This is a guest blog post by Richard Houghton, Associate Partner, AgencyPeople, former President of ICCO and past Chairman of the PRCA (UK). His work at AgencyPeople is focused on helping agencies grow.
My conversations with the CEOs and MDs of agencies normally start along the lines of – “Do you want to grow your agency?”
The answer is invariably yes.
The next question is often “What is getting in the way of growing your business?”
The answer to this question is always personal to the agency MD but there are common themes, including pressure on budgets, pitches with very long ‘short lists’, recruitment of quality people and managing overheads.
Nobody thinks that these are simple problems to solve or that running a growing and profitable agency in the current economic climate is easy. But looking at your agency from a different angle can provide a new perspective which often helps management start to overcome these challenges.
One of the tools that we use at AgencyPeople is to ask agency management to identify the drivers that they think are the most important to creating revenue and margin growth. It’s these drivers that make up the ‘Engine for Growth’ for an agency.
You may not be surprised if I tell you that these drivers often include great people, real and clear competitive differentiation, a great new business pipeline and efficient financial systems.
Do they sound familiar? Of course they do. Many of the growth drivers overlap with the barriers to growth that have already been identified.
I think it is a matter of mindset as well as planning. Starting from a positive mindset means that you start planning for growth with a ‘can do’ attitude rather than a list of problems to solve.
Engine for growth
Once you have the right mindset, what drivers should you consider for your Engine for Growth?
Having a High Performing Senior Team (HPST) is an excellent starting point. The team needs to be balanced in terms of personalities and skills and be working towards a clear vision, with a motivating mission. They need to be running an operational plan that provides a road map to growth, with identified milestones.
Working to the HPST needs to be the Right People in the Right Jobs. Understanding an individual’s strengths and playing to them makes for happier staff and clients, with much reduced employee churn and associated costs. Linking the individual’s success to the business’s means that individual reward for success is funded by a profitable and growing business.
Thirdly, all the evidence supports the view that winning new clients is far more expensive than growing existing clients. We estimate about five times more expensive. On top of that, Loyal Clients will spend more, can help with service development and will even provide new client leads through referrals.//// Making sure your client relationships are partnerships rather than transactional is one of the key drivers to sustained commercial success.
The next driver, Standing Out, is probably the one driver that PR consultancies handle the least effectively. This is ironic as our core expertise is differentiating companies, services and products. Understanding the market trends, responding to them and even second guessing them at times, gives agencies a chance to start grabbing the attention of prospects through new and relevant propositions and services.
Combine this innovation with a professional and relentless Sales Process and you have the underpinnings of solid fee growth. The final driver is robust Commercial Systems that ensure that the senior management team have actionable information and no surprises.
In summary, look for drivers rather than challenges and make sure your Engine for Growth is running smoothly.