Divide Your Marketing/Sales Pie Differently

I talk to a lot of agency owners and I ask them the same question: how do you plan to grow your firm? The answers I almost always get are these:

• “Do a better job of marketing”

• “Hire a marketing director”

• “Win more new business presentations”

• “Get more referrals”

• “Make the agency an account”

Now these answers aren’t totally wrong – they are just not the right one.

What agency owners and CEOs should be saying is. “We have to do a better job of sales.”

After all isn’t business development all about selling and winning?

So why don’t I get the right answer? I think it is because many people are confused about the difference between sales and marketing. So here are my definitions:

Marketing: The process of making a “universe” of potential business prospects know more about your firm and how you think

Sales: The process of persuading a potential customer to buy your services

Now where would you put the emphasis?

From now on divide your sales and marketing “time pie” differently – 75% of your time on sales and 25% of your time on marketing.

Making the time commitment is only the very first step of the sales challenge. I’ll be addressing other challenges and offering potential solutions in future postings.

Agency Owners: Avoid This Mistake!

New business is the lifeblood of any public relations or marketing communications firm. Finding prospects and converting them into new clients is normally the #1 need for most firms. Today’s economic uncertainties make this an even more pressing need.

However, ask most owners how they plan grow and win new clients and they answer, “By doing a better job of marketing.”

What they should say is “By doing a better job of selling.”

As both a former agency leader and current adviser to PR and marketing firms, I believe that most agency leaders confuse sales and marketing and as a result lack a real sales strategy to win business. And, a sales strategy is not just a list of potential new business opportunities,a training program to make your people better presenters, or more impacful PowerPoints.

Here‘s what I mean. For many (perhaps most) agency owners, one of their biggest gripes is the lack of an effective marketing program to make that proverbial phone ring off the hook, generate more referrals and ideally stimulate prospects to simply award them the business.

Do the words “positioning”; “messaging”; new website; “USP”; recognition; reputation; etc. ring a bell? These are the words agency owners often use when either trying to fix their marketing effort or launch a new one.

The reasoning is simple: the better known (and known for the right reasons) the more likely we are to attract potential clients. Once they get to us we can “sell” them. And, they are not wrong – just a little misguided that this is the primary solution to their growth issues.

I believe that the real solution to growth lies with the right kind of sales strategy supported by a complimentary marketing program – not the other way around. If you know to whom you are selling, what they have bought in the past or could be buying now, and what you can offer them that competition cannot, then you have the basis for a strategic sales development program.

Do you have a sales strategy or just simply a marketing strategy? Or, perhaps neither.

Where's Your Marketing?

I just read an article in Advertising Age, “How Social Media Is Helping Public-Relations Sector Not Just Survive, but Thrive”.

It is an interesting piece about how public relations firms are capitalizing on their inherent strategic thinking and social media expertise to develop innovative, result-oriented programs for clients and helping the industry rebound quickly from the recession.

I have only one issue with the story. Look who’s cited and quoted: Edelman, Omnicom (parent of Ketchum, Fleishman and Porter Novelli), Interpublic (which owns Weber Shandwick, Golin Harris and MWW), and Hill & Knowlton.

We all know that excellence in social media/marketing programs are not the province of the big global firms – so why are there no small or mid-size firms mentioned. The easy answer may be that none of you are advertisers in Advertising Age.

Yet, I wonder, how many of you out there have even thought about trying to interest Ad Age in even doing a story? If, like many firms, you want bigger clients, bigger brands and bigger budgets, what are you doing from a marketing standpoint to make those prospective clients aware that you exist?

Shouldn’t traditional public relations (read print publicity) still have a place in your marketing mix?

Threat or Opportunity? The Southwest Emerging Media Model

I read a post in ragan.com about the success of Southwest Airlines’ social media efforts. It sparked a question: is this a threat to the growing revenue potential that agencies see in social media?

SW started a blog in 2006 called “Its Nuts About Southwest” to bring customers and the airline closer together. The success of the blog broadened the company’s social media efforts and they named a Manager of Emerging Media, Paula Berg, to oversee their efforts.

But here are the paragraphs that sparked my question:

“As the blog evolved, so did the roles of Berg and her colleagues. When Berg started working on the site she was part of the company’s public relations team. Her co-manager, Brian Lusk, was a corporate editor in the company’s executive office. Soon after the airline began experimenting with Twitter and other social media tools, it moved Berg and three of her colleagues into a new Emerging Media department.

There Berg’s six-person team (two new employees joined it last November) maintains a Twitter feed, Facebook fan site, Flickr group and YouTube channel. Each tool is overseen by a single team member and geared to reach a slightly different audience. “

I wonder, is the emerging (read social) media department separate from the public relations department? It sounds that way. Could this be a trend in other corporations where conversations and connections with the consumer or end user are critical to sales and reputation? And, if so, will it require PR agencies to build new relationships not only with public relations, marketing, top management and finance, but also with social media departments who might logically hire (if they need to) social media agencies and let the PR department deal with the PR agency?

Or, does this signal another reason why it is so important for the traditional PR firm to reinvent itself, and why positioning and marketing an agency will be even more critical in the future?

If Your Agency is Three Years Old or Less ...

I find that many new agencies start and exist in their “formative years” (say 2-3 years old) by operating by the “seat of their pants.” Often I’m told, “We don’t know what we don’t know.”

Typically that’s because the owners grew up (as we all did) as account people with little or no experience running a business.

Many of these firms are doing well or at least holding their own – even in the recession. However, this is a critical time for newer firms.

As we begin to pull out of the recession, more established agencies will reap the benefits of longevity, reputation, vision, and an awareness of who they are and what they do well.

Newer firms normally don’t have the luxury of brand reputation or brand recognition and often they have no clear direction or vision of the kind of firm they want to become nor of the niches in which they need to specialize. Specialization helps builds reputation, and determining where and how to specialize is one of the most difficult decisions facing a young firm.

So what do new firms need to do to remain or become competitive? Here are four tips:

1. Create a vision of the firm you want to become (to look like) over the next three years. This vision will then lead to the strategies to help you get there. But, be sure to also identify the barriers to success and how you will overcome those barriers.

2. Be brutally honest with yourselves about what you do well and for whom. Decide what your agency will focus on. It could be a functional skill (e.g., crisis communications) or it could be an industry niche (e.g., luxury goods). It’s OK to have 2-4 specialties, but not seven or eight.

3. Identify your ideal client. Where have you been really successful? Profile that ideal client (what factors made it successful?) and resist the temptation (read money) to take business that doesn’t meet your ideal client profile.

4. Build a marketing program around your wisdom and knowledge. What do you stand for? Where is your thought leadership? If you don’t know, then think long and hard. Gaining recognition in the long haul comes from your clients and the work you do. But, for newer firms, getting those great clients will come from building a reputation based on what you stand for. That’s thought leadership.

There will great opportunities for communications firms in the near future. If you are new, if you have been successful, congratulations. Now the real work starts.

Is Cutting Prices Smart Marketing?

Obviously the competitors for stressed out coffee drinkers think so. In the face of McDonald’s spending $100 million on a new marketing campaign touting the quality of its coffee at a more affordable price than its competitors, Starbucks announced it is cutting prices on some of its drinks and Dunkin' Donuts followed suit.

In an MSN.com article, Jean-Pierre Dube, professor of marketing at the University of Chicago Booth School of Business, said it is “extremely important” for McDonald’s to advertise lower prices during the recession because they are less expensive than others.

This brings up a question for me. Is it smart marketing for agencies to lower their prices and promote that to prospects?

Everyone knows it’s more competitive out there. Large firms are going after prospects they wouldn’t touch if times were good. Yet, large firms have a cost structure that makes it more difficult for them to change or lower billing rates and client fees. Smaller firms don’t necessarily have that problem. They can be more flexible and more nimble. And, they can emphasize lower fees in new business presentations. Despite what we would like to believe, many (good) clients initially buy on price and that’s even more true today.

Some will argue that lowering fees or reducing billing rates, or “giving work away” cheapens the value of that agencies bring to clients. They say once you lower costs you can’t raise them. I don’t buy into that philosophy.

If you can establish a price advantage over a competitor (and still make money) why not use this to win the business, develop a relationship and look to increase the scope of work (and fees) over time. Since many agencies increase their billing rates annually anyway, why can’t you lower them and then increase them in years to come?

I think you can. And it may help you win the business!