Tag Archives: Agency

What Do You Manage as You Adapt to Market Conditions? Four Points

Situation: A company is in the process of adjusting its customer and business focus in response to changing market conditions. Gross margin on projects that have been the company mainstay in the past have fallen significantly. The CEO is evaluating different adjustments to address this. What do you manage as you adapt to market conditions?

Advice from the CEOs:

  • The company’s business model is shifting from a staffing agency to a product development model. This means that the business must be driven by a different set of parameters and metrics:
    • A different time/utilization mix.
    • Different personnel – the company needs managers.
    • Changes to the organizational chart and incentives.
  • How does the company currently charge clients for Project Management?
    • Currently it is time and materials.
    • Consider charging on a percent of project cost basis. For example, 15% of total project cost. The pitch will be that the client will be able to reduce the overall cost of the project – ideally in both dollars and time – and that the company will have increased accountability for delivering these results.
  • How will this impact the company’s cash position? How will the company retain adequate cash flow during the transition?
    • The current cash position is 4 months of projected monthly cash plus receivables.
    • If there is drop to 3 months, flag a yellow caution light.
    • Two months becomes a red light.
    • What is the backstop if the company runs shy – if, for example, some engineers are not very active? In this case, will deferral of unpaid vacation time and other options allow the company to survive without further draining cash? Have a meeting with key managers to evaluate the impact of this option.
  • Consider looking at competitors for possible collaborations. This can be delicate because they may want to steal the company’s personnel and there are other risks, but sometimes promising deals can be arranged.

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Do You Need a Formal Marketing Function? Four Points

Situation: A small company serves a specialized, targeted group of customers. The founder/CEO seeks advice from the group on whether it is time for the company to create and staff a formal marketing function or can this be outsourced. Do you need a formal marketing function?

Advice from the CEOs:

  • The company services a specialized and targeted group of customers. However, they target the high end of this market, so the target market is smaller.
    • A highly targeted promotional and marketing strategy will work best.
  • There are two principal functions within marketing: providing direction to guide product development efforts and creating awareness of the company’s products through promotions and advertisements.
    • To serve a narrow market, the information and insight gathered from trade shows, technical meetings, the company’s sales and design engineers may be sufficient to drive product development efforts.
    • It may not be necessary to do more than this unless the company is planning for substantial growth and wishes to diversify the product offering in a short period of time.
  • To handle promotions and advertising there are two options: hire an individual to do this or utilize the resources of an outside agency.
    • The marketing plan should be refreshed and updated on a regular basis – at least annually.
    • A good task for the company’s marketing committee is to become aware of local resources that could help.
    • Identify marketing themes to guide advertising in specialty magazines, supported by trade shows, technical conferences, and on-site training session for key customers.
    • Create and maintain a calendar of marketing activities and assure that that messaging is consistent across promotional events.
  • If the strategic plan calls for substantially increasing the revenue base or broadening the product offering, consider a merger with a competitor that already has the ability and resources to meet these needs.
    • Just the planning exercise for a merger will help the company to evaluate the issues involved in market expansion.

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Can Social Marketing Leverage Your Competitive Position? Six Points

Situation: A company seeks to leverage the difference between information from traditional media and the richer information available through social media. Their objective, using publicly available information, is to identify individuals’ specific plans or preferences to better target their clients’ marketing dollars. Can social marketing leverage your competitive position?

Advice from the CEOs:

  • The principal value proposition is the ability to mine publicly available information from consumers through social media and make it useful to advertisers who want to reach those customers.
  • If the company’s technology allows access to shared data which can be used by many companies this is less expensive than clients’ trying to go it alone.
  • The most important differentiation will be the timeliness of data. Many firms collect data after the fact – for example after a key purchase is made. What advertisers desire is the ability to anticipate purchases. An example is a consumer’s plan to buy a house. This information is valuable to many companies. If data is mineable, it is valuable.
  • The essential question is how the client will make more money from data being near-real time. If the client can use the company’s data to enhance their marketing database, this adds value.
  • Consider partnering with the agencies that B2B and B2C companies hire to advertise their products. Even the largest consumer B2B and B2C companies work with outside ad agencies because these companies have better access to targeted customer lists than the companies.
  • Consider a subscription model, offering access to unique, current data to many customers. The differentiating value is the currency and timeliness of the data. A subscription model generates an ongoing revenue stream.

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How Do You Create The Best Buzz? Five Suggestions

Situation: A company has an opportunity to use equipment supplied by a partner to create a demonstration project that will highlight their capabilities. They want to create the best buzz possible through this effort. One idea is to work with local service agencies to create a demonstration that will be highly appealing to news outlets. How do you create the best buzz?

Advice from the CEOs:

  • In addition to working with local agencies in your target localities to create publicity and awareness, work with the local newspaper reporters who write about the areas served by these agencies. City reporters are always looking for fresh stories, and will help you to generate instant news that may be picked up by other local and possibly national media. This form of building awareness virally is much more effective than traditional advertising campaigns.
  • Use industry trade shows of potential partners as demo venues by collaborating with the trade show organizers for a live demonstration that benefits the organizers. Let technical trade publications know about your demos. Stories that catch the attention of technical publications can also get the attention of national media and give you visibility far beyond the trade shows.
  • Use YouTube to highlight use and the impact of your service. Assure that your YouTube videos are interesting and attention gathering. This will help generate viral awareness.
  • Look at how Google helped to make Mountain View, CA a wireless city. They worked with the city and created great excitement both locally and nationally.
  • Consider using actors to stage demonstrations, followed by actual demonstrations.

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