But now is not the time to take your eye off the prize. In this recovery period, managing can be tricky, because we’re a little tired of fighting the fight and are looking forward to backing off a little. Don’t do it.
We’ve developed 25 steps you need to consider in managing the agency during this recovery period. Here are the first half…. (and here’s the 2nd half!)
- Make sure your strategic plan is in place, and that it focuses on some specialization with diversification.
- Now is the time to grow the agency, and within the context of your existing operations. New business programming is critical, but isn’t the only source of profitability.
- Your managers and account staff need to understand what others do and why certain reporting requirements are needed to manage the agency effectively.
- Be a sponge. Get all the input you can from peers and suppliers about competition and how they are handling the recovery.
- Get into a network group to discuss operating techniques. If the network is an advertising agency network, that’s better than a “business” network with people from other businesses.
- Always keep an eye on your profits. Don’t assume that the bigger clients are the more profitable clients. They may pump in a lot of bucks, but they may be sucking the life out of the agency because they aren’t profitable. Watch them all and know where your profits are coming from.
- Take another look at your fees and retainers. They should all be minimum fees and allow for adjustment when the scope of work has expanded along with the growth of the client.
- If prospects don’t meet your financial standards, or if you have current clients you’re “banking”, make sure to protect yourself. Remember, that “less is more.”
- If you’re still figuring hourly rates, use a multiplier of at least three and be sure to include base salary, taxes and benefits in the base number.
- Put together a plan to get rid of hourly rates and billing by the hour. Soon.
- Remember “value pricing” and charge the client what the work is worth to them, not on how many hours it takes to complete the work. Most agencies leave a lot on the table.
- Manage all your freebees and make sure you know each month what you’re giving away. Every client should have a “no charge” code on each project where staffers can record their time that is not being billed. Watch the out of pocket costs too, and make sure they get charged to the client account whether you charge for them or not. At least the “cost” will be posted as a cost of doing business with that client instead of being added to overhead.
- Make sure you know who your heavy hitters are on staff. Know who is contributing the most and don’t be afraid to reward them for contributing to profitability and agency reputation.