What Outsiders Think of Us

When you’re inside an industry, like readers of this weekly missive certainly are, you forget how weird that industry can look to outsiders. That alternative perspective is something that we usually pick up in our M&A work: some buyers are “insiders” but some aren’t, and those “outsiders”—when you listen to them carefully—can reveal some really interesting insights.

Valuable Insights?

When you hear those things, the easiest thing to do is to dismiss them. “Hah. They don’t know how we do things in this space. Just give them a little time.” But I think the more mature response is to pause for a minute and think about whether they might just have a point! Or at least to laugh at ourselves a little bit.

From An Outsider’s Perspective

So here are some observations about our industry from outsiders who haven’t quite gotten used to our disfunction. Yet.

• You mean anybody can start a firm? There’s no certification body or standards? Anybody? Wow.
• Wait a second. All project to project? You mean you’ve been doing this for 19 years and rarely have a long-term contract with a client?
• I can’t believe how little you pay yourself…and how well paid your people seem to be. There’s hardly any difference.
• Run that one by me again, because I’m not sure I heard that right. Let me see if I have this straight. Prospective clients will invite six or nine firms and ask each of them to solve their biggest marketing challenge. Then they might…or might not…decide to work with one of them. But they get to keep the ideas you give them, they don’t pay you for them, and then sometimes they’ll put the last four firms in consideration into a reverse auction to see who will do it cheaper?
• Someone told me the other day that one of the larger F100 firms asked their agencies to accept 360-day payment terms as a condition of working for them. Do those agencies have a lot more money sitting around than massive, publicly traded firms? Is that why they do it?
• We’ve been looking at a half dozen firms as potential acquisition targets. As we’ve gotten to know them better, we’ve asked each of them about how they fill the marketing funnel. What they said kind of floored us, especially because their eyes lit up when they answered the question. They had slightly different answers, but they proudly said that they were too busy to do traditional marketing, and that their work spoke for itself, and they have always been proud of their referrals and people changing jobs and taking them with them. Frankly, that struck us as a little dangerous and sloppy, but what do we know.
• We thought we knew quite a bit about business strategy, but we keep coming across terms that all of them seem to use, but only in this industry: storytelling, positioning, etc. And they use different names for their people, too: principal, producer, and some others we can’t even remember now.
• We’d look at a firm’s website and came away not all that sure what they did for a living. Seems like they want to be cool, inclusive, and committed to their clients. The first one we saw was impressive, but then it seems like they were all singing from the same sheet music. And what’s with the dogs everyone lists with the team?
• There’s a lot of talk about diversity and belonging, and I saw lots of women, but not many Hispanic or Black folks. The industry seems like mainly upper middle class white people who went to famous colleges. How do they understand and then market to inner city and rural buyers?
• Overall, these firms seem a little apologetic about making a lot of money. They make so many promises on their website that I wonder what’s going on behind the scenes. Are they too eager? Does the industry have a bad reputation they’re trying to avoid? Why are they always yammering about having the client’s best interest at heart? I don’t see that from accounting or law firms or architects. It’s weird.
• Why am I having trouble making eye contact with the “Creative Directors,” whatever that person does.
• Is it a thing to be running an eleven-person firm and calling yourself a Founder, President, and CEO, all at the same time?
• Why do they always tell the Researcher/Strategist what to wear to the next client presentation?
• These places look like a lot of fun. I kind of wish I worked at one of them.

Well

Let me know if I left anything off. And I’m just having fun with you all. I just finished five speaking engagements in two countries across eight days and I’ve got no real insight in me until next week.