A long time ago, I was told “… you will never find a poor butcher”.
While I can’t remember who told me this, I can remember what they said when I asked why …
“Because they make sure everything can be sold”.
They charge a premium for the best cuts.
A good price for the more popular parts.
And then package what’s left over to maximise revenue … from sausages through to ‘stock’ for stew.
In short, one animal can be sold in such a way that the money that it provides more than exceeds the money that it cost to buy.
Now compare that to adland.
Many undercharge what they offer.
Most have to negotiate on what they end up getting.
The profit margin they get is laughable for the time and effort they put in.
And almost everything is created in a bespoke fashion so that once it’s been handed over, it can never be used or sold to someone else again.
Madness.
What’s even funnier is that adland loves to go on and on about how they’re business geniuses but in reality, so much of what they do demonstrates they’re anything but.
When you start a business, cash flow is the killer.
To say you have to watch your income and outgoings is an understatement … and yet I think most agencies would benefit from pretending they were in exactly the same situation.
Why?
Because when you start a business you have 2 choices … go cheap or find ways to make the money you need to do all the things you want.
At cynic we chose the latter.
The problem was, we had so many things we wanted to do, we needed to find ways to make way more money than normal agencies would get from their clients.
And this became our first brief.
WHAT [LEGAL] THINGS CAN WE DO TO GET CLIENTS TO PAY US MORE MONEY?
We weren’t talking about ‘quality of work’ or a ‘clearly defined positioning’ … they were conditions of us wanting to start a company, we were talking about practical things, things we could or should do, that appealed to clients wallets.
And you know what? We came up with shitloads.
Sure some weren’t too successful, I think our ‘loose lips’ campaign – where clients paid us to act as an ‘early negative news warning system’ [remember, this was way before things like Twitter] – got about 10 subscriptions in 8 or so years … however our royalty scheme remuneration policy basically not only kept us in business, but gave us access to the sorts of briefs adland would kill their parents for a shot at.
However the one I want to talk about is how we followed the philosophy of butchers to sell the same research countless times.
When we started, we got quite a lot of projects where companies wanted our view on stuff.
The future of travel.
The definition of service.
The truth behind music choice.
Rather than approach the challenge specifically around our clients request, we thought about who else might find this information valuable and then went off and talked to people [in that industry] to find out what they’d specifically like to know.
Depending on the level of interest [or our ability to pre-sell the report to multiple parties] we would offer our original client the option to pay less for the work if they agreed to letting us reuse/resell the findings … with the guarantee [1] we’d only do this with brands outside of their core category and industry and [2] all confidential data would be removed.
While some clients were skeptical, most were quite happy to do this as the difference in cost was considerable … which meant that once the work was done, we were able to re-edit our findings [because we had included breadth of views and exploration in the overall process] and resell them for a significant fee.
Suddenly our report on the definition of service for Virgin Atlantic was able to be repackaged and sold to McDonalds and W hotels – which meant we had suddenly just tripled our income for not very much extra work.
Of course it didn’t always work out – sometimes we lowered our fee for a client and then found no one else was interested in buying the work we’d done – however this didn’t stop us from trying because as a small business, looking for ways to maximise our income was a necessity, not a luxury.
Everyday clients ask planners for views and perspectives on stuff.
Stuff that goes beyond the category and into understanding everyday life.
And everyday, planners present this information to clients in the knowledge most will nod their head and then place it on their bookshelf, never to be seen again.
While I appreciate it’s hard to get paid for this sort of stuff – especially if it’s within the scope of work of the annual agreement – I believe planners should not regard this as ‘someone else’s problem’ because if you want to do work that excites and enthralls you, you should look for ways to make this happen, of which obtaining the revenue so your bosses can’t bitch to you about ‘wasted time’ is one of them.