In my 22 years in Chicago, I have become a die-hard Chicago Bears fan (and a fanatical one). And, a Mike Ditka fan. Last Monday, we retired Mike’s number 89, but hopefully, we didn’t retire his philosophy on how to win games and a Super Bowl – one of the toughest championships to win. It is the same in business, especially in the marketing services business. You need to think like a Super Bowl contender to create ideas that help brands differentiate in today’s commoditized and homogenized marketplace.
My approach, the one that I have always asked my teams and companies to follow, is to think and act differently. Differently from most other agencies who are always focused on pitching new business. My direction to my people has always been… come in every morning thinking about what else you can do for your clients to grow their business. Find new ways to help them differentiate and win. Do it in a way that none of our competitors will… because if you do, you won’t have to worry about your business (or your job). This is Papa Halas and Coach Ditka’s philosophies. And, mine! Play strong defense and the odds of winning improve significantly.
We all know this. If you help grow your clients’ business, you’ll never get fired. Come up with new ideas and new programs that help them become successful. Yes, personally successful. Because, if they succeed, so do you. In the service business, you are what you create… for your clients. Just like Bears football. Don’t turn the ball over (don’t lose clients), grab turnovers (find ways of solving problems other agencies don’t), get interceptions (solve problems nobody sees), and run back for touchdowns (find ideas no one else can). Once you can find a way to play strong defense, it opens up the field for the offense.
We might think all this talk of defense is boring. I confess, I enjoyed the MNF game where we scored 45 points in the game against the Cowboys. But making offense the only focus is a big problem in our business. Throughout my career, I have seen agencies running hard and fast after new business. I understand the allure. As an agency new business guy for many years, I did the same thing. New business is fun and winning is seductive. You get a lot of press and buzz. There are parties and celebrations after a win. Careers and reputations are made by wins. What I realized about a decade ago, was by just focusing on offence, and new business, agencies risked existing client relationships.
Here’s what happens. Because the best talent is out pitching, current clients don’t get the quality of attention they deserve. This causes issues in quality of the thinking and work, resulting in another pitch. The churn has gotten worse over the years. In 1984, the average client-agency relationship tenure was 7.2 years. By 1997 (13 years later), that number declined by 25% to 5.3 years. Today the average client-agency tenure is thought to be less than three years (The Bedford Group). Living in an environment of churn is also one of the worst ways to build a sustainable culture. It’s a horrible feeling when clients are walking out the door on a regular basis and the desperation of winning new business intensifies. Employees are always worried about their jobs creating an unhealthy environment.
In case you think this is just some theoretical concept. It isn’t. Most agencies today struggle to grow faster than low single-digits. Defense-oriented companies tend to deliver much stronger growth. Here’s how: focus your attention on your top 10 clients and push to grow each by 10%. Chances are these clients account for 70-80% of your revenue (the Pareto principle is alive and well in our business). This approach will provide 7-8% topline growth, and will be more profitable because margins on existing client growth are always better. You are now growing at 2X the industry rate. Now, if you won just two nice-sized new business pitches, you will have delivered double-digit growth for the year.
The good news is this approach requires a simple shift in strategy. Just like the Bears, the key is to play defense – which to us means, grow your existing clients. Become their trusted partner, solve their problems, and focus on making their lives easier. Make a decision that you are not going to lose any clients this year. Decide that you are going to grow those clients. Make organic growth your mantra. Agree to grow each one of your current clients by 10%.
There is another huge benefit that comes with this strategy shift. You will see a change in your employees as well. They will appreciate, cultivate and enjoy longer and more valuable relationships with their clients. They will be challenged in their thinking and will learn new skills to stay a step ahead. The franticness of constantly pitching will dissipate and the work environment and culture will become more stable.
Now if the Bears can just get their defense back on track for the rest of this year, we’ll be in good shape!