009, and operating profits were up 44%. Those are astounding numbers at a time when ad spending was down 11%, and industry insiders and media observers were chanting a collective "woe is me" mantra for our industry.

So how did they do it? Well, certainly their creative output was no slouch, with highly touted campaigns for E-Trade, BMW, DirecTV, Ketel One vodka and the NFL, among others. But two moves strike me as much more significant from a positioning point of view in new business.

First, the new chief creative officer, Tor Myhren, moved his entire creative team from elaborate, posh offices into a plain brown cubicles, signaling a dramatic change in how Grey would approach business both internally and externally. Second, Grey expanded their in-house production department, allowing it to produce TV and Web spots quickly and cheaply, rather than outsourcing.

These two changes in business philosophy aren't earth-shattering from an innovation standpoint (almost any agency could make similar changes tomorrow), but they are significant from a client's perspective. They demonstrate to clients that Grey understands their need for less fluff and more meat. Not to mention that clients want things faster and cheaper than ever, and if their current agency isn't listening to that cry for help, someone else will.

Partners & Napier, a mid-size shop headquartered in Rochester, NY, with offices in Atlanta and San Francisco has seen billings grow by 300% in the past five years. Several factors have contributed to this impressive growth pattern, but their most innovative move was to adapt their business model to their client's needs for cost control and demonstrated ROI rather than fighting it.

While the rest of the industry was bemoaning the rising influence of procurement departments at clients, and predicting the death of creativity in a business driven by costs, Partners & Napier responded to a client request by applying for and earning ISO 9000 certification. Through an intensive six-month study and documentation of all steps in the creative development process, they have adopted a Six Sigma-type approach to reduce inefficiencies in the creative development process.

The result has been a reduction in wasted time in all steps of the creative development process. A job that might have taken eight weeks can now be completed in three weeks, while saving the client approximately 40% and increasing productivity for the agency.

Chief creative officer Jeff Gabel says he likes the new system because it has given his team more time to create big ideas by reducing the important but "ancillary grunt work" leading to ideation. And CEO Sharon Napier likes it because they now have an innovative point of difference that is being used in win more new business.

Two approaches - one relatively simple to execute, the other more difficult but still doable with the right commitment and funding. Importantly, both demonstrate an understanding and willingness to respond to changing client demands.

And from a new business perspective, two new ways to create a point of difference for your agency that is relevant to current and potential clients! After all, we are in a service business, aren't we?

Monday, April 19, 2010

Three Ways to Build Trust and Service in Business Development

Last week, I worked on a branding project for a very successful retail furniture store in Atlanta, and I was struck by how important trust and a real commitment to service have become in today's world. To kick off the project, I conducted one-on-one Discovery Interviews with management, retail floor staff, a few customers and even one of their suppliers. Later during competitive store checks, I saw firsthand how the wrong approach to service can backfire and negate what might have been a sales opportunity. These two facts were driven home time and again - trust is in short short supply these days and a true commitment to helping your customers/clients can be the "secret sauce" for success.

In today's business environment, almost every conversation seems to begin with skepticism. "What's your agenda and why are you really being nice to me?" seem to be the first reaction to any interaction between staff and customers.

My interviews with the staff confirmed that a large part of their success is built on how they approach and treat the customers. Unlike many furniture stores, they don't wait at the front door to pounce on you. They do ask if they can help, but if you want to browse you are welcome to do so alone. Almost all shoppers immediately reply "no, thanks", and when asked why, most admitted that they didn't want to be "sold on something I don't want or need". Think about the hard-sell approach you may have experienced in visits to retail stores (and car dealerships) where the commission-driven salesperson hovers nearby, even when you ask them not to do so.

I wasn't surprised at this fact, but was blown away by how successful this small furniture store has been by using these three simple principles when dealing with customers:
1. Ask and listen.
2. Take time with the customers, even if they aren't buying today.
3. Be a resource.

Listening has become a lost art.
Too often, our listening is really an opportunity to think about and plan our next response, even before you have heard everything. Too many companies (especially ad agencies) are on "Send" and not "Receive".

Even when you are trying to listen, you must be careful how you respond. Years ago as a junior account manager, I would try to anticipate potential questions or objections before making a recommendation to my client. I would discuss those questions and potential answers with the art director/copywriter/account planner, or whomever I was working with at the time. When my client raised a question, I was there with a ready response.

One day, my client erupted and said "Dammit Don, why do you always have a quick answer to every question I ask?" My dumbfounded and innocent response was that "I thought you might ask that, so I discussed it with the art director/writer/planner/etc. and this is why we are recommending this particular action". I learned a valuable lesson that day. You must not only listen, you must make sure they understand that you are listening.

Spending time with a customer/client sends a positive message.
In the case of my furniture store client, they not only listened, they encouraged the customer to understand all of the pros and cons of each brand and item they were shopping for by spending time with them to field questions and offer suggestions. Even when they didn't purchase, or intend to purchase that day. As the owner explained to me, "the average customer makes 2-3 visits before they purchase. If we treat them this way, and they visit a competitor who doesn't, we've won a customer and potentially everyone they come in contact with from now on".

I saw how smart that approach was firsthand, when I visited his two biggest competitors and was basically ignored (even though no other customers were in either store at the time and I had acknowledged that I didn't know a lot about the brands or their benefits). In one of those stores, I asked some specific questions about two brands and asked for some information to take home to my wife. Her response was a pre-collated handout of materials for brands and products I had not asked about.

Be a resource, and not just a commodity they buy.
One staff member said to me in our interview "I feel great when a customer says "thank you" and I know they really mean it because I helped them make a smart decision". There is no question that it takes more time to listen to your customers and spend the time needed to understand their needs so that you can help them understand how your product or service can meet those needs. But if you build a relationship that they trust, they will reward you with their business. And by telling their friends.

Maybe to many of you, this is nothing more than a BGO (blinding glimpse of the obvious). To me, it was a strong reminder of how important trust and service have become in a world where both are in short supply.


Wednesday, April 7, 2010

Digital Technology Requires Changing Your Mindset and Model For Business Development

As the Web continues to impact the consumer decision journey and create a permanently altered landscape of empowered consumers and 24/7 brand interaction, some agencies have accepted this new reality and adjusted their approach to new business development. Others haven’t, and apparently need to be dragged, kicking and screaming, into today’s world.

I continue to be amazed at the number of agencies who treat digital communication tools, especially social media, as a secondary, or even tertiary, consideration for their clients and prospects. Even though their clients have moved beyond them and are increasingly seeking ways to engage their customers at every step of their interaction in the brand decision process.

Agencies have traditionally focused their efforts on push-driven brand marketing to woo consumers when they first consider products and on promotional efforts at the point-of-sale to influence them as they are about to make a purchase. That approach assumes that customers move through a traditional decision process (commonly viewed as a funnel) that starts with evaluating alternatives through input from past experiences, brand messages and word-of-mouth recommendations from friends and family, then narrowing their choices and making a purchase decision.

Digital technology is changing all that. Consumers now read online reviews, compare features and prices on multiple web sites, and discuss options with total strangers on social networking sites. This information flow creates a new decision process where the evaluation of purchase options can grow exponentially as new input is accessed. Recent studies have indicated that while consumers enjoy this new empowerment for the most part, many are simply overwhelmed and want marketers to help them make smart decisions. They just don’t want to feel subjected to a hard sell. They demand a two-way relationship that is divorced from a one-way, company-driven sales mentality.

Agencies must development a new mindset about what their clients need and build a new model to meet that need.

This doesn’t mean that agencies should abandon traditional media. Despite the numerous predictions of the death of television, it is still the most pervasive and powerful communication tool a marketer can use. What it does mean is that agencies must begin to treat digital media tools, and especially social media, as something equal in importance to traditional media.

Too many agencies have stood by and watched their role and value decline with their clients as specialty digital suppliers have grabbed this turf and diminished their importance in the marketing hierarchy. It’s time for agencies re-evaluate their organizational structure and compensation models. It’s time for agencies to invest in social media through blogs and other digital tools. It’s time for agencies to re-define their role with clients and prospects as more than a creative and production vendor.

Clients need ideas that will transform their business like never before, and now is the time for agencies to step in as a partner in setting business strategy, designing products and services to meet changing customer needs and wants, and creating new revenue models for their client and for themselves. Clients need help in keeping up with the increasing availability of new digital tools and how to use them to their advantage.

Clients need more than new ads and a new web site; they need to know the best ways to build a bridge between their brand and their customers. But that need is not just how to effectively use email, blogs, Twitter, mobile marketing, viral marketing, pay etc., but how to mix them with traditional media to create the most impact and build brand advocates.

It’s time for agencies to develop a mindset and model that truly meets these new client needs. If we don’t, the agency business is doomed to becoming a second-class citizen in the marketing community. And that would be a shame for an industry that grew up with heroes like Leo Burnett, David Ogilvy and Bill Bernbach.