The official blog of Ignition Consulting Group
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-Business Models-
Agency professionals everywhere are frustrated by the master-servant dynamic that increasingly characterizes client-agency relationships. They feel that clients treat them more as a supplier than a partner. Agencies are quick to lay the blame at the feet of the client, but is it possible that the problem really starts with us?
Many if not most account people in agencies were brought up in a model where the “account executive” was expected to handle an incredibly ambitious list of responsibilities ranging from the up-front strategy work to the post-production billing …
If your experience of going to work in the morning feels like the movie Groundhog Day, you and your agency are probably suffering the effects of being caught in a vicious cycle. Vicious cycles are most often caused by employing a “harvesting” strategy to your business, where the agency seeks to wring all the revenues it can from current clients by delivering the normally-expected services instead of investing the time and effort in developing a business model that will help the agency earn revenues in the future …
Faster. Cheaper. Vendor. Three words that characterize one of the leading issues agencies have with their clients right now. Many agencies feel they have been pushed down the client value chain into the same category as printers, having lost their status as professional advisors …
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” …
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When you shop for a car, you’re looking for an “outcome”, not a set of components that comprise an automobile. Imagine visiting your dream car’s website and finding in place of a compelling description of the car and its main benefits, an exhaustive list of features. Or worse, a list of the components that make up the car – the hood, trunk, wheels, doors, motor, suspension, drive train, cooling system, lighting system, gauges, sensors, ignition system, starting system, switches (you get the idea) …
Statistically speaking, the concept of “average” means that you fall right in the middle of the bell curve. No company wants to be thought of as just average, yet that is precisely where their undifferentiated business strategy places them—in the center of the curve. The most interesting and powerful brands are at the edges of the bell curve, because they’re doing things differently …
Advertising Age recently observed, “The list of great brands that have been damaged, even ruined, as they’ve been milked for growth rather than managed for profit is a long one — and it grows every year” …
Most of these financial reports are merely a summary of lagging indicators; they are like looking in the rear view mirror. They give you an understanding only of what has happened, but very little understanding of what is likely to happen in the months and years to come.
