Virtual agencies are a virtual reality
Published on 07/01/1996 under Potpourri
I got a letter recently from a small advertising firm offering to provide copywriting, newsletter development and other services to my agency's clients. And while I've received many such solicitations in the past, what made this one unusual was the attitude of the writer.
She opened by saying, "Our company may need your services from time to time. Perhaps sometimes you will need ours." And in the second paragraph, she continued, "We understand that you, too, provide similar offerings, but maybe not all or the same as these."
While the overall tone of this letter suggested the writer was relatively inexperienced and somewhat naive, her key points were right on target. In today's hardscrabble market, nobody can afford to keep extra people on staff just in case a client has need for the particular services those individuals can provide.
The margins are too thin and the risks too high.
But certainly young people are not the only ones to notice this trend.
Several years ago we landed a small business-to-business account in Dallas that really wanted the security and convenience of a local contact person. I called a super sharp guy named Jim Dale, who was running a one-man agency (Dale & Associates) out of a small office in Carrolton, Texas and asked if he was interested.
Now Jim is no rookie, having spent 3 years with Texas Instruments and more than ten years with large agencies, first with Bozell and later with Anderson Fischel Thompson (then a J. Walter Thompson company). He agreed to give it a shot, and we struggled mightily for a year or so to serve an unsophisticated client that had no idea how to work with an agency.
Finally, we gave up, but I couldn't help notice that Jim was always going ninety miles a minute from one of his client's projects to another, while my fully staffed agency was literally begging people for work. If the decision was up to Jim, he would have given this undesirable client the heave ho many months before I reluctantly agreed to do so.
The thought occurred to me more than once: he's only concerned about keeping himself gainfully and productively employed, while I am worried sick about keeping me and fourteen other people fully loaded. Something's wrong with this picture.
The May issue of BUSINESS MARKETING magazine has a front page article on downsizing and its effects on marketing personnel. Several people I know well, including Paul Sherrington, current chairman of the Business Marketing Association, and Carol Bocell, chairperson of last year's BMA annual conference, are featured as examples of prominent marketing communications managers who've recently lost their jobs, only to resurface quickly as virtual marcom agency practitioners.
Sherrington was a 23-year veteran with Atlanta-based Equifax Inc., and I'm sure he had no plans to start out on his own the same year he shouldered the considerable duties as BMA chairman. But he is quoted in the article as saying, "my skills are highly transportable. A week after leaving Equifax, I was developing a comprehensive marketing strategy for one client, writing an annual report for another and starting on some product sheets for a third."
Obviously, he had some notice the change was coming, but the point is that instead on looking for another position similar to the one he lost, he concentrated instead on selling the things he could do to people who needed services of that type.
It's not unlike my own experience twelve years ago when my job as director of marketing communications for Conoco Chemicals went away. After its acquisition by DuPont, pieces of my chemical group were sold or reorganized away from my involvement, forcing me to make some hard choices. Instead of looking for another full time position, I chose to sell part of my time to what was left of the company I had been serving and use the rest to solicit outside clients.
It worked very well for several years, until I succumbed to the siren song of "We'd be glad to give you more work, Bob, but how would you handle it?" So I hired six people, bought office furniture, equipment and signed a lease for office space. As Jay Leno said to Hugh Grant, "oh, brother, what were you thinking?"
For several years, however, my business was very successful and profitable because I utilized a "core group" staffing policy. I hired only as many people as necessary to organize and initiate the work. For six years, I didn't have an honest-to-goodness art director on staff, working instead with several of the many outstanding graphics firms in town.
It was a good plan, and I'm sorry now I didn't stick with it. But I kept having this nagging feeling in the back of my mind that my larger, more desirable clients were going to outgrow me, and I certainly didn't want that to happen.
As it turned out, most of them left anyway, and not for the reasons you might expect. The downside to this "growth" strategy is that getting caught with extra people is a very costly, painful lesson that I have now been taught on at least two occasions. Double ouch.
One person who was way out in front of this virtual agency trend is Ray White. After cutting his teeth with several large and mid-sized Houston ad agencies, Ray decided that small was indeed beautiful, and set up shop in a small house with one part-time employee to help answer phones and keep up with project details.
That was 8 years ago, and I have to admit, I didn't understand the attraction. On one occasion, I even tried to convince Ray to come join my company as president. He smiled and said he was very flattered, but chose to keep on doing what he was doing.
Because Ray understood that getting things done for clients has nothing to do with keeping a large staff of diverse talent under one roof. All you have to know is where to find them.