The official blog of Ignition Consulting Group
It’s a popular belief among agency executives that the best opportunity for new business is among current clients. Sometimes that can take the form of new projects and assignments, but sometimes it can just mean doing a better job of capturing the income opportunities you already have …
Two advertising professionals, Ken Starling and Julie Brighton, both worked 2,000 hours last year. Of those 2,000 hours, Ken billed 1,765 to client project work. Julie’s billable hours were 1,326. Which of these two executives was most productive?
Strategy making is about trade-offs. You can’t have both a funky and a business-like culture. You can’t be structured as a local/regional agency and handle global brands. And most importantly, you simply can’t be good at everything …
Based on recent studies, the professional service firm spends over 10% of its time and energy recording, tracking, capturing, estimating, billing, and adjusting it’s time. In other words, feeding the “time machine” …
Companies of all stripes make the mistake of assuming that narrow is the same thing as small; that if you’re focused in one area, you somehow limit your growth potential. While seemingly logical, this is simply not true. Of the top 25 advertising agencies in America, more than half are specialist firms, not “full-service” agencies …
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 …
There are two kinds of agencies: the Defenders and the Builders. The Defenders are the ones that are hunkering down, “taking care of business,” “getting the work done,” and “paying the bills.” They can’t be bothered by changes in business strategy because “now’s just not the time – don’t you know how hard we’re working just to survive?”
To understand what’s happened to the perception of agency value, look no further than the invasive involvement of procurement in the agency selection process. Rest assured that procurement does not hire a company’s management consulting firm. How did this happen to agencies?
Although most organizations don’t like to admit it, the way most business models are hatched is by copying the “success” of another organization. By definition, copying means you’ll never really be innovating, just following. And by the time you finally do successfully copy the features of another company’s business model, they’ll be onto something else …
One of the things that leads brands to look and sound alike is the tendency to define the brand’s value proposition solely in terms of product or service attributes. Believing that the more attributes a brand can claim, the more valuable it will be to the customer, brands continue to add more and more features until they appear to be “all-in-one solutions” …
Most managers invest their time and energy in trying to make their brands better, when in fact they should be working to make their brands different. Better isn’t necessarily always better; different is better. Behind the scenes, American Airlines may be working hard to recruit the best people, deliver the most efficient service, and build the best maintenance record. But most of that means very little to customers unless their experience with American is actually different than with other airlines …
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” …
Despite some recent reports about the small percentage of marketers who currently have a value-based compensation arrangement with their agencies, the move to a value-based approach will very soon become an imperative for agencies rather than an option. Paradigms always take time to shift (germ theory was developed by 1700, yet didn’t take hold until the time of Joseph Lister in 1865) but when they do, entire industries shift with them. In the not-too-distant future, it will be as hard to imagine that agencies sold “time” as it is to imagine the pre-germ-theory world of medicine where surgeons didn’t bother to wash their hands.
Besides being an ineffective way for agencies to capture the tremendous value they create for their clients, the billable time system actually inhibits agencies from internal collaboration, professional development, and innovation. It creates a system where efficiency reigns at the expense of effectiveness. And if marketing isn’t effective, nothing else matters …
The vast majority of agencies are mostly engaged in “costing” instead of pricing. When your production manager walks around asking team members how many hours they expect to spend on a project, that is essentially an exercise in determining your costs. Costs are one thing. Value is quite another …
