Read this: Media Business Podcast #4: ALF Insight
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Hello and welcome to this special edition of the media business podcast brought to you by Media business insight and this week as I'm I'm Fraser Murdoch managing director of HR at Alf we are obsessed about finding ways of making sales easier for media companies for advertising agencies in for marketing services businesses when they're targeting the biggest spenders in advertising marketing UK English episode we going to speak to a start-up and the breakaway agency that an agency.
That's broken away from the large network about how they win clients plus will also be talking to add header content about a brand new report that covers the big spenders is the future that's all the time, so I'm delighted to say that today.
We're going to hear from two very different business development models both are agencies yet both come from a very different place one is a start-up and one is a break away from one of the big networks in each case I'd like to examine the business development model another.
How each has set up a process or not for winning clients that begin with the Startup so hms16 was founded in 2016 by Richard Hammond who is BA Steve Meredith and Paul Seabrook Richard represents the sales and client management bit of the triangle so welcome Richard Hammond thank you very much for let me start by asking.
What are the biggest challenges for hms16 at launch, Richard long time ago now, but it's only two and a half years since we've been trading and even to this moment.
I remember the phone call we got from a Chinese automotive Brand and I'm asking is to work with them on a secret project and we didn't start hms16 out of Vanity or ego.
It was really to surround the clients business opportunity to build electric cars in in Europe under.
That story was a tough start because we built the business three guys lot of automotive experience in fact Paul Seabrook and been at General Motors Steve Meredith worked on sea at business across Europe and I worked on the Chrysler Jeep launch in Europe so we were so steeped in the industry and then the client decided not to launch electric vehicles in Europe I'm so it was a tough start to the journey white shocker Richard so what happened next? Yeah, I know what it's some in two and a half years that have elapsed since those secret meetings in dark and hotel rooms in the city and was some interesting people.
I think we we do realise that they were not going to be launching a vehicle and trust me we pushed them hard to investigate a cup of tea markets like Norway to launch as a test market that we.
Couldn't convince them, so what we did was that was a couple of moments.
We go right do we keep going to just pull the plug and go back to what we all doing Consulting running different businesses doing freelance work? What do we do? We make this work and then at that point it was a moment of deep decision for all three of us and we decided that it was we had credentials with a lot good track record with contacts, but we would attempt to Muster clients from other other territories under we did that we were lucky to find other people that wanted a independent view on their business and their creativity and we were lucky to have to move forward with be no less ambitious growth plans.
I think we achieve half of our revenue in year one supposed to the full number but it was a good.
Wake up call and I think it we did really hit the track car in terms of trying to recover from that difficult start but it will certainly go in the book when I write one.
That's quite a story so now let's go over to the breakaway agency good stuff, which until 2017 was part of the mighty omnicom Media Group when the two founders Ben Hayes and Andrew Stevens boot omg stake in the business notionally at least this is very different to the hms16 experience and I'm pleased to welcome one of those co-founders today Andrew Stevens so we've got on the telephone Andrew of course as a founder of good stuff.
You presumably been in a similar situation to Richard today though.
I'm interested in understanding the challenges of good stuff.
Not as a start-up which you want to work, but as a business that broke away from a network agency and other strengths and course the weaknesses that that brings.
What were the biggest challenges for you on breaking away.
I think probably I think the first was making the
Auntie wants to break away in the first place.
We had a relationship with me, business was doing very well.
I need to ride a precision 20.2 can I cut that coding at which point near to go to go can a solo particularly in a world where for Media buying your the needs of a back end of an agency for finance the accreditation total benefits of scale you get our kind of so important, but essentially we had decided that year that that was a moment to do it.
We didn't to look back 5 years from 2017 having not done that there was an opportunity for conversation, but I'm gonna come so we took that opportunity at the time.
She gets the first challenge with as you making the decision and then can seeing it through I think once it had happened.
I think the challenge was getting used to.
Running a fully independent business because it had felt independent before that but in reality we had omnicom as a back as a supporter and always there at the end of the phone should you need something so I guess you just getting used to that reality of not being as they're not being some of the end of a phone should there be a finance query or anything else? I guess it's just getting used to live on her own.
Thanks Andrew Souter Richard in your case it was you had a client and then you didn't have a client and and ruin your case the stabilisers were off so let's move now out of business development itself so first of all Richard what structure is it just you it's not we've been very lucky actually.
We've surround ourselves with people from different Industries who probably done.
They done their 20 years of hard disks stuff and now Consulting and we've linked up with people in different sectors with enormous amount of knowledge and contacts so we work with any other guy in the retail sector we have a guy in the pr.
Sector we have two people in the automotive area that we connect to we leverage the contacts and they've been extremely useful to guiders into end.
Bring those segments that we've had not Direct experience in particularly in retail.
So how does she work? They are not employees are not in the not employees there certainly consultants we work on a basis of day rates with them and work with them on the basis of successfully, so it's a smart way to open up categories that we have looked at previously Andrew how is business development structure that good stuff broadly speaking of two co-founders so myself and Ben Hayes Miro essentially is an external roll, so I look I look after all external relationships and within that any new incremental revenue within the agency at ventrolla sensors then to make sure that it stays within the agency that broadly Howie Howard structure stuff, so I will look after all new business and
Any new Ventures the we might want to enter into as well and within that I have a small team of two people who fall into what we currently colour.
They were we are about to change this a marketing and new business team so you're about to change it may I ask yes because we're going to take away name new business because in reality we don't we don't do what I think.
It's probably deemed as classic new business and all of our efforts was ultimately results in new business or marketing of them and they're very much brand with an and we do that for a number of reasons ready one is that I think we have a slight luxury in the media industry in that there are very few strong differentiated brands in the media sector.
There are a lot of networks there lots of agencies that begin with M and A lots of agencies with a with an array of pastel shades for there a colour palette but in terms of really distinctive brands in media.
I don't think they are very many and with a background that we've got so we started our life in creative agencies.
It's Archies weaveworks on some amazing brands.
We fundamentally believe in the role of the brand can play for clients and therefore.
I think we should believe what are the role of brand can do in media so everything we do is brand driven.
We do events.
We launch things like start stuff which is a million-pound initiative to find the next generation of agency owners and we work very closely with creative agencies and with other partner agencies to do brand lead stuff was ultimately ends in referrals and new business, so we don't for example do mailing campaigns.
We don't employ an externally to do your business and everything will go through me and go through a brand lens, so that we is a as a business in media.
Look and feel a bit different to summon a big networks you talked about events that could you give us an example of that just trying to paint a picture of it? Yeah, so we have an event actually in about just under or just over 2 weeks now.
Could you cast off Media showcase that is now it's 40 years at the Curzon theatre in Soho and that events was created to better connect creative agencies for in the audience 250cc dzonas head to strategy from agencies from AMV Adam and Eve through to widen to mother and on stage.
We will put a team owners who have specifically created a new opportunity to work with creative agency.
Directly to the idea of getting content and context to work together with two bigger than we do campaign coming hosted that for us is amazing new business in a very indirect way because for working with 50 different creative agencies talking about the Power of Brands and media creativity so guess.
That's a good example of of us doing your business, but then it doesn't feel like it's new business.
To Richard you entertain having your competitors in the room where you were promoting your agency if if I've got that right Andrew I'm not as competitive.
It's more a case of I think that's some balloons.
We had a few years ago was there a number of creative agencies had some frustrations with a media agency partners that they didn't have the access to murderers to talk about the development of an update Media owners simile had frustration to the day.
We've been stopped talking to the creative agencies 5 Media agency.
So showcase really was there to help break down that barrier and directly introduced the media owners to the creative agencies.
There is no competition in there for us at all there all agency partners of Oz and Oxhey the metering and partners.
We are just hosting and creating the night.
I would say with very smart from a meal.
Define prospective in media planning partner.
I think I'm the creative agency point of view as quite difficult to work with other agencies in the same room so we would go the opposite direction which would be too.
We we run workshops for clients.
We create an environment where they can talk about their issues and challenges ahead and it changes the dynamic from the briefing process to the created delivery to the execution and then the media by what is allow them to do is to talk about their wider business issues, and it's a great way to get some into intimacy with the client and understand what they're really shoes are what's the threats out there? What are the opportunities and what are the barriers to overcome that we call that are Discovery day keeping on the Nautical theme as hms16, but it's it's a fun day, but I do like the good stuff.
You know kind of agnostic approach to getting the creatives in the same room.
That's very smart.
But we would definitely look to help clients across the piste in a way.
We look at them as you know as a business.
Not just as a creative opportunities about adding value to their business whether it's raising money helping them in a pitch that investors if it's launching a new product if it's about getting a credit message ausp to the market or working you know with a media partner to deliver events Media basic cetera, so it's much more for Strategic holistic business proposition that we focus on and then use that to ultimately do with our day job if you like which is making great TV ads sensitivity you get given that you don't do that traditional mailing stuff.
Where do you get leads from but it all pretty much comes from?
So whether those referrals are from an existing clients, so we we are part of the referral rating company client survey where we know the degree to which client would recommend us to other clients and we know that score is very high on that so we get a lot of referrals from existing clients.
We get a lot to referrals and probably more so in truth from partners through intermediaries safe from the IRS auditors like it because he probably have four or five different incoming streams of referrals and then there's just taking a picking up the phone to my new company store to clients will people we know they've gone to a new company, but I'll take only that's very small part of what we do most of it is Fielding in band opportunities.
Part of the network, do you think I think and I'm and I don't know what the approach of Seven Stars is but I'm going to suggest it's not dissimilar to ours which is that we will both be benefiting from seismic change in the media industry in the UK networks dominating forever and a day really over the last 5 years or so, I didn't networks of problems have been very well documented and independents are growing significantly and therefore 1 comes to review their business.
It's much more likely these days that the clients will want an independent agency or two on that list and as the two biggest independent Media agencies, Seven Stars and and we I think it our fair share is not a proportionate share of those opportunities, so I think a lot of it is down to just market chains and frankly being in this all right place the right.
I'm so Richard is different for you.
I think so.
I'm sitting here rather enviously Andrews proposition at the moment.
So I think I'll sector is incredibly crowded.
I mean you know with bumping into people doing creativity in the might be PR agency in event company Media owner present incredible ideas to clients.
It is a real Battlefield so I think we structurally process very differently we we we worked really hard at it.
We attend he trade shows we put PR pieces out into the median those relevant trade titles that support those events we attend those events Wetherby UK Europe or global it's a lot of trips out to these key events like Basel world which is in Switzerland which is the celebration of the Watch industry always have that one and I think you know we we build around databases by picking up those contacts and
And then nurturing them.
I'm a great believer that you have to go for The Long Haul when it's a cold lead and move that to a conversation with that to a meeting and potentially move that an opportunity so we drill through the data and we work hard at making those Leeds come to life and converting them to to prospects was we don't have people just walking in the door asking for an independent view on their creative cos it's a very very competitive sector indeed, so is that is all that passing to you.
So you've got your guys in omodos externals, are they then passing rose Leeds to you and you pick them up and follow them through to me individually or you and Georgia Lowe what we can we split them up so across the three of us three partners take on been over 32 guys Leeds the coming to chat more relevant victim of a creative challenge against the Steve if it's more data lead it goes to Paul if it's a more general enquiry that item to pick it up.
And then beautiful about through to a meeting with a presentation ideally but it's some it's a tough one and you'll have to be prepared to dig deep and keeping contact because no business doesn't review everyday reviews yearly or dinner.
It's a long cycle for Sean so when you see a lead Richard what are the what are the characteristics of a lead that say to you? I've got a really good chance here yet, because it's about the the character of the company with dealing with we work much better with owner operators people that own their own businesses people that don't want to work with a big global network with their going to be not having any personal attention.
I think it's about the brands that want to grow something.
That's a legacy brand something has perhaps been through challenges and looking for.
New Direction but I don't buy family or perhaps a family offers for examples of those of the kind of clients that we really had drill down on and and make sure all that we see that through to conclusion and with most successful with those going to businesses if you look at our client base, it is us and mainland European focused we have UK clients as well be a lot of our business comes out of the US and they're typically entrepreneurial family businesses and presumably often not work with an agency before they work with the US agents.
I get a European agency, but you know they see the UK as a big market.
They want to be in the in the Europe in the UK and we fit that bill for a while and Andrew a good lead for you.
What what what are the characteristics that depends really?
We have a 19 point check for the clients that we do we come across as to whether we want to continue the conversation now from a fortune perspective that would be a range of questions around size of clients.
We particularly like clients descale to most of our clients are the e-commerce and or and or Challenger brands that we don't have many clients you spend the same every year and grow or decline Bob on 80% So the business that can scale with us as a partner will score higher moksi be like on a clock that won't the scope of work so if they can't does their own digital enhance that will score less than if we will do the distal for them what the processes were the we know them the ability to produce amazing work and Frankie whether it's something that the agency want to work on so we asked the
Leadership team everything that comes in would you want to work on this client and will not saying that the answer to that is the definitive answer, but it's a really good guide is to have the agency would react when we announce that we are pitching for climax.
So put all those things kind of in the mix of aliens a different times of the year.
I guess fortune is more important than the others and if you're having a good time then we'll probably put a bit more emphasis on the phone and phone Andrew in terms of business development when you broke away one thing that didn't work and one thing that did something it didn't work was thinking it we chased far too many opportunities far to manually far too many shots and opportunities and I think we're too easy flattered if I'm honest.
I don't think we were professional.
And choose enough about the conversations the meeting the partners that we did in the first couple of years and we had an awful.
Lot of what seemed like really interesting conversations the actually have we ask better questions right at the outset and probably been a bit stronger.
I think would have wasted a lot less time than we that we did in the end, so I think that's everything that I would have said I would if I did it again.
I would learn and it went wrong.
I guess the thing that went right was the fact that version was are found in clients and it was a great opportunity to open doors to any other Challenger brand the wanted to know the kind of thing we were doing and why virgin help to sleep on me, so I guess that was once a that's what we did write.
It was again fortunately it was version that started but I guess that would be the thing that went wrong with probably seen it went right now.
Thanks for sharing our fantastic.
Richard what about you? That's a really hard question will you had a client lost the club? Yeah? I think being believing that something was going to happen and and you you know I didn't work in the business of a few years and I think when you have those into my conversations about getting round one client and launching it's very easily to not focus on anything else, so I think that was probably the mistake.
We just wanted to in a bit like you know with Andrew with Virgin you said have you poor huge amount of effort into something and then 3 months later.
It's still sitting in a document and opened in somewhere in China that was tough.
I think the thing we did right was we work with partners.
We we opened up our channels to interesting other businesses as a lot of collaboration in the early days and that really helped.
And there is one of the thing we did which was it we open up the black book which is always useful but the black book does run out so I think it's you know it's those of the three things that I can share with the with the audience because I think it's it's easy to get beguiled and flattered when people come talk to you, but you need to do both you need to talk to them and make sure you got other conversations going on Andrew Stevens goodstuff, Richard Hammond hms16.
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We're going to take a brief look at the new development for mouth.
So if you don't know it already have is a service that provides a database of people brands and spend that help Media businesses advertising agencies in marketing.
Overseas companies to build their client base and these are the biggest spenders in the UK that alpha lists.
I have with me today at Lynne Bonner she's had about content welcome Adderley thanks Fraser adaline very soon will be launching a new element to the service which is called Alf accelerators festival idling.
What is ALF accelerators as accelerators is another way for us at Alton site to help our clients generate additional revenue for their organisations by providing them with a set of prospects not currently available yet, so surely addling every company big company is already enough not necessarily and that's what makes that report a very interesting and exciting I think because these companies are not nice.
Why because although they have the financial means to do so they haven't yet? Spent enough to me.
Cheap into the top 6000 UK advertisers, but they have the propensity to do so in future absolutely understand that so how we set about actually compiling the data well.
We Source one other than 8 UK b2c companies.
Ok? I will sort them from from a few lists which were published in 2018.
So the first one is the Sunday Times fast track 100 the second one is the Sunday Times tech track 100 and the third one is the FT 0 fastest growing companies list ok, so that's roughly 300s companies which use them winner down to just over 100 to have we done that well the way in which we selected us companies.
We looked at three different criteria.
The first one was company turnover so 417.
To be at least 5 million pounds then we looked at the number of employees which had to be 10 minimum in 2017 but mainly the company we've included in a report witnessed a revenue growth of at least 45% over 3 years which was from 2014 to 2017 ok, so the rule fast-growing business is what people are we trying to find in those organisations we decided to provide contact so keyboard such as founders owners chief executive or managing director discos, because she's being relatively young these artists with people will be hands-on, then obviously Marketing contact.
Pokémon contact such as chief marketing officers marketing directors or equivalent Rosie's art edition makers obviously for marketing advertising then inside is quite important because this is a growing area which is linked to again marketing advertising so we're going to provide inside directors head of insights and finally we decided to at least take people such as the CTO technology director digital directors again, because these people are increasingly involved in a marketing strategy of businesses and our team developing the business digital capabilities as well.
So if you are the kind of business, you are interested in reaching search contacts.
You should find out report very valuable, so what makes different to the core Health Service what makes I believe very interested for those of you listening to us today is there Beast
Haven't been selected based on advertising spend which is the creature rarely use for us, but because there's been the fastest growing companies in the UK over the past few years as mentioned earlier, which means they do not feature in act although the fact that they are not in his denial means that they haven't been spending huge amounts on advertising that have the capabilities to do so hens represent good opportunities for our clients so these vendors of the future exactly with this company should be on our clients.
Hot prospect is because they are as you said the company's of the future and that our clients can in turn help these companies promote themselves and growing future fantastic.
So when's it ready excellent looking forward to it adaline? Thank you so much.
Adeline Bonnie Richard Hammond and Andrew Stevens remember you can find out more about alfinsight at our website Alf insight.com to hear more episodes in this series subscribe to the media business podcast in podcast paradise alley man will be back with an episode of The Regular Show two weeks time I've been Fraser Murdoch see you again next time.
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