Agency owners - How to survive now in order to thrive later
NO ONE KNOWS HOW LONG THE CRISIS WILL LAST.
How can agencies survive now to thrive later?
The future is simply so uncertain.
Few organizations and people have escaped major harm from the global COVID-19 crisis, and the marketing communications industry is no exception, to say the least.
Here’s the situation for nearly all U.S. marketing communications and PR agencies: Many clients put work “on hold” or terminated accounts, new business pipelines have taken serious hits and entire specialties such as travel and hospitality have vaporized, leaving many firms in a precarious position with their employees worried, let go or furloughed. Clearly the uncertainty levels are off the charts.
Assuming that most PR, marketing and public affairs firms have applied for federal, state and local government benefits, hopefully those firms are in the process of experiencing at least some temporary relief.
But is this “relief” the eye of a hurricane? What happens when temporary, capped government safety nets break loose or otherwise expire, with stimulus funds long since spent? What if COVID-19 sticks around longer than anyone fears or comes raging back if states open for business too soon? No one anywhere really knows when or how or if the crises ends... and what that future new normal looks like. What now?
Thoughts on what you can be doing now so that you're better prepared for whatever comes next.
For the majority of communications consulting firm owners and managers surviving today in a “pause” or slow mode, creeping along and uncertain of the future, we offer six broad recommendations for what to do while we’re still all mostly locked down:
1. Reaffirm Your Vision and Mission: Be clear about keeping your firm’s Vision and Mission, or evolving them. Double-down on your commitment to achieve your Vision (if you don’t have one, you need one, and that’s another matter). Gather your ownership group or investors to “lock arms” and seek additional financial support as needed if your entrepreneurial resolve and belief in your brand remain steadfast.
2. Scenario Planning: If somehow you haven’t yet created any form of scenario planning, you’re way overdue, so get on it. What actions can you map out now to take as you confront best-case, realistic-case and worst-case business scenarios? Get granular with your planning. Develop detailed P&L projections and cash flow forecasts incorporating different levels of revenue reduction and cost reduction actions to ensure you maintain an adequate profit and cash cushion to the extent possible. Update your plans on a regular basis to ensure they apply to your scenarios unfolding in real time. Make sure you include the trigger points and timelines to enact your plan and what level of margin and cash you feel comfortable with as a floor. You need to seriously stress test your business right now and take quick and decisive action. If you have already taken these steps, hopefully they’re enough to see you through. Continue to monitor your “vitals” to gauge whether and when to take further actions to keep your business going.
3. Stay close to your counselors: Especially your accountant, banker, lawyer and HR director (if you have one) to keep you apprised of evolving, time-sensitive benefits from federal, state and municipal governments.
4. Client and prospect relations: Maintain strong contact with all of your current clients and prospects.
Enhance your relationships with your core client base. Schedule regular calls or video chats instead of relying only on email. Spend more time thinking, thinking, thinking about client needs.
Try to engage clients in discussions about their biggest problems. Whatever happens, organizations still need to pursue objectives and communicate, which is what we do better than anyone else.
Insist that your teams stay on their toes to present options and ideas on the fly, or with quick turnaround. Good ideas tend to attract budgets. Don’t send clients shallow recommendations or pitches. Listen carefully to client problems and provide timely and appropriate solutions. Above all, if “now’s not a good time,” by all means respect the tenor in any relationship.
5. Maintain your core teams: No matter what happens following the expiration of the CARES Act payroll support, agencies should do everything they can to maintain their core teams and avoid layoffs as much as possible. Try to limit the need for further reductions down the road. However, do not indicate that “This will be our only reduction-in-force” as it’s far too volatile a time. Skip the edicts, pronouncements, guarantees and representations about no layoffs. It’s possible you may need to go back and take further actions to keep your business operating.
6. Prepare for “New Life”: Look at the situation right now as if it were Winter. It’s bitter cold and nothing’s growing. People stay mostly inside. However, Spring is coming and then Summer, we hope! And winners will prepare accordingly. No one should be sitting on his or her hands.
When Spring comes, the agencies that are prepared with effective marketing messages and other outreach will rebuild faster. Be coiled with strategic marketing energy when the crisis lifts to keep the agency in the most competitive position possible. You can:
Begin the rebuilding process with low-cost or no-cost planning and content creation. Create new design and content to update your website. Of course, hold off on execution until the climate improves for your business.
Assemble a small team to meet weekly or more frequently as needed to assess the situation and update your forecasts and plans. Provide staff updates as needed to ensure transparency.
Examine and develop new service areas to deliver to your clients that may have significant relevance when the weather improves. Categories such as data, digital transformation, revision to client’s customer mapping and personas impacted by COVID-19, employee engagement or CSR are offerings that existing clients and new prospects may seek. Challenge your team to develop these missing pieces in your portfolio.
Consider transcending from only providing communications counsel to contributing increasingly to client discussions about supply chains, employee engagement, new sales and delivery approaches and sustainability. Evolve your firm to that of a true strategic partner.
Now may be a good time to invest in online training for key staff.
Begin to discuss how your business will operate differently and more effectively post pandemic. What lessons have you learned from the current way you are operating that may be beneficial to continue? Crises tend to spur innovation.
No magic wand exists to make all our business troubles go away amid all the uncertainties of COVID-19. We hope the above suggestions build upon the current actions you’re taking.
Your goal as marketing communications and PR firm owners and managers: Survive Now. Thrive Later.
We're here to help.
JOHN J. SENG, SENIOR COUNSELOR
John brings 22 years of entrepreneurial savvy and more than 40 years of PR expertise to our clients. An agency veteran, his expertise includes counsel on client service, management, and branding. He founded and sold two health care PR firms: Spectrum Science Communications and GLOBALHealthPR. Now he serves on the Board of the Visitors of University of Maryland’s Philip Merrill College of Journalism. In 2015, he was elected to the Arthur W. Page Society of Communications Counselors.
BRUCE BISHOP, SENIOR COUNSELOR
With over 30 years of financial management and acquisition experience in the marketing communications industry working with several holding companies, Bruce has partnered with various industry leaders and CEOs in managing businesses to drive growth. He has executed and integrated numerous acquisitions over this period, implemented effective incentive and performance management plans and has helped achieve key business metrics to improve profitability, enhance margins and increase overall firm value. Bruce is a graduate of Holy Cross College and has an MBA in Finance from Fordham University.
Why Prosper Group exists.
Prosper Group exists to help the owners of independent marketing communications agencies achieve their life ambitions and maximize the value of their lives’ work.
Our team of former agency leaders and owners focus their deep experience on implementing proven proprietary methodologies across our three practices of agency performance, owner exit planning and M&A transactions in order to drive owner and agency success.
Developed by John Seng/Senior Counselor