EP 30: The Power of Positioning, with David C. Baker
On this episode of THRIVE—sponsored by Workamajig—Kelly and David C. Baker talk about their shared favorite topic: agency positioning. They discuss the holistic foundation and myriad benefits of strong positioning for creatives within the context of David’s latest book, The Business of Expertise: How Entrepreneurial Experts Convert Insight Into Impact + Wealth, available at www.expertise.is.
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Episode 30 Links
David C. Baker: davidcbaker.com
Book: The Business of Expertise
iTunes / Apple Podcasts: itunes.apple.com/us/podcast/thrive-the-agency-scaler-podcast/id1370205729
YouTube Channel: youtube.com/channel/UCboltXvff1KfeCHpQbY_8PA/
Vimeo Channel: vimeo.com/agencyscaler
Anchor, Google Play Music + PocketCasts: anchor.fm/agencyscaler
Archives + Show Notes: agencyscaler.com
EP 30:The Power of Positioning, with David C. Baker
Kelly: Today, we’re talking about the power of positioning and my guest is the man, David C. Baker.
For anyone who is listening and watching and may not know everything that David’s done in his career, he’s an author, speaker, adviser to entrepreneurial creatives worldwide. He’s written five books, advised over nine hundred firms, and keynoted conferences in thirty countries. His work’s been covered in dozens of international publications and his latest work – which is a book that I absolutely loved – is called The Business of Expertise: How Entrepreneurial Experts Convert Insight to Impact and Wealth. You can check that out at expertise.is. David, thank you so much for joining me on Thrive today.
David: Sure, it’s really good to be here. I had to move a couple of things because of the crazy travel schedule. I’m glad it worked out. I’ve been looking forward to chatting with you and your audience.
Kelly: Absolutely. Today we’re talking all about our mutual favorite topic, which is determining market position. For all of the creative agency owners listening, why is it so imperative that we niche down and stop being all things to all people?
David: I think it’s important now. I don’t think it was all that important in the past, but the world has changed around us radically and quickly and we can just say the world has been Google-ized. Now we have access to all the prospects out there that we want, or at least a much larger universe. But our competitors have access to the people that we used to work with, and we were protected geographically, and we’re not.
The world’s expectation around information and expertise is so specific, you could be lying in bed dreaming about one very specific thing, and for a minute you might think, “This is such an esoteric question I have. How in the world would I find somebody that knows exactly what I need and could give me the information free, and could give me the information immediately?” Then you realize, “Oh, there’s this thing called YouTube or Google or whatever.”
That’s why, because nobody wants to pay for the wise person anymore. They want to pay for deep expertise, and they’re comfortable assembling this litany of experts and picking and choosing, and then coming up with a plan on their own. Unless we’re niched that way, we’re just not going to have a very compelling answer in the marketplace.
Kelly: You probably love the term “full service digital agency” as much as I do?
David: Yeah. Full service simply means, “Hey, I’m desperate. Give me a chance…”
I wrote an article one time for communication art years ago. I was in a punchy mood and I knew the editor pretty well, so I added two paragraphs under the article. I knew she would recognize it as a joke and axe them and we would have a good laugh over it. But she didn’t. She actually thought that that was a part of the article.
What I said in the article at the end was, “Prostitutes are better at running their businesses than creatives because the only people who, when they say “full service”, mean it are really prostitutes, and the rest of the people just mean, “Give me a chance. I’ll do it. I’ll figure it out.” Yeah, I don’t like that term at all.
Kelly: I was looking forward to a lively conversation. You’ve already not disappointed in the first three minutes.
Kelly: Let’s talk about this for a second. In terms of translating positioning to all the touch points where we might interact with our prospects, you say, craft your positioning entirely on your strategy and not your execution. Don’t even feature it on your website because it’s interchangeable. This is a huge pain point in the creative world. Everybody has this Chinese menu of services on their website. What’s going on?
David: Maybe it’s because that’s where all their training comes from. Very few of them had any classes on strategy or research and insights or account planning. Almost all of their work was related to a particular craft which we now see as largely implementation. And to move upstream, we have to attach that implementation to strategy, otherwise we’re so far downstream and somebody else has made all those decisions and we’re simply there with a compressed time frame and not much budget left to be the hands people rather than the mind people. I think it’s really tough.
If you think about somebody who is a fantastic coder or an app developer or something like that, they need specific requirements and instructions and guidelines, but they can be really, really good regardless of what the strategy of the project is, and that’s what I mean by it being really interchangeable. I believe that the implementation is something that most clients want and value but they’re not going to pay a premium for it unless it’s attached to a really tight positioning.
Kelly: The other thing that I think of when I look at these websites that have the Chinese menu dropdown, it’s almost like having the clients self-prescribe their own solution and then simple search out a commodity to get it done.
David: Which should be called malpractice in a professional service setting, where you don’t go to a doctor anymore. You go to the pharmacy and say, “I know what’s wrong with me. This is what I need. Do it.” That’s self-prescribing and it’s unethical. It’s immoral, but we allow our clients to do that sometimes because we don’t feel like we can push back. We view these client relationships as sometimes a little bit fragile and have to be handled carefully, and if we push back too much, they’ll go to somebody else. We’re left with this powerless positioning that doesn’t allow us to have the sort of impact and make the sort of money that we could.
Kelly: Actually, that’s a great segue to one of the other things I wanted to talk about, which is one of my favorite credos in the book: is for agency leaders to drop the irrational fear, that to keep a client, you have to meet all of their needs. Do you think that that irrational fear stems from insecurity alone? And how can they move past that if that’s the case?
David: I think it probably is insecurity. I’m not absolutely sure. I know that would be the case for me. I’m thinking back to my dating life, actually. I’ve been married thirty-eight years and I remember how I was just self-destructively nervous and defensive… I wasn’t a good boyfriend at all. I was jealous and that’s where this idea came to me: you shouldn’t be afraid to let your girlfriend – in my case – dance with somebody else at the party. What kind of lame mindset does it take to not let that happen? Somehow that creeps into how we work in firms and, it creates this expanded survey, this Chinese menu that you’re talking about, because we don’t want our clients going somewhere else. We manufacture our ability to do something because we’re afraid they’re going to fall in love with somebody else. So yes, I think the way you phrase it is exactly right. It’s this settled sense inside us that we’re not really sure that we’re that irreplaceable, so we don’t dare let our clients experiment with that.
Kelly: I just had a client recently that went through something similar, and their way of dealing with it was to make sure that they had some type of say in placing a new marketing director at the client’s place. What ended up happening was they got passed over for a much larger development project, which was not in their wheelhouse at all. Now they’re very nervous that the fox is in the hen house.
Let’s go into something else. In the book, you talk about – obviously – this whole thing about expertise; the ultimate control that stems from withholding the expertise, but that it’s only meaningful if your agency is actually difficult to replace. What are your thoughts on ad agencies that have to pitch big brands with creative concepts or campaigns?
David: Where they’re doing that for free before they’re engaged? Yeah, in some cases I think they just feel like it– never occurs to them that they have an option. They just come to believe that this is how the game is played, so they respond to the cattle call and they show up, they do their thing then they beg to be chosen. It’s really lame. It’s like somebody who’s not good at sports hoping to get chosen for the softball team or something.
It’s dehumanizing, and the reason that these clients can do this to agencies is because they can. Right? Blair Enns talks about that all the time. They do it because they can and we let them continue getting away with it. He’s also done some interesting research that says that your chances of landing those accounts in a cattle call setting are directly related to the degree to which you disrupt the process. If you follow all the rules, you are very unlikely to win that work.
Kelly: That’s interesting.
David: Yeah. You have to say, “You have to spend extra time with me,” or “You have to tell me who else is pitching,” or “You need to give me another week.” Whatever it is, if you don’t disrupt the process, they make it you’re not even worth participating. The reason these agencies do it is because they are largely interchangeable and it’s much more difficult for them to make changes to that.
They may even recognize intellectually that they have a problem with positioning but very few of them have the power to make those changes at the institutional level, because they’re often a part of a holding company or whatever. They also misunderstand positioning because those agencies, their primary value to their clients is the fact that they are large enough to have a deep enough bench to be entrusted with a large project.
Smaller firms, the ones that you and I typically work with, don’t have that luxury, so positioning for them is even more important and they can’t lean on that. But the truth is, most agencies are not positioned well and most agencies are doing average from a financial standpoint. Those aren’t the people I work with. I work with people – and you do, too, I’m sure – who want to be exceptional. They want to have a little bit more power in the marketplace, not to beat clients over the head, but to make more money, so that they stay interested in this silly business, so that they do better work for their clients and can sleep at night.
Kelly: Do you think everything, at the end of the day, if we really were to boil everything down, do you think it all comes down to positioning?
David: I do, absolutely, because without positioning, you don’t know who your prospects are. You don’t know where to find them. You don’t know what to say to them when you find them, and on and on. You don’t know what they want to buy from you. You don’t even know who to hire to fulfill the promises you’ve made, so I do think it all comes down to positioning.
Kelly: Everyone wants to jump on profitability but I think you can’t even go there until you really get positioning nailed down.
David: Absolutely true.
Kelly: Let’s talk a little bit about the concept that’s quite hard for agency owners to wrap their head around on, and I’m glad you touched upon it in the book. As opportunities increase, agencies should be underbuilding their capacity and having more “no” conversations. Why do these people fight this tendency so much?
David: I think it comes from this cultural infusion we have. We have this genetic disposition to say yes to growth. We feel like being a stable agency that’s not adding nor detracting from body count is making lots of money year every year. That’s just not enough. It requires, to really be successful in our world, you have to be growing. You have to apply for the silly Inc. 5000 awards or something.
If you think back on it, step back from our industry, and you think about this world that we live in – here in North America, anyway – it’s called “the land of opportunity.” If we say no to opportunity, it almost becomes unpatriotic which is really silly. Every time opportunity comes along, we say yes to opportunity, which means that we build out our capacity. In the process, we’re creating this larger and larger machine that we have to feed. If we don’t keep this delta, this difference between our opportunity, our capacity, then we simply don’t ever have the opportunity to say no.
I’m convinced that most bad business decisions come from financial panic, around our positioning, around our people or what we’re going to do with a client or whatever that is, I want to make sure that there’s a difference between those two: opportunity and capacity, so that people will have the comfort to say no. Most of the time that means you just say no to opportunity. Sometimes it means you have to dismiss staff because you don’t have enough opportunity for the people that you have. That’s the painful side of it.
Kelly: When you say under-build capacity, I’m assuming you mean you have a core team – that’s full time employees. You can rely on an elastic team of contractors and things like that.
David: Exactly. Those contractors should be more the skill people, not the folks managing projects and accounts and doing strategy. If you work it that way then it works beautifully. And there are so many fantastic contractors out there these days, a better pool than there ever has been, so it’s quite feasible.
Kelly: So, contract out your execution and your implementation stuff. Keep all the client relationships and everything else in-house. Grow that. At what point, though – yes, you’re underbuilding the capacity, having more note conversations, but let’s say you have a couple of ideal opportunities; these are perfect opportunities for your niche, your fit, your core expertise – what point does an agency owner say, “Now we actually do have to increase capacity.” How do you measure that? How do you have that conversation with your clients?
David: That is a fantastic question and I can answer for you, but we actually switch into another chapter here. Like you said, it’s a perfect opportunity. We’ve looked at it carefully objectively; there’s no problems with it. We have to ask ourselves as agency principals a different question and that’s this: Do I want to step further away from the work and closer to managing people? If I answer that in the affirmative then growth makes really good sense. But if somebody isn’t willing – as they grow – to step towards people and away from doing, then it’s a mistake to grow. To me growth is not bad or good, it’s very neutral. It’s about what you personally want to do, so I think it’s fine. It’s actually really good idea to grow if you’re answering all those questions right.
Kelly: Right, but it’s about putting that checklist in place and really doing some soul-searching to see what you want.
David: Right. I mean, is there any connection between firms that are thriving and their creativity or their intelligence? There’s very little. The connection is between thriving and the quality of their business decisions, around positioning, around people, around services, all those things. That’s the work that you and I and other people do. We try to help them think through all those business decisions that they’re making.
Kelly: Right. Well, for everyone listening, if you have not ordered a copy of The Business of Expertise, go over to expertise.is. David’s got a ton of other resources on that site as well. I will obviously post everything in the show notes. David, thank you so much for your time, this was really, really fun.
David: Oh, Kelly, it was great; really enjoyed chatting with you. Thank you so much for having me on your podcast. I appreciate it.
Kelly: Thank you.