If you’re a professional service firm dealing with procurement, the only way to win the game is to change the game. Odds are you’re selling the wrong thing in the first place, in the wrong way…
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What is the strongest predictor of success in business? According to one of the most comprehensive studies of business management ever conducted, the answer is a clearly stated, focused business strategy…
Why aren’t professional services firms more proactive on behalf of their clients? Because it’s not billable….
As marketers continue to trim budgets and cut costs, agencies are struggling to grow their revenues and improve their margins. The reaction of most firms is to attempt to do a better job of estimating, recording and billing for the agency's time. That is not the answer.
When creating an investment portfolio for retirement, no reasonable person would put all their money just in gold, just government bonds, or just stocks (especially in today’s economic climate). In a professional services firm, your client compensation agreements are your most important financial asset. If they are all based on the same remuneration system — just fees based on hours, for example — it means you’re not diversifying your portfolio, and by definition not maximizing your firm's profitability.
Are you selling what's scarce? One of the most basic principles of economics is that products and services which are difficult to find, in limited supply, and available from only a few providers, are able to command a premium price. For professional services firms, there's a valuable lesson in the law of supply and demand.
As professional service firms like advertising agencies begin to experiment more with the concept of outcome-based compensation agreements, it’s essential to understand how to measure what matters.
Most companies make money while they sleep because they sell products or services with recurring revenue streams. But most professional service firms -- like advertising agencies -- only make money when they’re logging hours to a time sheet.
“The days when agencies expect multiple $100 million-plus agency-of-record accounts to go up for grabs each year are now barely visible in the rear-view mirror.” So begins a recent article in Advertising Age that attempts to dissect what’s happening to the business model of the advertising agency business.