To thrive in a world where seemingly everyone is competition, trade the energy you put into matching competitive offerings for a more single-minded business strategy focused on differentiated, inimitable solution sets. A black box will smash a white box every time.
Why are firms like advertising agencies routinely criticized by clients for lacking the tools and practices that would make them more efficient? The answer in large part is that there are no real economic incentives in place to make these things happen. And if there's one thing economists agree on, incentives matter.
When you equip clients and prospects with options, you’re not only providing immensely useful decision-making context, you’re also fundamentally altering the dynamics of the agency compensation game. Offering different options changes the dialogue away from “How many hours will this take to “Which of these options would work best?” Showing different combinations of program elements and deliverables keeps the conversation focused on what clients really buy: outputs, not inputs.
Has your firm ever run into a pricing cliff, cascaded off a pricing waterfall, or put up a pricing fence? Chances are, no. That's because pricing in most professional firms like agencies is an oversimplified afterthought that consists of adding up your costs and calling it a price. But in client organizations, pricing is a core competency -- separate from finance -- that navigates through the minefields of pricing psychology to optimize profit margins for their company.
If you’re like most agencies and other professional firms, you’re likely missing a critical component in the model upon which you have built your business. While there are many definitions of “business model,” we like the three-cornered framework of...
When a talented ad agency transforms the global reputation of a brand through a brilliant marketing program based on unique customer insights, that’s an example of the kind of high-value problem solving professional firms get hired for in the first place. It’s the kind of “magic” that characterizes knowledge work, creative thinking, and professional expertise.