Just Say No!
[Editor's Note: Many years ago, I was a speaker at a Seattle direct marketing conference. I sat in on a session at which a young Bob Hacker presided. He was articulate and made a lot of sense. Back at a meeting of Direct Marketing Days New York program committee, I suggested Hacker be invited to speak. He became a regular at DMDNY and later at annual DMA conferences. He would always walk out of his session with pockets stuffed with business cards. Many of those inquiries were turned down for the reasons stated below. At the past DMA conference in San Diego, I saw Hacker in action—still very much at the top of his (and everybody else's) game. I'm delighted to welcome him as a guest columnist this week.]
There is a great deal of information out there on how advertising and direct agencies can generate more new business. We're not going to talk about that today. Instead, we're going to talk about growing your business faster by saying no to a new client.
I was founder, CEO and Big Game Hunter for HackerAgency (née The Hacker Group) from 1986 to 2002. During that time, we grew about 50 percent per year. One of the major reasons we could grow that fast is we knew when to pass on a piece of business.
To understand our rules, you need to understand our business model at the time. (This is no longer the HackerAgency business model. It's changed a lot in the last 12 years.)
- We were 100 percent direct marketing. Our singular focus was on creating and managing high-performance direct marketing programs.
- Ninety percent of our profit came from direct mail. If a prospective client wasn't a major mailer, they didn't become a client.
- We would only do programs where we could make our target gross margins. No loss leaders allowed, no matter what the brand or how cool the work might be to do.
- All our work was bid on a fixed-bid basis. If we burned too many hours on a job, it was our problem, not the client's.
By understanding our business model, the rules make more sense. You will have a different business model and that model will generate a different set of rules. Rules are important in the agency world because all agency people, me included, love to chase after shiny new things. The rules keep you from bringing in a shiny, new thing that can hurt or destroy your business.