We will acknowledge that it is the availability of substitutes - the legitimate alternatives to the offerings of our firm - that robs us of power and allows the client to ask us for, and often compels us to give away for free, our most valuable product. If we are not seen as more specialized, more creative or otherwise more expert than our competition then we are viewed as one in a sea of many and we have little power in our relationships with our clients and clients-to-be.

~wwp~

The world does not need another generalist design firm. There are enough full service advertising agencies and marketing communication firms. The world is drowning in undifferentiated creative businesses. What the world needs, what the better clients are willing to pay for, and what our best people want to develop and deliver, is deep expertise. Expertise is the only valid basis for differentiating our firm from the competition. Not our personality. Not our process. Not our pricing. It is expertise and expertise alone that will set us apart in a meaningful way and allow us to operate from a position of power.

Power in the client-agency relationship usually rests with the client, or client-to-be. His power comes from the availability of substitutes - his alternatives to hiring our firm. When the client-to-be has few alternatives to the expertise of our firm then we can dictate pricing, we can set the terms of the engagement and we can take control in a manner that better assures that our ideas and advice have the desired impact.

When the alternatives to hiring our firm are many, the client-to-be will dictate price. He will set the terms of the engagement. He will determine how much of our ideas and advice we need to part with, for free, in order to decide if he will choose to work with us.

It is first through positioning our firm that we begin to shift the power in the buy-sell relationship and change the way our services are bought and sold. Positioning is the foundation of business development success, and of business success. If we fail on this front we face a long, costly, uphill journey as the owner of a creative firm.

Positioning is Strategy

What we call positioning, others more serious about the business of their craft call fundamental business strategy. The strategy question of ‘What business are we in?’ remains The Difficult Business Decision. In creative firms the world over, firms populated and run by curious problem solvers, the avoidance of The Difficult Business Decision remains the root cause of most business development problems.

The Purpose of Positioning

Positioning is an exercise in relativity. Our goal when endeavoring to position ourselves relative to our competition is to reduce or outright eliminate them. By drastically reducing the real alternatives to hiring our firm we shift the power balance away from the client-to-be and toward us. This power shift allows us to affect the buying process and to protect ourselves from having to part with our thinking for free, from having to respond to wasteful and inefficient tenders or requests for proposals (RFP), and to otherwise needlessly devalue our own offering or increase our cost of sale; a cost ultimately borne by our clients.

The Benefits of Positioning

We can measure the success of our business strategy (positioning) by gauging our ability to command two things, simultaneously: a sales advantage and a price premium.

A Sales Advantage

Possessing a sales advantage means that when and where we choose to compete, we win more often than not.

A Price Premium

Commanding a price premium means that when we win, we do so not by cutting price, but while charging more.

Winning while charging more is the ultimate benefit and key indicator of effective positioning. Price elasticity is tied to the availability of substitutes. The more alternatives to hiring our firm, the less power we have to command a premium over our competition. If we are not winning while charging more, then we are trying to run a business of ideas and advice from a position of weakness. We are attempting to get away with a weak or compromised positioning. We are competing outside of our area of focus. Or, we have avoided The Difficult Business Decision altogether and have chosen, by not choosing at all, to run a business without a fundamental business strategy.

Control

Beyond the combined benefits of a sales advantage and price premium, positioning brings us control in the form of an increased ability to guide the engagement. And while there may be times when we repeat to ourselves that ours is a service business and the customer is always right, the truth is we are hired for our expertise and not our service. It is a mistake to believe that the service sector mantra of ‘the customer is always right’ applies to us. Like any engagement of expertise, we often enter into ours with the client not truly knowing what he needs, let alone not recognizing the route to a solution. For us to do our best work we need to leverage out outside perspective. We need to be allowed to lead the engagement. We need to take control. Typically we enter new engagements with as much control as we will ever have with the client and we watch as that control diminishes with time. Sometimes we lose it slowly and others quickly, but we always lose it. It is important therefore that we enter the engagement with as much control as possible.

When we specialize and reduce the availability of substitutes, we earn the ability to take back control in the buy-sell relationship, before we are hired. Without the power to play us against numerous competitors, the client-to-be will return some control to us, provided we ask and make the case for it.

Control in the buy-sell relationship means the ability to suggest an alternative way forward. Not only does control make it easier and less expensive for us to win the engagement, it sets us up to better serve the client’s cause and deliver our best work. For control within the engagement is what we need more than anything else to assure a high likelihood of a high quality outcome.

Asking for control does not come easy to us when we have little power in the relationship. Asking for control too has always seemed at odds with our belief that we need to demonstrate enthusiasm for winning the business. We are optimistic, enthusiastic people, but it is time now to admit that our enthusiasm has not served us well.

We Are the Sum of Our Choices

 We are lucky to be doing what we love. And we deserve to be able to do it. But as business owners we need to accept that loving our craft is no substitute for making intelligent business decisions. Being passionate about design or advertising does not grant us dispensation from facing The Difficult Business Decision. Once we choose to make our passion our business we then take on responsibilities to ourselves, our families, employees, suppliers and partners, and to our clients. Among other things, those responsibilities include the need to generate a profit above and beyond the salaries we pay ourselves. It is from this profit that we build strength, and deliver the possibility of options in many forms to us, our families, our employees and to our clients.

Who among us, when faced with the question, ‘Would you choose to be weak or strong’ would choose to be weak? We face this choice on the physical, emotion, spiritual and financial fronts, among others. We face it in our personal lives and in our business lives. Do we want to be weak or do we want to be strong? Some choose to be strong because they wish to rule others. Some choose to be strong because they wish to help others. Some choose to be strong because they experience the alternative and never want to be weak again. What we choose to do with our strength is our decision. But, as business owners we have an obligation to choose. And then to pursue the path we have chosen. Nobody chooses to be weak - physically, emotionally or financially. In business, weakness is a byproduct of simply not facing the question. Not making The Difficult Business Decision.

We Shape Our Businesses in Our Own Likeness

Our passion, harnessed by sound business principles, can be a license to bring reward to us and everyone involved in or touched by our enterprise. Our passion, unchecked by sound business thinking and the difficult decisions required of business people, can be our ruin.

The Cost of Creativity

One of the hallmarks of creativity is a fascination with the new and the different. Properly harnessed, this fascination allows us to bring fresh thinking to old problems, and ensure that our offerings to our clients are always evolving. Un-harnessed, our firm-wide desire for the new and the different can lead us to avoid The Difficult Business Decision. It can serve as a rationale for not having to choose a business focus, for not having to eliminate competition. We can choose to let our fascinations and passions go unbridled. We can choose to remain a full service marketing communication firm doing all things for all people. This lack of strategy will make us relevant to everyone with marketing communication needs. It will indulge our desires to do something different everyday, and to make every engagement different from the previous. But, when we make this choice (really, a choice not to choose), we invite all kinds of undifferentiated competition, as well as some highly differentiated, highly specialized competition. We invite numerous alternatives to hiring our firm and we place the power squarely with the client-to-be. In this environment we have no meaningful means to set ourselves apart, save cheaper pricing, our personality, our trademarked process, or other second-tier factors. In this competitive environment we will never be the expert firm, we will never command the respect or margin we want, and we will never be free of the pitch.

We must recognize that as individuals we are inclined against the narrow focus that drives deep expertise, but we must also recognize that our business must have this focus if it is to succeed and to prosper. We must see our protestations, rationalizations and justifications for not facing The Difficult Business Decision for what they are: excuses. While some make business success look easy, we know that the best rewards are the ones we’ve worked hardest for. As creative people running businesses, The Difficult Business Decision of deciding what business we are in is made harder by our inclination to preserve our options, to pursue something we’ve never done before, to reserve the right to do it differently next time.

Choosing a Door

The Difficult Business Decision is daunting. We are standing in a room full of doors. Being autonomous, creative, highly curious people, we want to see what is behind every door. That is what we want as individuals - to satisfy our curiosity and to solve problems we haven’t previously solved. But for the business, on some level we know that if we are to drastically reduce our competition - the viable alternatives to hiring our firm - and benefit from the resulting power shift, we know that we have to pick one door, walk through it and never look back. Our personal needs are suddenly placed at odds with the fundamental need of our business to focus. But, is it possible that on the other side of the one door we are facing (with dread) there is not one long gray hallway, not one empty, boring room, but, alas, yet more doors, more choices? Is it possible that what lies on the other side of the door is not the sure death of our creativity, snuffed by routine and boredom, but just enough focus to harness the full power of our talents?

The answer, of course, is that it is possible. But we will never know for sure unless we walk through the door and close it behind us.

Fun and Money

Fun and money have long been the two reasons we go to work in the morning. If we are honest with ourselves we will admit that in the beginning it was mostly about the fun. We were doing the work we loved. People were validating our expertise by actually paying us for it. There were late nights with colleagues, everyone doing what needed to be done to wow the client, or the client-to-be.

We were kindred spirits all sharing the same passion for our craft. There was music on the stereo, beer in the fridge and common purpose and passion in the air. We celebrated our wins together and commiserated over the losses together. In those early days the studio was more college dorm room or rock ‘n roll tour bus than place of commercial enterprise.

But things always change. One day it suddenly wasn’t fun anymore. The kindred spirits that once inspired us became a burden. Employees became overhead. The late nights were too much. Somehow the money and the respect we expected never followed. The money, especially. For a long time we were in denial about the money. We didn’t need it - we were having fun. Then, when we faced our reality and decided we did need money, we did so grudgingly. Now, we’re tired of having fun and we’re willing to admit we’re in this, at least in part, for the money.

There are greater causes by which to frame an enterprise. And there are nobler metrics by which to measure the value of effort. But we cannot escape the fact that money is both a necessity in life and the most basic scorecard of success in business. Even if it is not be the validation we seek it is the most basic of tests that we must pass: Is there a need for our efforts great enough to sustain and nurture them?

Courage

The good news is that there is no fun like making money, because financial strength affords us all kinds of options in our business and personal lives. The path to financial strength begins with facing The Difficult Business Decision. There are some exceptions to this first proclamation that we must all specialize, but it is unlikely that we are one of those exceptions. Until we make a brave decision, success will elude us and we will look at the market and complain about the economy or the clients all the while knowing that it was us. The problem has always been us, and our struggle with focus. We are at the root of our free pitching problem and we alone have the power to free ourselves from the pitch. The client will not free us. Our trade associations cannot help us. Our competition will not cease to give their ideas away for free. But there are things within our control and when we choose to take control then we can begin to shape our future.

We begin here by specializing and shifting the power from the client-to-be back toward us. From there, what once seemed impossible moves to within our reach.

~wwp~