Monday 27 August 2012

Why some clients are just no good for you

When my business partner, John Wood and I were building up our top 20 ad agency Beechwood in the 90's (which we sold in 2001 to Chicago based private equity group GTCR ), we had three rules about new clients: they had to be nice people to do business with; we had to have the opportunity to do great creative work; and we needed to make at least a 10% net profit margin from running the account. Now getting all three was rare indeed but we insisted that we got at least any two out of the three before we would take on a new account - now you might think this sounds somewhat arrogant but ad agencies can be whores and often grab any business that they can lay their hands on and this in my experience nearly always ends up in tears for both parties.

When searching for a new agency, clients will ask an awful lot of questions and insist on exhaustive questionnaires being filled out as part of the procurement process but how many agencies ask enough questions in the other direction? Not many - regrettably they are too busy tripping over themselves being whores. 

Why not a questionnaire in the other direction? This would soon establish whether a client was serious about finding a new agency, tell you something about their working practices and give you a feel of whether you might be a good marriage of companies. Many clients would also have greater respect for you by asking these questions and presenting them with a reciprocal form, and to be honest if they are not up for it, then surely that tells you something about them.

In last week's Financial Times, Luke Johnson wrote about autobiographies from great business tycoons, which he felt were much more useful for budding entrepreneurs than reading books about business. I was pleased to see that he listed the book that got me in to advertising over thirty years ago, Confessions of an Advertising Man, by David Ogilvy. There is an excellent chapter entitled, 'How to get clients', which still stands true today as much as it did when he wrote it in those 'Mad Men' days of 1963. Here is one of my favourite stories produced verbatim from the book which demonstrates perfectly when you need to be able to say no.

'If you aspire to produce great advertising, never take associations as clients. Some years ago we were invited to pitch for the Rayon Manufacturers account. I duly presented myself at their headquarters and was ushered in to a pompous committee room.

" Mr Ogilvy", said the chairman, "we are interviewing several agencies. You have exactly fifteen minutes to plead your case. Then I will ring this bell, and the representative of the next agency, who is already waiting outside, will follow you."

Before entering in to my pitch I asked three questions:

"How many of the end-uses for rayon must be covered in your campaign?" Answer: automobile tires, furnishing fabrics, industrial products, women's clothing, men's clothing.

"How much money is available?" Answer $600,000.

"How many people must OK the advertisements?" Answer: the twelve members of the Committee, representing twelve manufacturers.

"Ring the bell!" I said and walked out.

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