Staying current with procurement purchasing and how to assess a supplier of web design can be short-circuited by reading Lance Wiggs’ excellent quick assessment of the local market.

If you’re not from his locale, still read it.

• The points he makes about Pricing for services in the Buyers Guide section is instructive.  Many agencies are still charging by the hour and it’s clear that over-charging still exists.
• Intermediation or sub-contracting is part of the process and this affects both buyers and sellers.  Transparency and honesty are the best approach here.
• The attributes of a “good client” are excellent.  Being clear about your role as the buyer is important.
• The Agency Sellers Guide has some great points.  Too many agencies rely on word of mouth promotion.
• The attributes of a “good seller” are important.  Know thyself.

And finally, the comments.  I was the first (*) but there will be many more.

Here’s my penny’s worth of commentary

Lance, great, incisive analysis as ever. Thanks for taking the time to do this work on behalf of the whole industry. I’m a newcomer to Auckland and my agency doesn’t do web design but I will comment on the two parts of your piece that are not wrong, but may mis-represent the way part of the industry is changing.

I am writing a series of blog posts called “The Creative Agency of the Future” #FutureAgency in which I’m collating examples from the business operations practices of agencies who are challenging the status quo and looking for improved ways of delivering excellent marketing services to their clients.http://creativeagencysecrets.com/category/creative-business/future-agency/
Here are two ways that leading agencies are different from the ones you researched:

1 – charging. Some agencies are moving away from time/hour charging basis and onto a fee wholly based on results, or partly based on outcomes.
2 – business development. This is my specialism. It makes me cry that marketing agencies can’t market themselves successfully. Many whine about “procurement” or “RFPs” or “pitching and coming second” but the underlying fact is that a planned approach to HOW you win new business tends to deliver MORE new business. If you don’t do it yourself, outsource. It’s the lifeblood of your agency and as you say yourself, relying on word of mouth may not be sufficient for your business survival.

It doesn’t work like that.

There certainly are many agencies who sell themselves as inbound or content marketing specialists.  And there are just as many brands who say they use Inbound Marketing as part of their promotional mix.  Some unscrupulous agencies sell this as the modern web solution and imply that it’s all you need to do to succeed online.

It isn’t.

Inbound marketing Has to be balanced with outbound marketing.

We were listening to Jay Baer on a podcast with Copyblogger and in it he says

“You don’t create demand with inbound marketing, you fulfil demand.”

You are capping your upside

You are reaching out to people who will take the step to find you.

For these people inbound marketing is great, it works.

What about other customers?

But what about all the ones who haven’t yet realised they might need you?  For them you need outbound demand generation activity.

Classically this is ‘campaigns’ – executed in many ways, online and offline.  Ways to bring your brand to the attention of prospective customers in different marketplaces and with a range of communications.

But there’s more to modern marketing than this.  Baer comes back in again with a new catchphrase “YouTility” – this is where you keep your brand front-of-mind in the intervening period between gaining awareness and the point at which the client is ready to purchase.

Blogs and other inbound marketing tools are good at maintaining youtility.  And coincidentally these are also good tools for inbound marketing.

See the connection?

Related articles

• Why and How Businesses Can Profit from Inbound Marketing [Infographic](saleschase.com)
• The CMO Guide To Inbound Marketing #Infographic(serve4impact.com)

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• Inbound Marketing Attracts Millions from Google, Salesforce and Sequoia (seomoz.org)
• The Ins and Outs of Inbound Marketing [INFOGRAPHIC] (contently.com)

My personal view about how to justify marking up services to sell to clients is this.
If you have invested time and money researching the service, learning how to use it and how best to integrate it into marketing campaigns then it is legitimate to charge your clients for selecting and using that service. BUT transparency is key – the client must know your mark up and agree to this before starting the service.

[Read last week's #FutureAgency post about the services you could sell to clients]

Many agencies also sub-contract services to and from freelancers and other smaller agencies. This is a great way of tapping into key skills that you don’t have in-house but which clients need. We have a WordPress specialist, an Adwords specialist, a Database researcher, graphic designers and HTML coders whom we use regularly.

These all pass the 2 question test above and so are appropriate ways to get additional revenues.

Inappropriate revenue streams?

There are other ways of making money. These are “unearned” revenues do not come from your intellect, your expertise, your industry experience or are delivered with no skill related to marketing.

Many agencies make profit from marking up expenses – public relations firms in the UK used to be authorised by their industry body (PRCA) to mark up expenses 23.5%. FREAK. Twenty three point five percent extra revenues for doing precisely nothing. It may look like easy money to the agency but think about it from the client’s point of view. Did they get value from that work?

This soft of rip-off culture has no place in the agency of the future. It’s not transparent, its borderline unethical and adds no value to the client.

In the past, I persuaded colleagues to review one of our agencies by demonstrating to our Finance Director that their expenses charges had increased for 10 out of the past 12 months. How could they justify that greed? Were their campaigns more successful?

Here at Creative Agency Secrets we do mark up sub-contracted services – that’s because it costs us time to oversee, manage and deliver the work. But expenses like straight up I-spend-money-to-go-to-your-office type costs, we charge at cost. Why should I profit from something that adds little to the client’s bottom line? We also choose not to expense telecommunications costs (Skype, mobile phones, conferencing, webinars).

Affiliate Revenues

A legitimate source of additional agency revenues is affiliate or partnership relationships. These can be for services or products that you introduce to your client and for which the service-provider pays you a portion of their revenues. These are different and separate from expenses. The client is purchasing from the service provider, not from you. They can choose to take or reject your recommendation of that service set and so are making a commercial purchase decision. For transparency’s sake, we always tell clients when we are earning money from referrals or affiliate relationships.

If the services you choose are ones that you are using for your own business (refer to Part 1 choose your agency) and so you know their offering intimately, these are the best ones to choose. Keep the list short. A large list will only dilute the effect because many affiliate programs have tiered sales volumes and you can earn more revenues if more business passes through your channel.

Note, I’m not advocating you become solely an affiliate marketer. That is not the agency business model – what creativity is there in just reselling others’ services? The top strategic agencies who outsource production retain the thought leadership, marketing strategy and planning roles and thus add value to their clients.

Underlying principle: transparency; multiple revenue streams through appropriate partnerships and the whole underpinned by retained, preferably 12 month long contracted relationships.

 

Next week we sh0w you How to become the right agency for target brands.

easy.  Today we showcase a client and their challenges and a book and a blog post.  Together they give you the one principle you need to write a B2B online brand strategy.

How to get customer community integrated into your marketing

Three things we read and discussed coincided this week:

1. Planning with the Silver Fern Farms marketing team
2. Reading The B2B Social Media Book
3. Commenting on Confused of Calcutta’s blog post – Musings about communities and prices

Start with the blog post - there are three main points: Everyone in the community is a customer; Communities expect a range of prices for each product or service; A connected community converges to act as a single, composite customer.  

Take the range of prices – some customers are happy to read free offerings; others will contribute to comments or test purchase items while others are avid fans.  The Silver Fern Farms team were discussing how to organise messaging across different geographical marketplaces – not all their range is sold in each country. [They sell lamb and venison in supermarkets.]

Treating all the customers and prospects as a single, composite customer enables us to deliver into separate marketplaces with variable messaging.  Yes, we do not use the same message to each group.  BUT we know the customer is smart and can read.  Being clear about what products are available in which supermarkets matters.  It builds awareness of the wider product range and helps customers appreciate the global nature of the Silver Fern Farms business.

Is B2B any different for online?

Slant these ideas into the business to business B2B world. This is where I find clients have the greatest problems “coping” with a singular community.  And ironically, this is where the greatest opportunities exist for B2B.

Read this quote from the Book

Most B2B companies live with fear. The fear of giving away too much information, saying something wrong, giving competitors an advantage.

But I know B2B companies have another fear. Integrated messaging.

This is perceived as hard to do.  Mainly because of the territoriality of the agencies and staff who service the brand.

Each market, each customer, each group of buyers fits into a hierarchy of customer-types. From the inquirer who wants to read for free but not participate up through to the possible purchaser.  Your brand needs to set up its marketing to allow and

enable each customer type to engage at the participation level the customer chooses.

I wrote that in bold because this principle is the key to your strategic marketing plan.

How does engagement work in practice?

Set up a range of marketing activities that allow any customer from the vast pool of possibles to enable customers to get what they need.

Think of it as a staircase, each step has an increasing level of engagement and possibly a higher price.

When planning your online messaging think of your brand’s online presence as if it were a niche magazine.  You should aim to be the best ‘trade journal’ magazine you possibly can be.  Dominate your niche and the customer will figure out which of your offerings (from free to paid) she wants and where/how to acquire for herself.

Rebecca has created a pinterest board just for B2B Marketing and another for Creative Agency Infographics.  Take a look at the ‘What value is a Facebook fan’ or ‘Lifetime Value explained’ and ‘Why Healthcare is so Expensive’. Gorgeous illustrative skills.

A snippet from the full Copyblogger infographic

Related articles

• 22 Ways to Create Compelling Content When You Don’t Have a Clue [Infographic] (copyblogger.com)
• Content Marketing Infographic Looks At “Heart Of Online Success” (webpronews.com)
• The Content Marketing Explosion {INFOGRAPHIC} (edelman.com.au)
• MyBlogGuest Adds Infographics Gallery (pamil-visions.net)

Listen again using this link (you have to register with BrightTalk)

Read the slide notes below and if you like them; share with colleagues:

Image by glennharper via Flickr

Do relationships matter more than marketing or advertising for B2B?

There is some truth in this but it is often over-stated.

Many web experts talk about the glorious ‘free’ things that come to them  just because of their relationship and web presence – but we believe that without a proven track record in the area of expertise – this is all wishful thinking.

Srini Rao wrote a nicely titled post about how relationship marketing helped him to land a dream client – read it because it sounds awesome.  The plot line goes something like this – you hang out in a surf bar and drink a beer / shoot the breeze  and at the end of the night the owner hires you to promote his surf travel brand.

Wow – the good life just arrived.

How did he make it happen?

I have no doubt that this really happened.  Sometimes serendipity is just there for you and good things happen.

But there were several pre-conditions needed for this beautifully desirable outcome:

1. Track record expertise in marketing brands
2. A clear understanding of the surf marketplace (and involvement as a consumer)
3. The client was ready to buy
4. Give away some free advice over a couple of beers to demonstrate expertise / build the relationship
5. Right place, right time, friendly fellow, made friends and KAPOW – new client.

Except for the last, every other one of these is a deal enabler.

Missing any one of them, it would have been virtually impossible for Srini to close this deal.  Take our expertise in the rowing marketplace.  We now have three clients who sell into the space and proposals out to two more.  The last proposal happened because we were at a regatta and got chatting… in fact, read steps 1 through 5 above – that’s EXACTLY what happened.  Now we’re waiting for the client to decide to hire us.

Why did this new client relationship happen?

Because of the four points listed above.

So take your business development plan and check out the steps in our biz dev methodology

1 – state your business

4 – profile raising

5 – relationship development

Each will help you position yourself appropriately to be in the right place for those relationships to blossom and hopefully you’ll also land your ‘dream’ client!  Well done Srini, we applaud you.

It’s time to stop treating your agency as its most neglected client and promote it to your most important client. It’s time to give the cobbler’s children some new shoes!

How?

Empower your new business director. Give them the clout and resources to get what they need from the agency as if they are the primary contact person for your most important client. Their projects are not put on the back burner when the agency gets busy. Allow them the time, resources and realistic expectations to build a consistent new business pipeline.

Choose your best target audience. Who is your agency’s target audience? That is the first question that needs to be answered. Without it there is no direction for your agency. It’s time to take a rifled approach to your agency’s new business. You can’t stay focused if you don’t have a target identified.

Practice what you preach. Use the tools that you recommend your clients use. Demonstrate their success for your agency. This is especially true when participating in social media. Walk the walk, not just talk the talk. Create a new business program using social media to generate inbound leads for your agency. This doesn’t replace traditional methods for agency new business but refines, enhances and integrates them into a powerful agency new business machine.

Be transparent. The transparency that social media mandates is changing the way agency’s do business, and it is a much needed change. It compels us to lead with benefits instead of capabilities. Everything is now laid out bare on the table, including agency compensation. Perhaps even more performance based agreements. On the client side perhaps replacing our current broken system of pitches and RFPs with something new. Long term relationships should be a mutual goal because it benefits both the client and agency. For that to happen there must be the “win-win” for both and that can’t be done without being transparent.

Be a Leader not a vendor. If you want to stop clients from treating your agency as a vendor you must lead. To be in a position leadership means to have a genuine expertise, a point of differentiation. Your agency can no longer afford to be everything to everybody. So the next question you need to answer, “what is our expertise?” When you answer this question, plant that flag in the ground, this is what we do best, it will command respect, higher premiums and give clients outside your market a reason to do business with your agency. A small agency was recently included in a pitch for a national account because they were willing to say this is who we are, this is how we are different than other agencies, this is our expertise.

This article was originally published here.

Image via Wikipedia

Devising appropriate ways to measure your social media campaign for new business development is key to proving that your work is delivering results.

Today we suggest some ways to measure the success of your work

1. The number of Followers on Twitter
2. The number of Fans on Facebook Fan Pages, Events
3. The number of tweets & RTs on Twitter
4. The number of Shares & Likes on Facebook
5. The ratio between Followers-Friends
6. The authority of the people that follow you
7. The authority of the people that share your content
8. The average quality of your previously shared messages
9. The number of unique mentions/shares (similar to Link Diversity)
10. The rate and the source of links that you share

Moreover search engines are expected to use Social Media buzz to determine:

How fresh a particular post is

If an page is still useful/valid/up-to-date

What are the current trends

Which terms are related to the particular post. They are likely to use the keywords and the hash tags that can be found in the content of the shared messages.

The theme or the topic of expertise of each author.  Users that tend to post high quality messages about a particular topic are likely to be considered as experts.  Bing already uses this feature by recommending users on Twitter.

I was reminded of this by a recent follow request from StrewIt.  I have no idea what the service is but if you “visit them and start Strewing!!!” apparently all will become clear.  Not.

Twitter biography

So much for them.

Well to take our own medicine, we created the Creative Agency Secrets Linked In company page.

Other places where  your personal and company information could be kept up to date:

• Facebook page
• Skype
• Delicious [topical right now]
• Website about page
• Industry specialist directories
• Techcrunch directory
• Industry magazine website listings

Why not add in a new calendar item for yourself every few months – to update your online profiles?  Set a reminder as a task or a diary date so you don’t forget.  Include in the task the list of sites to check and add in any new ones that have become important in the intervening period.