Thursday, July 23rd, 2009

The cobbler’s children

The cobbler’s children
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When I talk to companies about what we do at smashLAB, I often use a simple analogy. I note that for as good as I am at helping my wife find flattering clothing, I struggle with what to wear almost every day. It seems that no matter how strong our judgment may be, it becomes less clear when looking at ourselves.

Most designers know exactly what I’m talking about. In helping groups find suitable ways to present themselves, they’re often stymied by moments of discomfort from the person who will ultimately “wear” the thing. So, you’d think we’d be better when it came to ourselves; unfortunately, this is hardly the case. For as many design companies as there are, you’ll find an equal amount of bewilderment regarding marketing, sales and positioning.

Some months (perhaps years) ago, Blair Enns’ email newsletters started appearing in my inbox. Initially, I found myself daunted by their length and left them unread. On the suggestion of Karo’s Chris Bedford, however, I took a closer look. What I found was some of the most lucid and insightful writing on the topic of selling design services. Most surprisingly, it was coming from a guy in Kaslo, B.C. (population 1,072).

What Blair does

Eric: As succinctly as possible, tell us what you do.

Blair: I’m a sales consultant to marketing communication firms. I teach design firms and ad agencies how to win without pitching – how to get new clients without first parting with their thinking for free.

Eric: Tell me a bit about what led you down this path. Also, how long have you been doing it for?

Blair: Twelve years into my agency career I realized that marketers can’t sell. I suddenly saw that the free pitching problem was an agency problem and not a client problem or an industry problem. From there I spent a lot of time thinking about the problem, experimenting, first with my own efforts then those of my early clients, and leaning heavily on guidance from outside the agency bubble – people who didn’t have the preconceived notions of the rules of pitching. I’ve been at it eight years now.

Eric: What does the consulting aspect of your process look like? Do you visit the organization or work remotely? What length of time do they engage you for? Are there standard deliverables that you work towards providing?

Blair: I begin with a business development audit where I look at how the firm goes about getting new business now. I’ve learned that there are four key variables to business development success and in the audit I drill into each of them. I do that remotely over two to three weeks. Then I’m onsite doing training for two days (it’s more like de-programming), and finally I do remote consulting support for 8 – 12 weeks. I’m sometimes re-engaged for up to 12 weeks at a time on a coaching basis afterwards but I’m a better consultant than I am a coach.

Eric: Can you provide some specific examples of how you’ve helped companies–perhaps by sharing where they were at both before and after your engagement?

Blair: There are the financial successes where firms have added X dollars to the top line, but I think as a consultant you have to have a lot of hubris to claim “I did that.” Success has as many variables as it does fathers. My clients’ successes that I’m most proudest of and most comfortable claiming some ownership in are the stories of personal transformation where, beyond winning new business, the owner of the firm finally feels like he is being treated with the respect he deserves. One of my earliest clients was a guy who had run his own firm for 25 years. He called me one day and said, “Something happened today that has never happened before. The prospect said to me, ‘You’re the expert here – what should we do?’ In 25 years, no client has ever called me the expert.”

I remember that moment in my own career when I first tasted the power that comes from being seen as the expert. After that I never, ever wanted to go back to the old ways of trying to earn the business through service or gimmick-laden pitches. The whole Win Without Pitching approach can be summed up as, get the respect and the money will follow.

Eric: And you do this from Kaslo, which… ummm… isn’t exactly the global hub of design. Why did you choose to work there, and how does this work for clients?

Blair: My wife and I fell in love with the place when we tripped over it 14 years ago and we were determined to live here. When we finally made the move five years later I was forming the idea of this consulting practice but if it didn’t fly I would have pumped gas to live here. I was dealing from this incredible position of strength in that I was willing to be poor to be happy. I needed to live here.

In the beginning I kept my location a secret. “I’m just outside of Vancouver.” (nine hours outside) Then I realized that my location was irrelevant. My clients are in the US and overseas. Less than 2% of my business comes from Canada. I’ve never worked with a client within 300 miles of Kaslo. If my clients are everywhere then it doesn’t matter where I am, so why wouldn’t I live where I want? Travel from here can be difficult but I see it as a small price to pay to raise my family here. Plus I don’t travel in July or August when my kids are out of school.

The problem with creative companies

Eric: In your estimation, what percentage of design firms have effective sales/marketing strategies?

Blair: I’m not sure how many firms are effective at business development but I do know that very few are efficient. The cost of sale that firms are willing to accept is ridiculous. It perpetuates this harmful cycle of needing to drive more business, which leads to compromising on principles and margin to accept that business, which sets up the wrong type of business, which means we need more business, etc. The pitch-based approach is dysfunctional, and even the best practices within it are still, largely, bad practices. The most lucrative firms have a smaller client base and very selectively add a small number of high quality new clients in a year. There’s less frantic activity and more measured evaluation of the opportunities at hand. They say no a lot more.

Eric: The percentage that doesn’t fare quite as well–what is it that encumbers them most?

Blair: Lack of power. In the typical client-agency relationship it’s the client that has the power, not the agency. The client’s power comes from the availability of substitutes. There are too many undifferentiated design firms competing for too broad a spectrum of clients. This plethora of choice in sellers shifts all the power to the buyer. It’s Economics 101.

Eric: So, how do they fix this?

Blair: The only real way for a firm to shift the power is to eliminate as many substitutes to hiring their firm as possible. They do this by building a deep expertise. The easiest way to build deep expertise is to narrow the focus of the firm. But this is where the conflict starts. Creative people, by their very nature, have broad interests and tend to resist focus.

Eric: Every industry has its clichés. Tell me about the blunders that most creative companies unwittingly make that limit them.

Blair: Thinking that they can fake deep expertise across an impractically wide area. Thinking that they are in the service business. Thinking that they cannot let an opportunity pass them by. Thinking that they can win business by compromising their principles then somehow fixing it later. Thinking that their firm is somehow exempt from the laws of supply and demand economics. Thinking that they’re not really in it for the money.

Eric: Are there any marketing catch-phrases and terms used by designers that you’d like to see bombed to Oblivion?

Blair: I hate the word ‘branding’ as a claim of expertise. An expert is someone who has a deeper knowledge of the subject than others trading in the area. I wonder if there’s even such thing as a branding expert. There are just too many people in it and very, very few that have meaningful knowledge that others do not. A designer claiming expertise in branding is like a fish claiming expertise in swimming. It’s not expertise; it’s the price of entry.

Eric: On the other hand–what, in your opinion, are the characteristics that the most successful creative companies embody?

Blair: The first one is focus. Focus is the foundation of business development success, of business success, and of pretty much any kind of success in life. You can argue this point but you might as well argue against gravity. After that it’s the ability to say no, the ability to get things done, and the willingness to push oneself beyond one’s comfort zone. For eighty percent of creative firms the quality of the creative product is not a significant factor in their business success.

Eric: I don’t know if you get this close to these organizations, but do you have an approximation for the kind of difference this typically makes in terms of profit? What kind of expectations can folks have by concentrating on these things more?

Blair: First, your cost of sale should drop to almost zero. Second, you should expect to win while charging more. Price elasticity, or the ability to command a price premium, is a function of the availability of substitutes. Again, Economics 101. The more alternatives the client sees to hiring your firm, the less ability you have to charge more. Your ability to control or impact the buying process also diminishes as the number of alternatives rises. Margin problems and buying process problems (specifically, the inability to control or affect the buying process) are really differentiation problems.

I look for my clients to bill over $150k in fees per full-time equivalent employee, with almost zero cost of sale. At $200k/head they are on their way to being Win Without Pitching Jedi Masters. You can extrapolate profit from there, but like other forms of success, other variables need to be considered. The achievable ideal to me is an 8-person firm doing $2 million in fees from a slowly-rotating base of 8-10 clients with the principal earning around $1 million. It’s rare but it happens and it’s beautiful. No generalist can pull that off.

Power, positioning, opportunity

Eric: In a recent email newsletter (which readers can subscribe to here) you discuss power and how to maintain it. Some might feel this to be controlling, but you present it quite sensibly. Can you share why you believe this to be so important for design companies?

Blair: Imagine that I hire you for a design project. I then put a gun to your head and say, “Alright, Eric. If I don’t get your absolute best work on this project, you are going to die. Now, tell me, Eric, what do you need from me to be able to guarantee that you will produce your highest quality product?” In that situation you would probably say you need control. You need to know that you will be allowed to approach the engagement the way you see fit. You need to know that I will make all the decision makers available to you whenever you need them, and you need to know that I will not hold back, nor will I try to impose on you my idea of how this engagement should work. So, if that’s what you need to do your best work, why would you be so willing to give it up and do the work without it?

Eric: What about those who will say that customers should have more say in the design direction? Are you perhaps crafting these sorts of notions to pander to your audience?

Blair: Controlling the engagement does not mean excluding the client, or being a hard-ass for the sake of power games. It’s as simple as saying, “I do this all the time, and here’s how it works. Follow me…” The best professionals control the engagement while letting the client or patient have their say. But in those engagements there is never any doubt about who is driving.

Eric: What positions do you think design firms could better occupy to differentiate themselves from their peers?

Blair: The only meaningful differentiator is depth of expertise. Pick an area, any area, just go deep. Consider going so deep that you transcend what you perceive to be the boundaries of the discipline of design.

Eric: Are there opportunities that you foresee on the horizon that designers should be taking note of? (If so, how should they go about doing so?)

Blair: Social media as a specialization has a short lifespan. Not because it’s going away, but because it’s rapidly becoming mainstream. Also, increasingly it’s better to be a mediocre designer who writes well than a good designer who doesn’t write.

Eric: If you could suggest only one thing that firms could do today to improve their operations, what would it be?

Blair: Narrow your focus, then start writing about it.

Eric: Should someone wish to enlist your services, how might they do so; and, what kind of budgets are associated with this work?

Blair: A full engagement starts at $15k for single-office firms of fewer than 30 people. But I also have online resources at for smaller firms that maybe cannot afford to hire me. The online platform is changing and expanding with a major site overhaul that goes live in September. I’m pretty excited about it. I also do seminars for organizations like the APDF and ReCourses in the US and the DBA in the UK. I’m planning to invade Australia soon and do more seminar work in continental Europe as well.

Eric: Every time I read one of your posts, I feel as though you’re saying things I know already, but sometimes fail to do. Perhaps like (I somewhat dread saying it) a “business coach” of sorts–but in a good way. Thanks for sharing your insights and for joining us here today!

Blair: My pleasure, Eric. There’s always room for you on the Gin & Tonic Deck at Win Without Pitching World HQ if you care to make the short nine-hour drive.

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