I call myself an author, speaker, and advisor. What would you call yourself if you could only use three words, and needed to list them in a specific order?
The order I use is intentional because it’s an aspirational statement about how I want to impact my world. One-half of my income still comes from advising (it’s a term that’s not as loaded as consulting), but it’s not as sustainable as the other two.
What three words would you use for yourself? Some of you would use the same three words that I have. Most of you run sizeable firms, and for you folks I’d like to take a stab at answering that question. Even if I’m not correct, maybe I can get you thinking about this.
Here are the three words you should probably use to describe yourself, and in this order:
The entrepreneurs running creative firms are different than their older counterparts. Here's a recent podcast episode where Blair Enns interviews me about that subject. If you enjoy this episode, I hope you'll subscribe. We'd also value your positive rating on iTunes.
The only preparation we do before each recording is a quick email that says: "Hey, Blair, interview me about this tomorrow. Here are three or four talking points." And then we launch into what at times could be considered an awkward transparency about what we are thinking (we take turns interviewing each other, with a different topic each episode). There are no retakes and no editing of the content. It's been new, fresh, and fun for us. You can find out more here. Click below to listen to this episode immediately.
Here's another of my favorites. In this one....
Time to talk about clients. Not specific ones, though, but rather what an ideal client base looks like for a smallish, privately-held firm in the marketing field. I doubt that this would apply outside this field, so use with caution if you are a different type of firm.
Start by listing all your clients in a spreadsheet, from largest to smallest in descending order, like the illustration above. One very important note: if you have the data, list just the fee income from these clients. That’s what’s left after pulling out all the external cost of goods sold like media, printing, and contractors. Don’t pull out internal salaries as those are never properly categorized that way.
I’ve numbered the graphic to direct your eyes to what you might look for.
First, note the relative size of your largest client. If you are working for multiple departments or divisions of the same larger entity, they should be listed as a single source of work. For more on dealing with a client concentration issue, see the position paper here on "Qualifying Clients" (it's free).
You want that largest client to represent 15–25% of your total fee billings. Larger than that and most of the clients that follow will be too small to generate profit and to let you get deeply enough into their situation to move the needle on their behalf. Larger than that and your firm could also suffer harm when that much business is lost as the client moves on. But the larger the better as you nudge up against 25%.
Second, see how many clients....
Our recent analysis of ca. 300 firms found that around 98% of them weren’t getting paid fairly for their work. It comes from some degree of underpricing, defined as intentionally pricing a project at less than what an objective pricing would suggest, or over-servicing, which is intentionally over-delivering what you and the client agreed to.
Underpricing occurs before the project starts and it’s usually motivated by a fear of not getting the work, either because you don’t want people sitting around without enough to do or because you honestly believe that landing this project will open some opportunity for you (that’s a lie that’s easier to tell yourself).
Over-servicing occurs during the project itself and its motivations are more complex. A creative might land on something interesting to explore, and they might be excited enough to pursue it on their own time. Or the client might express some disappointment with your work as it unfolds and so you try to repair the relationship. Or the client begins flirting with a competitive alternative and you stretch to impress them. Or your positioning simply hasn’t created enough power in the relationship and you feel vulnerable. You might even care more about effectiveness than the client does!
Now here’s why underpricing is so dangerous. You follow a certain research method and creative process that cannot easily be compressed. You know this, too, because....
