2004: How Focusing on Value Creation Led to a Highly Profitable Win-Win
PS: Stepping Outside Your Lane - The Benefits of Cross-Functional Collaboration
“We’re an ad agency, we don’t have products, just services. We have packages for design, video, radio, newspaper and direct mail, but these are all just services for our creative team to work on. That’s what we sell here.”
I understood him to mean this:
Our creative people have billable hours to sell. We sell hours in the form of creative projects across all these mediums.
My idea was customer benefit driven. Create demand, don’t just react to a need.
The question I had was this:
What if we could serve the clients we had with tremendous value, and book more billable time, all while providing unique value that gave us something interesting to talk about?
I called it “The Christmas Insert” and it would generate billable hours and an extra $20,000 in profit all while making our clients feel they got something beneficial.
Happy Sunday Friends,
This is a PS. A personal story linked to GSD.
I tell these personal stories in hopes to inspire you to innovate and get stuff done!
2004 was the year we say Jamie Foxx acting as Ray Charles in the movie Ray.
This is the same year Anchorman, The Incredibles, The Polar Express, The Bourne Supremacy, and The Passion of the Christ movies hit the box office. It was also the year the sitcom Friends came to an end.
Since it was still early for the internet - YouTube was still a year from launching, we did a lot of work with traditional marketers.
A local ad agency worked with us on all their digital projects.
My web company acted as their technology team and I would talk directly to their clients as an integrated part of the account management and their advertising strategy.
As a result, I was in front of many of their clients as the digital expert “on the account”. This included attorneys, car and boat dealerships, restaurants, and of course retailers who were trying to figure out e-commerce.
What I realized was that the clients had projects, some had retainers, some had overarching strategies they were trying to fulfill through the agency.
I was included in overall account management discussions, strategy sessions, and internal problem solving on how to maximize budget and profits while satisfying the clients’ expectations.
This felt like seeing behind the curtain at the wizard of Oz.
In these discussions I learned about buying ads in newspapers, radio, billboards, television and a wide variety of creative projects to fulfill business goals around lead generation, branding, and sales.
As the holiday season approached, I saw a lot of clients had budget to spend.
Some were clearly able to benefit by running sales and discounts while others were not transactional and their needs were different. For example, attorneys didn’t run specials or discounts, but still needed to keep phones ringing and remain visible during the holidays.
This was an opportunity.
Using vision, intention, and means I could see something the agency did not.
We had the means and we had the leverage.
We (the ad agency) could leverage all our media buying expertise and pricing. We could leverage all our account creative with artwork and knowledge of the past ads and strategies of the account. We could leverage all our understanding of their budgets and how they described a successful project. And, we had the talent in house to do everything from idea to design to print and placement.
We had the intention.
Because the agency was in the service of their clients to bring them growth and success as well as good ideas, we were seen as the ones to get stuff done that helped them.
I had the vision.
The “thing” I was thinking of could be printed and inserted into all area newspapers, about 250,000 homes could be reached. This would be good for the agency clients. I could see clearly in my mind how all this could come together to create an ideal outcome that benefited the clients and us. I could see an idea that we could deliver that would create value and be very profitable.
I just had one problem.
I was the web guy. My expertise was e-commerce and websites.
I was the outsider. A tool to do a specific job. Websites.
Who was I to come in and suggest a disruptive idea that implied I knew something about their clients and talents they did not?
Despite advertising agencies being seen as idea guys, friction was high on outside ideas coming in. They didn’t want to be accountable for something they didn’t come up with – it might fail. This might cause them to look bad.
I needed to make it tangible and obvious with as little ‘creativity’ as possible. They were the “creatives” not me.
If I could take it out of the realm of creative ideas and the ‘what if’ dialogue they would be less likely to grade it on it’s cleverness or what they valued as their secret sauce.
If I could instead turn it into a project that needed execution with a clear path to results, then I could bypass some of that ego and make it about client results and business results for us.
This is what I did:
I made a mockup with some newspaper and a big black marker.
It wasn’t fancy at all. I wrote client names in various size blocks as the ideal ad size for their company. I assumed this would be accepted by most but not all the agency clients.
I made a rough one page flyer with basic copy that described the thing.
It was a full color multipage newspaper insert that would go into the two area daily newspapers and the 6 smaller community weekly newspapers. It had three ad options; quarter page, half page, full page and two exclusive opportunities the front and back page. It would include a variety of advertisers and their specials.
I made a basic financial forecast and outline.
This was my best guesses on printing cost and and the ideal selling price of the ads based on what it would cost to place similar size ads in the newspaper. My goal was to make it cheaper than just buying a newspaper ad directly. I then made my best guess at what we would charge to make those various size ads as a creative project assuming the normal rates I had already seen. This gave me a simple but clear business case of cost, project revenue, and profit.
From this, I made a simple internal flyer.
I do not remember exactly how I phrased it, but it was something like this:
What if we could make $20,000 in profit and get paid full rate to design 15 ads for 15 clients where they all thought the agency had given them a great deal?
And then I had the abbreviated details on the who, what, when, where, and how so it would all be contained in the one page.
The message was clear…
Make money. Make clients happy. Do something only we can do.
The pitch
At the next group internal meeting, I made the pitch.
Because I had to get specific information during the week on various printing and design cost the agency team knew I was working on something. So in this regard it wasn’t a total surprise.
When I passed out the simple “make $20,000” profit flyer it got a lot of smiles and head nods.
Interest was high, and of course they could tell it was “just a printed newspaper insert” with “simple print ads” in the insert. Work they had done countless times before. All very block and tackle - low risk. High reward.
I walked over to the agency owner and put my crude newspaper mockup with the marker drawings of boxes. He chuckled at the low tech and low creative approach.
I briefly explained it in my own words.
I told them my plan was to pitch them today on doing this so we could discuss it.
Except I had just one problem.
About 30 minutes before our meeting, I called their big attorney client who I was involved in building their law firm website, seo, and online ads. And sense I had a personal relationship already, I thought it would be good to get perspective from a potential customer for this project.
I explained innocently with wide open gestures that I made the call to check the interest in this idea. My thought was since he ran newspaper ads all the time, it seemed like the right thing to do.
I saw some grimacing, no more smiles from the agency owner or the team.
“What about the problem?” the agency owner asked.
Right. Well the reason we had a problem is because the client started asking questions about it and when I said it was in all newspapers including the weeklies, he was even more interested and asked how much it would cost.
My intent was to just get feedback. But since he wanted to know cost and we hadn’t talked internally yet about the price we would charge - or even if this was good to go… Without hesitation I gave him the answer to this question.
I just doubled the already premium price I was thinking for the front and back pages.
The agency owner blurted out the price based on the flyer in his hand – shocked.
The others laughed nervously at my boneheaded mistake.
“Yes” I said.
“And he bought it. Right there on the phone.”
Jaws hit the floor and eyes bulged out from everyone.
Smiling ear to ear I continued.
“So from the best I can tell, this covers all the print and insert cost already. So now every additional client we sell Is adding profit!”
The operations guy chuckled. He was the one that told me the note at the top of this message – they sold hours not products.
He straightened the papers on the table.
“Well, looks like we have work to do, let’s get this moving so we hit the print dates”.
And that was that.
Within the next two weeks I followed up with the other clients and made similar offers which they agreed made sense. It turned out to be a highly rewarding project for all of us.
Here’s the thing.
When you focus on value creation and being helpful, you see things others don’t or won’t see. And when you add vision, intention and means to your work, everything becomes clear.
This clarity is inspiring and actionable, all you have to do is get stuff done.
This is the GSD way.
Ask yourself what you can see – what has value and can help others? Are you acting on it?
#GSD
I appreciate you,
Justin