MSL CEO Shares 11 Golden Rules To Achieving Profitability
How can you increase your department's, or your agency's, profitability? It's a question that all business owners battle with on a daily basis. In my experience of agency management and leadership, there is certainly no one silver bullet for improving agency profitability. Instead, I’ve always found that focusing on a number of the operational activities, usually the basics, will often have a positive impact on your margins.
Here are some of my thoughts that, if applied consistently and rigorously, will improve your profit margins without you, your managers or your staff having to make drastic, painful change.
1) Strong account leadership
Ensure that your leaders are commercially focused and understand how they can play their part in protecting your agency’s margins. Your senior leadership should implicitly understand how to protect this at every touch point, whether that’s an effective negotiation, involving the right expert at the right time, and just ensuring less people attend a meeting.
2) Negotiation skills
Invest and continue to evolve the negotiation skills that exist in your business. Positive negotiation with clients and suppliers is your greatest weapon for margin improvement.
3) The brief
Never underestimate the power of a great brief. The time spent defining a brief upfront will deliver untold efficiencies further down the line.
4) Play to strengths
Ensure that you have the right people working on the client challenge and take the time to brief them in properly. This way you stand a great chance of getting the solution right first time.
5) Scope creep
Always ensure timely budget updates are communicated to the client when the assignment strays from the plan. Scope creep is a profit killer that affects far too many agencies, but it can be managed and often eradicated by improved communication.
6) Meeting etiquette
Projects are often more complex these days and naturally involve more experts, which leads to long meetings and often with too many attendees. Have a clear agenda, involve only the key people, keep meetings short and agree clear actions at the end of every meeting.
7) Minimise the admin
Focus efforts on the client, not on how you organise and manage yourselves. Keep process and procedure to an absolute minimum and focus instead on delivering the absolute essentials required to create great work.
8) Relevant inductions
Ensure new employees know the standards right from the very start of their employment with your agency. Getting the basics right from the very start often ensures the big ticket items look after themselves further down the line.
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