Are commercially aware teams the backbone to profitability?
We look at the impact of team commercial awareness, or lack of it, on agency profits.
We discuss this topic with two agency leaders. They share how they’ve created a more commercially focused agency by using data to drive commercial thinking across their teams and influence how everyone views their time and work.
Here’s what they had to say.
25 strong, London-based, digital experiences agency.
Peter McQueen, Finance Director
Peter was brought into Media Blaze with a clear mandate to raise the commercial focus of the agency as whole in order to drive profitability. In Peter’s words:
“Team commercial awareness makes a big difference to the daily decisions made at every level of the agency, particularly affecting the drive for profitability and growth.”
But Peter found this awareness was lacking in places and he started to unravel this by looking at over-servicing:
“Commercial awareness did not flow through all the departments of the agency as I'd have liked. We do have jobs that are over-serviced for various reasons. We've got really nice clients that we don't want to lose. It's that juggling act, isn't it?"
"Client services people naturally want to keep a client happy and don't want awkward conversations around additional costs."
"There are a number of things that I've done to make the agency more profitable. But the main thing is we report on over-servicing so we can take action."
"Instead of waiting until the end of the period or project to realise that we didn't do as well as we could. We compare the rate of completion to the percentage of costs burned, providing an accountability to client services.”
40 plus Edinburgh-based branding and design agency
Financial Director, Tayburn
Tayburn are a multi-award-winning agency for both creativity and efficiency. They’ve remained profitable for over 35 years. To achieve this, they have strong values revolving around simplicity, transparency and efficiency.
“We’re a very creative agency here, but we’re financially astute too.”
“There’s a buzz here. We do a lot of things to involve everyone. We have innovation teams. We do show and tells. I even do a session called ‘Finance is Funny’. You’ve got to keep it playful – that’s one of our values after all. And our phrase ‘Helping Make Remarkable Happen.'”
Steven knows all too well, the potential issues that can creep in, if you’re not razor sharp with your finances at every level of the agency.
“Clients are cute, as every agency knows. They subtly ask for amendments here and there, which used to get nodded through for free. But the extra work really mounts up.“
“We give transparency to our teams, so they have the information they need to manage jobs properly. Today, designers, artworkers and account managers are knowledge workers, even mini-entrepreneurs, for us.”
Steven explains the benefit to clients, when you get a grip on the financials:
“Empowering the account teams means they can advise the client rather than merely work on the job task. It’s a more consultative relationship, more valuable. It’s given them more of a sense of responsibility, more discipline."
"The team have become much more commercially minded now. They understand margins. It’s also helped our account managers & account directors earn more from existing clients.”
...and here's what other agency MDs said
“Decisions that used to drop relentlessly into my lap every day are now taking place with no fuss. That’s a payoff that keeps on paying.”
"Smarter client conversations take place today.”
"Synergist] has placed account administration control in the hands of those people that directly manage the business. This has had the highly beneficial effect of raising commercial awareness among the client management team.”
“Now, the team can take pride that when they do well on a project it is successful in every way.”
“When young graduates join us and work on small clients, the data now lets them be strategic. They understand the money side of things right away. It’s such good career experience for when they are promoted to handling larger clients.”
"It’s helped us change our culture. [Our FD’s] job has become more strategic, and people are empowered to run their own departments like proper little companies now."
“Upselling takes place now. Before Synergist, we wouldn’t have been able to achieve that. Having the data makes all the difference."