Don’t just hack at the branches of new business success - work on the root

February 29, 2012 | Author: Tim Williams

New business success is not about having a better prospect database, sending more mailings, or making more phone calls. It's about having a relevant and differentiated value proposition. A focused positioning strategy. A compelling brand story. A clear understanding of what you're really selling.

“Does new business have to be this difficult?”  It’s a question Ignition increasingly hears from agencies around the country and around the world.  Business development is in fact much harder than it used to be.  And it’s not just the economic recession that’s causing the problem.

And why exactly is it so difficult?  An interesting piece in HBR “The New Psychology of Strategic Leadership” summarizes one of the key issues this way:  Because most business strategists (including agency professionals pursuing new business) have similar mental representations, we perceive and pursue the same opportunities.

In fact, not only do we pursue the same opportunities but we say the same thing, and most of the time, even sell the same product.  So let’s stop and ask, what’s the first and most important thing we preach to clients? Yes: differentiation.

Longtime Advertising Age reporter Matt Creamer observed in a recent piece in Advertising Age:

“Telling an effective agency brand story should be easy for companies that are in the business of telling brand stories, right?  I can tell you, after perusing many an agency website, that fewer than you’d think have figured it out.  Very few take stands. All this has made the agency landscape feel too flat and featureless, and that is exacerbating the commoditization of the business. If agencies don’t stand out, then what do prospective clients have to judge them on but for how much or little they’re willing to charge to handle an account?”

It’s a curious trait of human nature that our natural tendency is to mimic and imitate what others do – even, and especially in, business.  Actually, anthropologists tell us that “copying” is one of our oldest and most basic survival mechanisms. 

10,000 years later, the way that translates to a business setting is that instead of staking out a completely unique position, we tend to look around at what others are doing and conclude that that’s what we should be doing as well. While this might have helped us adopt successful hunting techniques as early humans, this tendency doesn’t serve us well at all in the modern business world. 

Instead of claiming unoccupied peaks, we climb the ones where someone is already there!  The HBR article previously referenced makes this point, observing that “Firms typically cluster around a few strategic positions, leaving others unoccupied.”

Actually, a mountain is a pretty good analogy for what we’re talking about, because it represents the shape of a bell curve.  Do you know what it means to be at the peak of the bell curve?  It means you are the most average.  In agencies, as in other businesses, the really interesting stuff is happening at the edges.

To improve your new business track record, spend more time and energy addressing the cause, not the symptoms.  Lack of new business success for most agencies is a direct result of an unfocused business strategy.

You can't be good at everything, but you can be good at something. And that "something" forms the basis of a successful positioning and business development strategy. 

Beyond positioning: 10 more ways to differentiate your agency brand

February 13, 2012 | Author: Tim Williams

It’s a true and remarkable fact that 60-70% of a company’s market value is intangible; value created by how the brand is perceived by its customers. This phenomenon has been widely studied and plays out in dramatic ways especially in large consumer good companies. A study of brand equity by Prophet quotes former Quaker CEO John Stewart as saying “If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trademarks and I would fare better than you.”

But intangible brand equity counts as the major part of the market value of knowledge firms as well – like advertising agencies.  Agencies actually understand this concept better than most companies because it’s precisely what they preach to their clients.  They understand that differentiated brands are infinitely more valuable than me-too brands, and they do a good job of helping client companies make brands look, sound, and behave differently.  In other words, the best agencies have applied their considerable branding skills to their own brand. 

Agency, differentiate thyself

A previous post, “How Differentiated is Our Firm?” will help you gauge your firm’s current level of differentiation.  Of course the most important dimension of differentiation is to have a clear positioning – a focused business strategy that avoids the “full service” trap.  (No topic has received more coverage by Ignition than why and how to develop a positioning strategy.)  But beyond that essential question, you can achieve additional differentiation in the following 10 ways:

1. How you solve. 

(For example, do you have a distinctive way of approaching client marketing problems, like Victors & Spoils and their crowdsourcing model?)

2. How you produce. 

(For example, do you take an unconventional approach to execution by outsourcing production work to companies like Affinity Express?)

3. How you collaborate. 

(For example, do you work in an agile framework like Brunner and their “momentum teams.”)

4. How you deliver. 

(For example, do you leverage uncommon technology to distribute deliverables or share work with clients like LatinWorks’ client-accessible intranet?)

5. How you serve. 

(For example, have you moved beyond the traditional “account service” role by introducing disciplines like Client Leadership and Program Management like Moxie?)

6. How you price.

(For example, have you adopted creative approaches to pricing and compensation that transcend the hourly rate like Venables Bell & Partners?)

7.  How you manage.

(For example, does your firm provide exceptional benefits to its employees like Peter Mayer?)

8.  How you look.

(For example, do your offices communicate your philosophy like GSD&M and the principles that appear literally in stone in the lobby?)

9. How you sound.

(For example, do you have a rule that a live human should always answer incoming calls like GlynnDevins?  Are clients and associates entertained by music during the day like at Partners+simons?)

10. How you promote.

(For example, do you have an exceptional social media footprint like Teehan+Lax?)

Every single one of these areas presents an opportunity for differentiation.  All you have to do is apply the same creative thinking to your own business as you do to your clients’ business.  We preach differentiation.  Let’s differentiate our own brands.