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Positioning Your Agency to be Less Interchangeable in the Marketplace

Even though firms like yours know the value and the process of powerful positioning, since that’s what they do for clients every day, they either can’t bring themselves to do it or they do it and don’t see the results they’re looking for. Yes, there is an art and science, but there are also human dynamics that make change easier said than done. How democratic should the process be? Can we craft a horizontal one so that we don’t get bored? What do we do with all the work we’re proud of that might not fit?

Come learn the three non-negotiables, how growth relates to positioning, the wide and narrow markers you’ll need to work within, the advantages of horizontal vs. vertical, and how to test your positioning. Best of all, get a quick gut check on your ideas in the live Q/A to follow.

David C. Baker will be leading this webinar. David is an author, speaker, and advisor to creative experts. Through ReCourses, he helps principals build better businesses.

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Transcript

Mark:
Hello, everybody, and welcome to this Newfangled webinar on “Positioning your Agency to be Less Interchangeable in the Marketplace.” This is a very exciting webinar for us, particularly me because I don’t have to do any work. We’ve got David Baker from ReCourses who’s going to be really delivering all the content for this webinar. Many of you, if not most all of you, are very familiar with who David is and what ReCourses does, but David’s been a key consultant in the agency space really around the world for the better part of the past 20 years. He’s done so many things for me personally, for Newfangled, and for every shared client we’ve ever had, which are very, very, very many.

I know that from my perspective, and I know that a lot of other agency owners agree, that we simply wouldn’t be in business without the advice that we got directly from David, oftentimes in many doses over many years. Sometimes it takes years to implement his advice, but in any case, he’s a real visionary in this space, and not only individual agencies owe their success to him, but the field in general owes a lot of success to him; he’s brought a lot of much, much, much needed really corporate rigor into the agency space. There are a lot of amazingly well-run businesses out there because of David’s advice. He really is the foremost voice as far as I know on the planet when it comes to positioning marketing services firms. There’s nobody who’s got more of a command of the material. There’s nobody who has had anywhere close to as much influence over as many agencies in this regard, among others, as David, so we’re just thrilled to have him as a guest. We’ve got a huge crowd, record-setting webinar for Newfangled.

Not for David. These numbers, he referred to our registration numbers as “child’s play” last week. We had over 300 registered, which is great for us. We usually have between 200 and 300, but we actually broke the 300 mark, and this is a record-setting webinar for us. David, it’s just great to have you here. Thanks a lot for agreeing to do this. Basically, the floor is yours. If you don’t mind, I’ll interrupt here and there as I have questions. I’m also going to be fielding Q&A, so everybody, as you have a question, since there are two of us, I can actually just watch the Q&A panel. Ask the question as soon as you have it, and I’ll just go ahead and interrupt David if it’s appropriate and pepper questions throughout this. We’re also going to leave plenty of room for Q&A at the end. The entire webinar will probably be around 45 minutes or so including Q&A. David, thanks so much for joining us.

David:
Thank you. Thank you, Mark. I’m thinking after that introduction, it’d be best just to not say anything and just leave people with that impression. It’s downhill from here. Thank you very much. I’ve really appreciated the partnership with you guys over the last 20-plus years and appreciate the opportunity to talk to your audience about this. It’s always fun just to take some time out of the day. I finished preparing for this last week, and then I was on a long drive yesterday, and it was just fun thinking through this and then re-editing it this morning and paring it down to just the absolute basic stuff. This is new to me in a sense that I want to do a webinar … I wanted to do a webinar that is as basic as possible. By basic, I don’t mean not interesting or not advanced; I mean more simplified. I tried to do that because I don’t want to overwhelm our minds with this stuff, but also because, like you said, we want to leave some time for Q&A. Let’s just dive in here. There aren’t a lot of slides.

The first slide is just about what’s happening, what’s happening in your firm. You understand positioning, right? We chuckle about this a lot. You do, I do, we do together because this is what you do for a living. It’s what you do for your clients. It’s odd that it’s something that you struggle with in doing for yourself. The problem isn’t that you don’t understand positioning because you clearly understand positioning well, and I hear you talking about the positioning work that you’re doing for your clients, and it’s really good work. Then it stumbles when you’re doing it for yourself. It’s sort of like why surgeons don’t operate on themselves besides they’d be out and it might cut something wrong.

What’s really happening, so it’s not that you don’t know what’s going on. What’s happening is that you’re inside your own jar, and you can’t read the label. You can do a better job of positioning other agencies because it’s not you. What I’m trying to do is to help you see what your firm looks like on the outside so that then you can be a little bit more objective and fight through some of the resistance and the pain as you move forward.

One of the things that occurs in many firms that may not be true in your firm, but in most firms, it’s true at least in the beginning as they are at this juncture of moving from an un-positioned or a generalist firm to a more positioned firm is that they’re nervous about how their employees might react. If the decision were up to them, they might choose something different. In fact, when you look at the delta between the average principal and the average employee at the firm, it’s usually 10 or 12 years, and that’s true … That gap remains true all along. As you age, you give up a little bit on this dream of wanting to explore things all the time in new ways, and you fall in love with competence. The people that are working with you on staff are still in it … They’re in a different place than you, and you realize that, and so it’s hard to make some of the pure decisions that you otherwise might.

Making money and doing effective work isn’t your drug of choice quite yet. I find that when people taste competence in their work life, they just never want to go back because they’ve tasted both. We’ve all tasted both. Like, we’ve tasted competence in front of a crowd or writing an article or in an conference room, and then we’ve also tasted that terror that comes when we don’t really know what we’re talking about. That’s the difference between a firm that is positioned and one that isn’t.

How does this typically unfold at your firm if you decide to take this journey? Here, I want to step back from some of the specifics and say that the process itself, the process of going through a positioning exercise for yourself internally, you know, even if you don’t have any outside help, that’s fine, the process itself is really useful. Even if you don’t end up with a great compelling positioning because the process helps you get closer to the truth. I view it as like flying a helicopter and you’re looking for a place to land, and you keep circling closer and closer, and you finally get to a place where, “Ah, it’s safe to set this craft down.” When you go through a positioning exercise, this may not be the landing flight, but it may get you closer to that landing pad. The result may not be as compelling. It may only be 20% of what it needs to be, but it’s still useful because it starts getting people used to the idea, accustomed to the idea, that things are going to be a little bit different here.

It must be led at the top. Again, this is under the whole context of how this unfolds. It must be led at the top. By that, I mean specifically that you cannot delegate this is other people. That’s like saying, “Hey, I really want to get married. I don’t have time for this dating nonsense. Can somebody else do all that work for me and then just introduce me to the person I should marry?” That’s not how it works, and that’s not how positioning works either; it must be led at the top. You do want to socialize the non-terrifying parts of it. By non-terrifying I mean that if you’re having a really wide open, blue sky discussion internally and it’s not terrifying to you because you realize that, “Hey, I’m not going to make any decision that I don’t like because I’m the principal, and also we’re just brainstorming here,” they’re not going to hear it the same way. You have to be careful. It’s good to have anybody in there who needs that socialization process as long as it’s not terrifying to them, and while it needs to be socialized, it should not be a democratic decision. It needs to be led at the top.

The democratic positioning that happens at some firms, if it happens at all, it takes place over 6-10 years. You’ll knock the rough edges that create a really great firm off it if you don’t lead at the top, and it also takes way too long, many, many, many, many years. All right, now I’m going to step back for a second, away from the process, and away from what it looks like at your firm just to talk for a second about the 3 non-violables, and I had to look that up because I wasn’t even sure if that was a phrase, but apparently it is.

3, 3 slides here. The first non-violable, and this comes from a book I’m writing on this positioning, and I’m writing it very slowly and very thoughtfully. These are the first 3 chapters because I think these 3 things are the 3 things that must always be the foundation that we build all of this from.

Okay, so let me start by saying this, that insight comes from focus. Okay, so you’ve sat down and you’ve tried to write an article of some kind. You’ve tried to develop content. I’m using the word “insight,” but maybe it’s content, and you’re not sure what to say. You publish it, and it just seems like you’re contributing to the crap that’s out there, like you go back to LinkedIn and just in a couple of hours since you last checked in on LinkedIn, you know, there’s another 30 articles from your connections, and most of them are not even worth reading. You know, you read your stuff, and you say, “Where is this coming from?” That insight, the difference between content and insight, that great insight comes from focus. A positioned firm has hundreds of things they can write about at any given point because they’ve seen deeply inside situations in ways that other firms have not seen. There’s automatically-differentiated insight, which is what you build a price premium on, it’s what you build your marketing plan on, and so on. Insight comes from focus.

Now, where does focus come from? Where does focus come from? Focus comes from positioning. Let me turn these around, flip these around, and talk about them in a slightly different way. Insight comes from focus. Focus comes from positioning. Flip them around now. Positioning is what allows focus, if you decide. So we take Mark’s firm, for instance. Mark’s firm works exclusively with agencies like yours, helping them with lead generation systems to help them get the kind of business they need to build a great agency on. All right. Because he focuses on that, this positioning allows him to focus. It allows him to just look at 100 agencies over a couple-year period. That positioning allows him to focus. The focus is what leads to insight. Okay, so this is the first non-violable. Insight comes from focus; focus comes from positioning. You can see where I’m headed with this.

If we pull this apart a little bit, if you’re not positioned, you’re not focused. You don’t have the opportunity to see similar patterns. If you don’t have the opportunity to see similar patterns, you’ll never be able to develop the kind of insight that really sets you apart. That’s the first non-violable.

The second one is that good positioning keeps you from being interchangeable, so to speak. The best way to think about this is distributed control. It’s something that just hit me on a long drive one time, so let me just explain it briefly to you. I don’t think this is true for personal relationships, but in business relationships, the best ones have distributed control. By that, I mean that you as the agency have some control in the relationship, and the client has some control. Now, you experience that exercised control from the client in many ways all the time. It could be little ways like they’re not available and so they want you to move the deadline up and make up that time. Or, maybe they dribbled to you rather than giving it to you when you need. Or, maybe they fight a price. You know, the worst case is they just decide to fire you.

Okay, so their ways of exercising control are very clear. What ways do you have of exercising control? This is what we don’t typically think about. While they have many ways of exercising control, you as the agency only have one way of exercising control, and that’s to withhold your expertise. Just work with me for a second and pretend that you’re going to withhold your expertise. You’re not being mean; it’s just that there’s a respect issue, and it just feels that you shouldn’t work together, so you withhold your expertise. That’s when the clock starts. Tick, tick, tick. The clock starts.

The clock doesn’t stop until the client that you used to work with finds what they deem to be a suitable substitute, not what you think is a suitable substitute. You may hear about who they’re working with next, and you say, “What? They can’t do the kind of work we did,” but it doesn’t matter what you think. What matters is what they think. How long will it take them to find a suitable substitute for you? Because if it’s very easy to find a suitable substitute, then there’s no power behind withholding your expertise. Pretend that that’s true, that you’ve got a client that’s exhibiting bad client behavior right now. Picture who this is. You’re looking at each other, and you all know around the speaker phone exactly who that is.

Now, pretend that you decide that you’re not going to live with this bad client behavior anymore, and you’re going to gently, respectfully resign the account. You’re withholding your expertise, essentially. How long will it take that client to find a new lackey agency to do their work for them? That, friends, is exactly how interchangeable you are. This is the second one. Good positioning is trying to keep you from being interchangeable.

Third, you’ll benefit from deeper confidence or from greater opportunity, take your pick. As you sit back and you’re looking at the other agencies out there that are famous, you don’t know anybody there, but they’re famous, or it may be another firm that you’re pretty familiar with, and you’re looking to them as examples. Like, well, “What if we did what they do?” Or, “How successful have they been?” Or, “You know what, they’re not even positioned well at all, and they seem to be thriving.” That’s absolutely true. There are a lot of agencies out there that are thriving, more than there ever have been, who are very poorly positioned. Why is that?

Well, if they’re bigger than 40, 45 people, then they’re actually positioned as a full-service agency, and they don’t have to talk about it, and there aren’t that many of those, and so they have a smaller marketplace to play in, and they have some power in that marketplace. Otherwise, they just have a lot of confidence. That translates into their selling, it translates into their pricing, it translates into what they say “no” to, and so on. If you are really, really confident, you can probably get away without being that well positioned. I’m not a fan of that level of incompetence, but you could do it. A lot of firms do.

Absent that, if that’s not an option for you, then what you’re going to need is more opportunity, so pretend that you’ve got this pie that represents all the work that you’re doing. All of a sudden, there’s a slice gone from the pie because one of your clients leaves you. You have 2 pieces of pie that could fit and slide into that slice, that hole. One of them is a qualified client, and one of them is an unqualified client. It doesn’t take much confidence to choose the qualified client to work with. That’s an example of how opportunity comes from great positioning because it gives you more opportunity. Unless you’re deeply confident or a huge firm, you’re going to have to be positioned. The smaller your firm, the more important positioning is, because for a prospect to think about working with you, a smaller firm, it’s a big risk. You don’t have the deep bench that gives them the confidence that they can defend this decision if it goes well. Think about that.

Now, we’re almost done with a lot of the content, and then you’ll hopefully throw me some really tough questions. I’m hoping that Mark will answer some of the tough ones for me, but if you have questions as we go through here, go ahead and type them in, and Mark will be sorting through those and deciding which ones are most helpful for the group. Let’s talk about horizontal positioning, and this is the fun choice. Fun in the sense that 87%, 88% of agencies, when they’re given a choice, would always prefer horizontal positioning. Let’s talk about that, what that means, and then we’ll talk about the flip-side of it.

The reason this is so appealing to agencies is because of the variety. In other words, they’re working across all kinds of industries doing … They’re either targeting a demographic, or they’re playing around in one particular service area, or they’re working with companies that are just growing or ones that are facing disruption, or whatever. They’re across all these industries, and what you like about that, typically, is that it gives you a lot more variety. You’re also thinking a lot about how your staff will react to that option.

Next, it allows you to work for very large companies, presumably more qualified companies, who already have an AOR. That AOR, that agency of record, is not threatened by your presence. If you’re doing marketing to millennials or marketing to women, or whatever, you could do some really juicy project for Coca-Cola, for instance. Nobody assumes you’re going to be the AOR for Coca-Cola, and the AOR for Coca-Cola is not going to be threatened by your presence, but you can work for larger Fortune 1,000 companies who don’t have a problem assembling a roster of 15 agencies. That’s the second advantage here.

A third advantage is that you’re more immune to an economic downturn. If you have to be focusing in an industry that faces a downturn, then you’ll be a little more protected because that’s only very small part of your portfolio. I think this is a straw man argument, honestly, because even in the most impacted vertical segments, there’s always enough work for the very best firms. This is something that comes into play, especially if you’ve been burned by focusing in an industry, a vertical, that had a hit to it. Fewer conflicts of interest. Cough, cough here because I’m not sure this is really an issue, either. I work with hundreds of agencies, and every once in a while somebody asks me about that. It doesn’t seem to be an issue. Mark, have you faced this issue as you’ve played in the same space that I have? How does that work for you?

Mark:
Yeah, this comes up all the time. There’s that quote that we discussed earlier that I’ve heard Tim Williams use, and David, maybe you thought it was from David Ogilvy, but the idea that having 2 clients in the same space is a conflict of interest, but 3 clients in the same space is actually an area of expertise.

David:
Yeah.

Mark:
It’s funny. You and I both get a lot of push-back on this. I think what I’ve found and what I think is going on psychologically is that when agency, particularly agency principals, typically, do push back on this, they want to believe it. Like, they want to believe everything you’re saying.

David:
Right.

Mark:
I’ve found that if there are good enough answers like that, they’re pretty ready to accept them. They just need a little bit of help making that leap of faith is what I’ve seen.

David:
Yep. Yep. Then of course the more upstream you are in the work that you’re doing for clients, then the more this would be an issue, but with a lot of firms, they’re not doing this deep, million-dollar strategic plans.

Mark:
Right, right.

David:
Okay, good. All right, so those are the 4 advantages of the more fun positioning possibility of an horizontal expertise. Vertical expertise. If that’s the fun one, this is the easy one. While upper 80% of agencies prefer a horizontal expertise because of the variety, the vast majority of those default to a vertical because they can’t find their clients. That is the primary advantage of a vertical focus. It’s really easy to find your clients. We’ll talk a little bit about how to test this in a few minutes, but if you’re struggling to find your … Let’s say that you’re a classic identity firm, and so you want to work … You want to find large prospective clients right before they’re considering an identity versus reading about it in Adweek or something. You can’t buy a list of companies thinking about that. I mean, there are certain moments when they might be more interested in that, like after a merger or some massive acquisition or some controversy where they need to rebrand or whatever, but generally you can’t. This is the primary advantage.

It will always be the primary advantage of vertical positioning, is finding your clients. It’s very easy. Next is the client contacts. When they leave, they tend to go to another company within the same vertical. They don’t typically go to another company in the same horizontal. Like if you’re focusing just on companies that need heavy rebranding, that’s a horizontal focus. They’re not going to go to another company that needs that. They’re going to go to another financial services company if that’s where they were, and that new company they go to isn’t necessarily in that rebranding mode. Client contacts tends … The best agencies follow their best contacts twice, so they’re working at 3 different companies with them very well.

The fact that CMOs are changing jobs more frequently than they were 10 years ago, not as frequently as they were 2 years ago, but more frequently than they were 10 years ago, helps your marketing plan or your no-marketing plan because if that is your marketing plan to just follow your clients from one place to the next, then if you’re vertically positioned, it’s much easier to make … more successful.

Third is that prospects and clients gather around the same water coolers. Almost every industry conference is vertical. Now, there are some horizontal conferences that are very powerful, and there are masses. For instance, like TED or Dreamforce. Those are horizontal industry conferences. There, you’re getting people who are mixing from different industries who might spread the word about you, but generally, most gatherings, most blogs, most publications, and so on are gathered around vertical, and so that more natural propagation of your work happens around a vertical positioning.

Then finally, it’s easier to close and then … Vertical positioning is more highly compensated. It’s not always true. There are 6 or 7 exceptions to that, but generally vertical positioning is more highly compensated.

Mark:
Hey, David?

David:
Yes.

Mark:
There seems to be a little bit of confusion about what you actually mean by vertical versus horizontal. If you could just clarify that one more time, that’d be great.

David:
Sure. Vertical positioning is around what you used to call an SIC code. Now it’s NCAIS code, so financial services or tech or healthcare, so some specific industry that would be identified by an SIC or an NCAIS code. A horizontal spans industrial verticals, and it’s doing something around a demographic like Hispanic marketing or marketing to boomers, or it could be marketing a particular service offering, like identity work we talked about or investor relations. It’s across all verticals focused around a demographic or a particular thing that you’re doing. ReCourses is a vertically-positioned firm around a specific industry segment. Okay?

All right, now, last slide before we get to as many questions as we have time for, is testing your positioning internally. You’re going to come up, you’re going to go through this exercise if you want, and you’ll come up with a bunch of options. These are the ways you back-test the options. Okay, there’s, I don’t know, 7, 8, or 9 of these things on here. Can you buy a list? It doesn’t matter if you buy a list. In many cases, you don’t need to buy a list. If you can’t buy a list, it is not a viable positioning, period. There aren’t any exceptions to that. Because if no lists exist, then these prospects don’t share enough pain that somebody else has figured out how to make money off of it. If they don’t share enough pain, then it’s not a focus. Then they don’t think they need somebody to work with them who understands their pain deeply. Can you buy a list, whether you need to or not? Buying a list is a whole other issue that should be a part of your marketing plan, but we’re not really talking about that today. Can you buy a list?

Next is are there between 10 and 200 competitors. This is quite that mathematical. If there’s 9 or 201, it doesn’t mean it’s not going to work. It’s more of a range. If there are fewer than 10 competitors, then either you’re one of the first, the smartest people in the world, which is possible, or a lot of people have thought about it and decided, “Eh, this isn’t viable.” Then if you have more than 200, then you need to go further because it’ll be too easy to replace you. That’s back to this interchangeability idea. If there’s more than 200, it’s too easy to replace you.

Next, and this overlays on that, are there between 2,000 and 10,000 prospects. If you say, “We want to do identity work,” well, how many prospects are there? There’s millions of those, so that’s not a viable positioning. It has to be much more focused than that, right? “We want to do admissions work for private colleges.” Oh, okay, so that fits within this. It fits within 10-200; it fits within 2,000-10,000, so that works. That’s how we think about how those two overlap.

Will it enable a price premium? Can you charge more than another competitor that isn’t focused the way you are? You’re going head-to-head in a competition and your price is higher, do they still choose you because of your focus? That’s what I mean by enabling a price premium.

Direct relationships. Are you directing the relationships on your terms? If I go into an agency and I have them describe their relationships like, “These people are following this process because they want us to do it that way, and they want us to invoice them on these terms, and they want us to work with this kind of person.” If all the client relationships looks different, you are not an expert. That’s another way to test it.

Your location doesn’t matter. If your location matters … There’s only about 6 specializations where location matters. The vast majority of them, it doesn’t matter at all. If you could make your specialization work in Green Bay, Wisconsin, then it probably is an expert position, as long as most of your work is widespread so these fit together. You don’t want to count on local clients. Can your agency be anywhere, and can you work on clients anywhere? That’s the ultimate geographic test of positioning.

There’s no confusion to the prospect on your site. You can’t have a positioning that looks really good in an email a prospect gets, and then they come to your website, and it looks like they kind of got baited and switched on, and that you’re really not a positioned firm. You just sent them a particular targeted email. That doesn’t work. What happens there is you get discouraged because it doesn’t work, and it didn’t work not because the idea was bad about that positioning; it didn’t work because you didn’t give it a fair test on your website.

Minimum, it should last 5 years. Ideally, 10-plus years. Okay, Mark, there we go. There’s an experiment in a short webinar.

Mark:
That sure is. 30 minutes, just about on the dot. All right, that was a quite dense 30 minutes, so we will get to questions in a moment. If any of you have questions you’ve been sitting on, please post them in the Q&A. Many of you did a great job of posting them as you thought of them, and hopefully we’ll be able to get to all of those. One point, maybe a few points, that I wanted to mention, David, that I just jotted down here as you were talking.

David:
Yep.

Mark:
When you were talking about the 3 non-violables … That’s a great word, by the way. Yeah, I’d like to be able to work that into something … this idea of the interplay between positioning, focus, and insight. I love that. That first slide there was a bit of a twister. There’s a lot there to think about. It’s permanently cyclical, right? One thing leads to another, forever, right?

David:
Yeah.

Mark:
Like, there’s no end to that. That’s one thing we’ve observed through a lot of the firms that you’ve worked with, is that when they work with you, they commit to some level of positioning, and then 2 years later or 4 years later, 6 years later, they get deeper and deeper and deeper and deeper. It seems like the nature of positioning, once you take the really bold first step of going down that path, you’re never going to stop because of this cycle of positioning, focus, and insight. You take a step deeper into a territory, you see things you didn’t see before because of the pattern-matching you’re talking about.

David:
Yeah.

Mark:
You see opportunities you didn’t see before, so you take the next step into that territory, and that goes on and on and on and on, until a lot of the clients you’ve worked with, they end up in a very lonely place where there really aren’t very many competitors out there, but they own it, and they have incredible leverage in the buy-sell cycle.

David:
Yeah, absolutely. I mean, you can see this with the history of your firm over the last 25 years, right?

Mark:
Yeah.

David:
Generalist firm focusing on doing certain things, and now you’ve hit your sweet spot over the last 4 or 5 years that’s like, “Oh my god,” … Blair Enns of “Win Without Pitching” talks about how you just create this competitive distance so quickly, and you go into a room not even knowing what’s going to be in there, and there’s another 10 doors in the room that you can explore things with.

Mark:
Yeah, yeah. It’s thrilling. That’s the thing. The organizations you and I both work with, they’re entrepreneurial organizations. We get to work with oftentimes the owners, in most cases, and the thing that so many entrepreneurial organizations don’t understand is the freedom they have.

David:
Yeah.

Mark:
When you talk about creativity, and actually Shannon from “Win Without Pitching” is on the webinar. She had a great question that we’ll get to in a moment about creativity specifically, but when we think about creativity, well, what is that? Is creativity being able to like do a great print ad? Is that really the height of creativity? Or, is creativity being able to bravely run an amazing company that’s doing something no one else has ever thought of doing? The confines of creativity are so much broader and maybe non-existent as opposed to how people think of it.

David:
Yeah.

Mark:
That’s really interesting to me. Yeah, so that, just a few points there. Let’s get to some questions. There are a lot, so thank you, all, for asking these questions. Let’s start with Shannon’s, as I mentioned. This comes up all the time, all the time. I thank you for asking this, Shannon. She asks, “Do you think focus leads to your creative work suffering?” Her subpoint is, “Is it a case of diminished artistic discovery because of narrow focus?” I know you’ve heard this 10,000 times, and I can’t wait to hear your answer.

David:
I think your artistic ability does suffer for sure because I think of artistic ability as largely … Maybe you’re working in a particular medium. You’re really starting with a blank canvas each time. When you’re in love with incompetence, then you love a blank canvas every time. Basically each new client is more of a victim than anything. They’re funding the arts on your behalf.

I think business creativity, which isn’t art … Business creativity doesn’t start with a blank canvas. It starts with a very specific process that is more likely to end with the result that achieves something for a client. I don’t think there’s room for hardly any art in business. I think that should be done outside of business. I do think there’s lots of room for creativity, but creativity is enhanced by structure. It’s wild, wide open blank spaces creativity is usually useless creativity from a business standpoint.

Mark:
Yep, yeah. Perfect. I completely agree. Shannon, I know you’re asking that because you’ve heard that a thousand times, and you and Blair and everyone else at Win Without Pitching also help a lot of firms with this, and your effort to improve them as a sales organization. If you have any counterparts or additional questions on that based on David’s answer, let us know.

Chris from the UK has a couple of great questions. One that I think is important to point out here, he is asking first, “Did I understand that once you are bigger than, say, 50 people, you don’t need to worry about positioning?” Is that the point you intend to make there, David?

David:
You don’t … It’s not the first line of defense like it is for a smaller firm. Your positioning automatically becomes a full-service agency in almost every case if you’re 50 or above, 40-50 or above. You still have to be positioned in the sense that every prospect is going to care about category experience to some degree. You have to be positioned, but it’s not the same positioning decision. Every large firm is positioned as a big enough firm to do the kind of work that all the smaller firms can’t do, and so they don’t necessarily have to talk about it, so we think they’re un-positioned, when, in fact, they are positioned as a large firm.

Mark:
Yep, perfect. That makes a lot of sense. I think that a very fundamental underlying point here is, from our perspective, now Newfangled is a digital marketing consultancy for marketing services firms exclusively, and so from our perspective, if you want to be able to market yourself, it doesn’t really matter how big you are, but if you have the desire to market yourself, you have to have some angle on the marketplace. You have to be positioned in some way …

David:
Yep.

Mark:
… in order for that to work in any way at all. There’s no chance of marketing. David, you said this earlier, but just to reiterate, there’s no chance of being able to successfully market yourself, to have a successful marketing program, if you’re not positioned. Or, at least aren’t willing to deeply pursue a particular category. Okay, so let’s see. The next question here … This is just another good question and probably a pretty easy answer. “Can you have a blend of horizontal and vertical positioning? Does it have to be one or the other, or can it be both?”

David:
It can be both, for sure, and in fact, if you … I think of like vertical positioning and horizontal positioning together as almost like a target, like a bull’s eye. You’re unstoppable there. You might be focused on, say, credit unions vertical, and then social media for credit unions, or you might be focused on agencies like you are, doing lead generation for agencies. Yeah, the only danger there is narrowing your target so that there’s not enough opportunity. That would be lower than 2,000. You don’t ever want to assume in a professional service firm like an agency that you can lock up more than 1% of the market. 1% of 2,000 is 20 clients; that’s what you need all the time, 15-20 clients. As long as there’s still enough opportunity with that vertical and horizontal together, you’re fine.

Mark:
Yep, yeah, I completely agree on that. One point of clarification, Cavin … I think that’s how you pronounce your name, thank you for asking this … Cavin mentions, it says, “50 people’s a large agency. I understand 100 people, but 50? Where does this idea come from?” Just as a point of reference, and especially as it relates to positioning and marketing specifically, we were in New York a couple months ago, and over the course of about 30 hours, we met with 5 different firms, a 4-person firm, a 12-person firm, a probably 160-person firm, a 32-person firm, and a 2,200-person firm. Size is relative. You know, is 50 people a large agency or a tiny agency? It depends on who you’re asking. What I’m continually shocked by is it does not matter if you’re a 1-person shop in South Dakota or if you’re Omnicom’s biggest agency. If you want to be able to do this stuff, you’ve got to be positioned. Size really doesn’t matter at all in regard to marketing.

Now, the point that David was making earlier is that, as you get larger, positioning might not be your first line of defense, but size has nothing to do with your ability to market without positioning. Would you agree with that, David?

David:
I would change this one phrase there, and I would say that positioning is always important, like you said. The first line of positioning is your size if you’re a biggest agency. You need to be using that, so you would only typically work with clients that need all of your services, or you’re just a collection of small agencies. Large is the first line of defense for positioning if you’re big enough. That comes from studying 900 firms very, very closely.

Mark:
Oh, yeah, yeah, yeah, you’re just not making this stuff up, right? Exactly. Okay, here’s a question that we, and I know you, get all the time. “Can a firm have different, multiple points of focus?” Say, can an agency of 25 people specialize in 3-5 different things?

David:
They can, and a few agencies pull that off well. They’re the competent ones that also have a good sales presence. Generally, the argument is that unless the two are connected, let’s say 2 or maybe 3, are connected in the prospects mind, they have to be marketed separately. You can’t own a medical practice and a funeral home and have them on the same business card, essentially. There’s too much confusion in the marketplace, and it looks your positioning is purely accidental. What typically happens for a firm like that is that you leave your current agency just like it is, a big mix of lots of things, and you create this side agency. It’s not a separate legal entity; it’s just a DBA. You put all of your marketing effort into that because you haven’t been marketing in the past anyway, and you haven’t been positioned, and you’ve been pretty busy. All that is going to continue, but we’re doing is we’re continuing a side agency, and we’re just letting this one happen accidentally. That’s usually the best way to deal with that.

Mark:
Great. We’ve got a few people who are asking for examples. Can you name a few firms by name specifically who you believe are really, really well positioned?

David:
Well, I think Newfangled is a perfect example.

Mark:
Thanks.

David:
I think an example of a very good slightly wider vertical positioning for professional services would be Hinge Marketing. They don’t work with agencies that I know of but work with other professional services. You could look at currencymarketing.ca. I’ve written a lot about this on the website, and I’ve written a blog post on the advantages of vertical and the advantages of horizontal, and I give a lot of specific examples there along with clicks, links to their website. That’s probably the best way instead of me stumbling along here.

Mark:
Yeah, sure, no, no I think that makes a lot of sense. That’s helpful. Also, yeah, there are lots of firms. The Linus Group out of the Bay Area.

David:
Yep.

Mark:
Origin out of Canada. That’s origindesign.ca. Big Duck NYC, that’s a great example. Zehno.com, Z-E-H-N-O. There are, really, all of a sudden like a surprising number of these firms, again, due to the work you’ve done in the field, David, and I’ve found generally that … I don’t know, compared to 10 years ago, and I’d love to hear your opinion on this, compared to 10 years ago, it seems like firms are willing to be a little more bold. It seems like firms are willing to embrace positioning more than they were 5-10 years ago. Would you agree with that, or do you see more resistance?

David:
No, I agree, yeah. They are definitely more willing to, and I’m not sure that there’s more enlightenment around that; I think it’s more that the world has been Google-ized, and so now everybody else can serve their local market, everybody within a few seconds without paying a dime can find somebody that specializes in exactly what they need. They’ve been forced by the greater forces in the marketplace to specialize their work.

Mark:
Okay, yep. Yep, I’m with you on that. A question Travis asks is, “How does an agency deal with non-compete issues in a vertical position?” He insightfully asks, “Is this an imagined problem?” Which, I think he’s getting on the way to answering his own question there, “or this is a problem agencies in points of vertical focus are actually facing?”

David:
There are some agencies that are facing this. It is a legitimate concern in some cases. It’s not a huge issue in that it’s not widespread. I do develop those … they’re called conflict strategies. It comes from the phrase back in the 50s where the big holding companies created what was called conflict shops. We’re working for Kraft and now we can’t work P&G or something, so they created a conflict shop. Those conflict strategies I helped develop, but they actually are not that necessary in most cases. They, like you said earlier, Mark, about having 1, 2, 3, some clients are nervous about it, but most clients are terrified of incompetence, so whatever fears they have, they’re willing to put up with that because of the reputation the agency has because they’d rather work with someone who knows what they’re doing.

Mark:
Yeah, that’s the thing. I think expertise is the trump card. As soon as the client sees clearly that you know more about their industry than they do … not their business. You know, a lot of agencies pretend to know a lot about their client’s business specifically because they do 10 minutes of research before the meeting. It’s just like a human thing that people do. Because of this cycle of positioning and insight and focus and the pattern-matching and everything that happens over years and years and years of working with the same types of problems over and over again, you just see things they don’t. Once the client observes that, which is just oozing out of you. Your website’s full of it, your emails are full of it, as soon as you have a conversation on the phone, they realize that everything they saw on the website is just the tip of the iceberg, that you really are the expert, they drop the whole non-compete thing very, very, very quickly when they realized that they are missing out by not working with you because of your deep expertise in the category.

David:
Right. Right.

Mark:
Expertise is the trump card. You know, the difficult part, though, is for firms who are just getting into this, that they really don’t have the expertise yet. It’s a little bit of fake it till you make it. No one asked this question, but it’s something that comes up and that is a concern, what if you really don’t have anything yet, and you look back at your client roster, and you can’t really see? What do you do? How do you start on this journey? What are the first steps you take when the path isn’t clear?

David:
Well, you really don’t want to focus that if that honestly is truly new to you. It always has to emerge from something that you’ve done in the past, and typically, you can build a positioning around 2 or 3 good examples within the last 2 or 3 years, is plenty. Sometimes you have to rely on a new employee that’s just joined you that brings a particular expertise and they’re comfortable with you throwing their experience into yours.

What you don’t want to do is to sit down at a table and try to draw an inclusive circle around everything that you’ve done coming up with a positioning that omits all the hard choices because that’s not really positioning. Positioning is about saying no to most of the things you’ve done, not because it wasn’t good work, not because you didn’t enjoy it, not because you didn’t make money, but because it doesn’t fit the new positioning. That’s what’s really painful for entrepreneurs because they have just this gut instinct that I can’t say no to opportunity. That’s why positioning is so difficult for them.

The other thing you can do, too, is to look back over the work you’ve done, and you can recast it in new ways. It’s not a lie; it’s just simply seeing the work you did from a different perspective. Maybe you did work a bank. That’s the way it looks on the surface, but you look more deeply into it, and it’s like, “Oh, no, we were doing alignment work around their client base, and we happened to be doing it for a bank, but we could look at that work very differently,” so that’s another solution sometimes.

Mark:
Yeah, I love that. I love that. That’s great. It does require a lot of introspection. You know, I always, when people have asked me about this, I say, “Well, I want you to think about really who you want to be working with a year from now, and kind of let go of the past a little bit and understand what do you want to be.” Again, this idea of entrepreneurial freedom. Take more advantage of that. Marc with a C has a question. I don’t know if you’re going to be able to answer it, David. It’s a real stumper here. He asks, “Can I hire David Baker to help us with our positioning?”

David:
(Laughing) Yeah, actually, I have nothing to do, and I’m just hoping that this webinar will give me 1 new client. Yeah, no, actually, yeah. You could. You know, I guess the path to working together is sometimes 20 years, and sometimes it’s 2 weeks. If you’re ready to talk about that, I’ve just thrown 2 things up on the screen, the New Business Audit and the Total Business Review. Or, if you’re not ready for that, just sign up for the emails. You’ll get them every week or so. Hopefully it’d be insightful for you. I know Mark has an address too, so yeah, if he’d like to talk with you.

Mark:
Perfect, perfect, perfect. Genevieve responded on your behalf, actually, and she said to Mark that, “You have a great FAQ section on your site, on recourses.com, that describes your ideal client,” which is a brilliant move and one that should be emulated by all of your clients as well.

Let’s do one last question here. This is actually a great question and one I actually don’t hear very often. I wonder how often you hear it. Greg asks, “When repositioning our firm, how deeply do we have to go before we launch it?” He goes on to say, “Clearly, a complete wholly-consistent launch would be best, but are there ways to reposition in increments? The point being, it’s pretty difficult to expend so many resources on a non-client project.” How fully baked does this thing have to be before you actually post it up there on your site.

David:
Ah, it’s a great question, but before I answer that, can I point out that my straw matches my shirt? Can you see that?

Mark:
Wow, yeah. That’s-

David:
That’s pretty impressive. That is a really great question.

Mark:
It is.

David:
I would much rather you do what you hear people call an MVP, a minimally-viable product. I would much prefer they go that route. What I mean by that is make the tough decision; put a splash page up, a homepage up on your website that declares your positioning, gives your contact information, and gives people a way to sign up for your insight. That you can do in 1/2 day. Then don’t worry about all the rest of it. Build out all the functionality later, but don’t take 2 years to screw around with this and miss all kinds of brand-building for yourself. A 1-page website that’s clear and true is much better than 100-page shitty website. Don’t spend too much time. Just make a tough choice. Throw it up there, the MVP route, minimally-viable product, and then iterate on it later.

Mark:
That continues on and on and on throughout the whole marketing chain, from my perspective.

David:
Yep.

Mark:
You know, Blair talks all the time about not letting perfect be the enemy of great.

David:
Right, right.

Mark:
That’s it. Especially when considering what you and I were discussing about 20 minutes ago, which was the idea that once you do take the first few steps down this positioning path, you’re never going to stop.

David:
Right.

Mark:
Even if you do create this perfect thing, it’s going to change radically a year later.

David:
Yeah.

Mark:
Just get it out there. Go to market, go to market, and see what the response is. Be the entrepreneur you’re meant to be, right?

David:
Yeah.

Mark:
All right. This was awesome, David. Thank you so much. This webinar …

David:
Thank you.

Mark:
… has been record, and so David’s going to be able to distribute it how he’d like. We’re going to post it on our site once it’s all ready. Thank you for everyone who joined and for all the amazing questions. Just once again, I really appreciate it, and you need any sort of business management advice, David is the first and last call you need to make. ReCourses.com, David Baker. Thanks for this, thanks for everything, and I really enjoyed the opportunity to share this webinar with you.

David:
Thank you, Mark. I appreciate it.

Mark:
Okay, bye.

David:
Bye.