I had the opportunity to join a day-long meeting
of PR agency executives last week. While a few were excelling, most were
struggling in the current economy. Many, in fact, had taken Draconian cuts
to assure their firms remained profitable. Others had re-assigned formerly
billable staff to nearly full-time marketing and business development
activities. It was grim, to say the least.
I hope these firms succeed in their prospecting, but making changes after the
fact is akin to trying to run down the proverbial horse that's already bolted
from the barn.
But, I digress. At the meeting, participants agreed that clients were not only
inviting more firms than ever to pitch their business, but taking an inordinate
time to make a decision. One statement in particular took me aback. An agency
principal reported that his firm had won no fewer than three recent pieces of
business only to be told the client budget no longer existed. Ouch! It's tough
enough to chase down some of these leads. But, imagine receiving a call that
begins with the prospect/client saying, 'Herbert, I have some good news and
some bad news. Which would you like first?'
I went through the 'now you see it, now you don't' experience once before. It
was back in those lazy, hazy, crazy days of dotcom-mania. We'd pitched a
company, been awarded the business in the morning and then fired in the
afternoon. Apparently, the CMO had neither the authority nor the budget to hire
a firm. Nice.
Last week's therapy session also reminded me of Peppercom's first big setback.
We'd been in business for about three months when I received a call from a guy
with whom I'd once worked. He was now head of human resources at a global
chemical company and had a mega budget for employee communications. 'Steve,' he
said. 'I want you guys to overhaul everything. Soup to nuts. You give me the
budget and I'll authorize the purchase orders. Oh, and we need to start
yesterday.'
Talk about manna from heaven! We had one or two other small clients at the time
but, in one fell swoop, this chemical company client was about to transform the
fledgling Peppercom into a multi-million dollar agency.
Ed and I quickly crafted the program (with Ed gleefully whipping together
massive budgets, btw). The two of us then barreled up Rt. 95 to Connecticut to present the plans and budget, and begin the work.
When we arrived at the reception desk and asked for the contact, however, we
received a puzzled look. 'Why don't you take a seat?' suggested the
receptionist.
About 20 minutes later, a woman came strolling out. She introduced herself as
the new head of human resources and corporate communications, and sighed, 'Did
no one contact you about John?' We shook our heads. 'Well,' she continued,
'John was fired last week. I saw your proposal and budgets and, frankly, have
no interest in working with you. I'm sorry you had to come all this way.'
Boom. Easy come, easy go. Talk about a long, brutal ride back to Manhattan. The word 'funeral' came to mind.
I was never able to track John down to find out what had happened. And, he
never bothered calling me.
Ed and I overcame our shock and disbelief (as well as our intention to hire 10
people and move into new office space) and went back to cold calling new
business prospects. (Footnote: a variation of this anecdote occurred many years
later when a global CMO promised us a $10 million budget only to disappear a
few months later).
Business always has its ups and downs, in good times and bad. While
commiserating over one's bad luck can be cathartic, I've found the single
biggest 'secret' to success is resiliency. When an ITT, Panasonic or a Unisys
fires you, you pick yourself up, dust yourself off, paste a smile on your
face and charge ahead.
There will always be clients who spin your wheels and dangle assignments and
budgets they have authority to award. And, every once in a while, there will be
a prospect who disappears completely after promising a wealth of riches. The
best remedy is to simply chalk it up to the vagaries of business: yesterday,
today and tomorrow.
Has anyone heard of Harld Camping and his book “We Are Almost there” I am a former Pastor and was wondering if anyone has heard about this date?
I like to join please?
Greg, interesting enough I believe playing it safe in this environment is the riskiest way to go. Playing it safe is a big reason as to why budgets are being cut in the first place. I can’t imagine it is too rewarding to be a CMO who has to play it safe and work with shrinking budgets. Clients need partners who will help them take calculated risks. If you can demonstrate and quantify results then the ultimate decision makers will be able to jutsify taking these risks. The question is as an agency are you willing to lie down on the chopping block with your potential client?
Steve, I agree you never want to position yourself as the low cost provider. That being said, now is the time to compete against the larger agencies/firms who are limited by their tremendous overhead. By focusing on quantifiable results your prospects (on their own) will begin to realize the larger players are often times overpriced.
Thanks Greg (and Robert): You both make great comments. That said, I never, ever want to be positioned as the low cost provider in any pitch. I’d rather lose than be seen as the Woolworth’s of PR.
Robert, appreciate your input. Everyone is feeling pinched in this economy. The buyer has choices. But many budgets have been cut, perks have been reduced or eliminated snd so forth. So how does a department head justify to the boss that he or she has approved a PR/communications plan that may be over budget? Sure, there may be added value, but they are sticking their neck out in that situation and instead of putting their head on the chopping block, they prefer to play it safe. Look at advertising. While it makes sense to continue to be visible, many companies have reduced their ad spending or gone into hibernation. Differentiion is always a key, but does not always determine the winner.
Steve, It’s much easier to be resilient when you are empowered with your prospecting. Your colleagues are so grim becuase they are unable to see the opportunities which have actually been created because of the crisis in our economy. Stephen Dubner (co-author of Freakonomics) recently wrote about crisis being the mother of innovation. I could not agree with him more. To all of your grim colleagues now is the time to innovate and become truly great.
In reponse to Greg’s comments, buyer’s will always choose the lowest bidder when they can not see a clear differentiation between options. I see no shame in that. Who wants to pay more when you can get virtualy the same for less? What I see are three opportunites. The first is to not alawys be so responsive to your propect’s RFP. If you are able to change the rules of the game you will no longer be a commodity and prospects will pay a premium for the added value. The second is to look up and go after oppotunities which are being pitched by your larger competitors. If you are convinced buyers will choose the lowest bidder then put yourself in the position to be the lowest bidder. The third option, which I feel is the best, is to combine options 1 and 2.
It’s just like the housing market, Steve, in that it’s a “buyer’s market.” They will take their dear sweet time in making decisions and, in all probability, will choose the lowest bidder. It’s a shame, but that’s what’s happening.