I think we all get why they shouldn’t be too short. It usually means that your client didn’t see an equitable exchange of value or you missed something in the prospect vetting stage and had to correct it by just letting the client quickly slide off the roster after the ol’ college try.
But just because client relationships shouldn’t be too short doesn’t mean that they should last forever, either, because long term relationships carry clues to some things that I’d like to get you thinking about.
First, though, how long is too long? The larger context for that question is something that I’m sure you’ve seen across the entire marketing/creative field, and that’s the infrequency of AOR (agency of record) relationships. For just under fifteen years, your client relationships have more closely resembled a string of successive projects. You should have a specific number of those project-based relationships going on concurrently. You also want a steady stream of opportunity, with a roughly equal mix of organic leads from your own marketing efforts and passive referrals from delighted clients.
With that background, you would aim for client relationships (of continuously successive projects) that last 3–6 years. Shorter than that and you may not be screening them carefully enough. Longer than that and....
I am no longer the President of Ryder Communications Group. I no longer have to make payroll every 14 days. I no longer cut my prices to bring in work. I no longer wait 120 days to get paid. I no longer give my expertise away for free. I no longer work with clients I’ve kept for far too long. I no longer get my six-figure salary or my fancy car paid for, or any of the other perks that come with being the owner of a small design firm.
I let it all go. After more years than I’d care to count, the fire in my belly to keep it going faded. And as hard as I tried to stoke the fire, it became clearer each day that something else was calling my name....
This is the third and final installment on tests of your positioning: five tests before you make a decision and four tests to see if you need to adjust it later, after you've been implementing it in the marketplace.
The first article was an extensive look at the first test. The second article added four more tests to bring the total to five:
The idea is then to live with your positioning for 18–24 months and then do a quick glance at the results to see if you need to adjust it. Even the best positioning decisions should be examined every 3–5 years, but those adjustments are usually to tighten it up. This examination nearer to the original decision is more drastic than that: you’re asking if you got it wrong, either from insufficient data or insufficient courage.
The better your early decision, the less likely any significant adjustments are necessary. This back-testing is critical, though, because you pause from the everyday flurry of client activity and enjoy that rich experience of thinking about your own business. This always happens better offsite, free of most of the typical distractions and framed in a new locale where your thinking is fresh. Do this early in the morning and then take the afternoon off.
Here are the four questions you ask yourself when you back-test your positioning.
How Smart Are You Getting
The distinction in the wording is intentional, and you don’t ask yourself if you are getting widely smarter quickly. Getting widely smarter is what happens when you take one client engagement after another and have to quickly get up to speed about the issue that this client is facing, and often on their dime. Most of that early learning is spent familiarizing yourself with the “drop and give me 20” insight that you’d be able to apply to similar situations later, if this client engagement flowed from your expertise.
I heard Blair Enns illustrate this once at....
There are five early tests that can be applied to your positioning before you make a choice. I’ve covered the first extensively in an earlier post (the number of competitors and prospects), and I’ll cover the other four here. Next month we’ll look at the tests that you can apply after your positioning is up and running.
Second Test: Drop and Give Me 20
This harks back to a Marine sergeant telling a private to give him a quick 20 pushups on the spot, or maybe a high school football coach doling out punishment for a bad 40-yard time. The idea is that at a moment’s notice, without any preparation, you can give me 20.
In this case, what I want you to give me is 20 insights that emerge from your expertise as applied to a particular focus. Here are the two rules that govern the exercise, and they are both assumptions you need to make about me, your audience for these 20.
First, assume that I’m smart. It doesn’t matter if I am—just assume that I am. Second, assume that....
How many competitors should you have? As you answer that question, remember that your prospects get to decide who your competitors are—you can’t decide for them. I want to give you some practical guidelines so that you can test your own positioning.
You’re attempting to craft a positioning where you are less interchangeable so that withholding your expertise has some practical impact. That’s the only power you have in a professional service context: to withhold your expertise. When you do that, they’ll turn to a competitor who, in their view, can replace your expertise. Too few options and your positioning is likely not viable. Too many and you’re easily replaced with no pricing power.
Think of the options as a spectrum, with the right side depicting a completely undifferentiated firm (“I’m a branding firm.”) and the left side depicting the most focused firm you could imagine (We take natural product brands to market, from research through packaging.”). At the beginning of this exercise, you are toward the right, wanting to move toward the left and be more differentiated than you are now. You’re aiming for fewer competitors so that your expertise supports a price premium in your work.
As you march from right to left, you want to make a complete journey and make really smart positioning decisions. As you work out the intricacies of the positioning journey, there are two forces that slow your progress: one good (lack of opportunity) and....
When I first started thinking deeply about positioning, then speaking at conferences about it around the world, I happened on this interesting icebreaker to get the crowds into it. It came about just from panic on my part.
I was sitting in my hotel room, going over my notes for a short 45-minute presentation that afternoon. I had plenty of time and was luxuriating in a relaxed morning. Everything was pretty much set. All the typos had been expunged, the transitions where firmly in mind, and I knew what the last point was on each page of the presentation so that I wouldn’t advance myself to an early death by calling for the next bullet when there was none.
The phone broke the silence, and the phone never rings in my hotel room unless it’s room service wondering if they can replace something I ordered that is no longer available. I answered the phone with a little curiosity in my voice only to find the conference organizer on the other end of the call. The speaker for a four-hour pre-conference workshop had taken ill with stomach flu and they were wondering if I could pinch hit, on my own.
Even though it was scheduled to start in just over an hour, I was generally familiar with the topic and was actually excited by the challenge. I knew, though, that I’d have to find some engaging exercises for the attendees to do. Not only would it keep them busy, but while they worked through them in small groups, I’d have a little extra time between micro-presentations to get my thoughts together.
I decided to start with an exercise that I’d never used before, and it became a fun staple over many years whenever it made sense. After that unexpected day, though, I wasn’t trying....
Even the most confident agency principals (and consultants) experience self-doubt if the pipeline runs dry. What was previously a genuine confidence now stands behind a quickly erected facade of bravado. While agencies in the US are generally doing well, some of you experience this every few years and others are experiencing it now for the first time since 2008. And outside the US, the agency market is generally flat.
But everything changes when the pipeline goes dry, right? Not only do you lack some of that killer instinct that stems from confidence, it all rolls up to further impact your psyche.
Times like these are when you should be able to reach for the switch to make it rain. Here are the things that you’d ideally be able to do:
Sometimes waiting is fun, like that interval between when you decide to go on vacation and when you actually go. The planning that takes place in that interval can be as great as the trip. Most of the time, though, waiting is just irritating, like waiting in the line to renew your driver’s license or sitting in traffic.
Smart agency owners know how long things take and are always planning ahead. They are usually really good about planning for one of those decisions, anyway, and that’s their facility. It’s a huge commitment, for one thing, plus blowing that decision will be impossible to hide. If they don’t think ahead, the team will work standing up, because there’s no place to sit down, and they’ll do it in the parking lot.
Contrast that with positioning decisions, though, and the consequences are more insidious but less obvious. Everyone will still have a place to do their work, but few of them will notice margins slipping, less effectiveness for clients, and so on. You can put off a decision about your positioning and life will go on.
There are other areas where you do a passable job of making decisions, like hiring the right person. Usually you think carefully about it and plan accordingly. You socialize the decision and spread the word within your networks. You’re patient during the testing and screening phases, and you’ve also gotten better at incorporating new employees well.
Where you really struggle is making big, important decisions about your future where there is no external deadline. Positioning comes to mind, especially, because of these three reasons:
When I commissioned this illustration, I thought the accompanying insight piece would be fairly easy to develop. The idea was to write about your competitive advantage and how to protect your agency from competition.
Not so much! Writing it has taken three times as long as normal, and it’s forced me to reexamine how I think about the topic. I will think out loud about the five things I tossed on this journey and then we’ll settle on the three that make sense.
As the principal of a creative firm, one of your duties is to defend the agency from external threats, similar to how a moat protected a castle. It was the first line of defense against invaders. Back then, though, the enemies were few and easily identified. Now they chip away at the walls from all directions. Some are actual competitors (other agencies), some are sea changes (client-side work replacing the very castles themselves), and some are existential (how we think about marketing). You aren’t repelling a huge mass of marauding cretins every decade; now the competition is a way of life, hitting the castle walls around the clock.
Your moat (competitive advantage) cannot be:
So after eliminating two early options for the sort of protection that a moat can provide, we’re still searching for an answer. Here is where I think we need to add “sustainable” to qualify the search.
Your moat (sustainable competitive advantage) cannot be: