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360 Degree dis-Service?

Kumar returned to India after working for more than a decade in another country – having gained experience in the Advertising Business there he decided to stick close the knitting and picked a job in the same domain back in his hometown. He heads Sales for a new Advertising Agency, which was launched less than a year back, and has made a mark in the South Indian metro towns. The promoters convinced a few clients that they had developed for their previous employers to move and used that as a launch pad.

Kumar has been entrusted with the task of building the organisation’s business in Kerala. He and team have been struggling to make a foothold – they have had a few small successes and did they take a page from the founders’ book when they employed Business Development Executives locally? He mentioned that couple of the new recruits in his team brought along accounts grabbed from their former employers. Is that a healthy practice?

I thought Kumar’s agency was focusing on mainline advertising services and probably couple of allied activities given that they were a new. Before asking him about their portfolio I went to the extent of suggesting that since they were not a well entrenched player in an already crowded marketplace it would probably make sense to get into strategic alliances with local professionals who specialized in some niche areas – so that they could collectively offer a portfolio of services to the clients.

But Kumar responded that his organisation took great pride in offering “360 degree” service (A Full Service Agency!) to its clients – which meant that they offered mainline press and TV advertising, research, outdoor, promotions, event management, public relations, and social media – The Works including bells and whistles!

It sounds fantastic and would look good on paper too!

It’s great for a new agency to be able to say that they can do all that for the client, but can they do it? Many of the national players and some well-established local agencies ruled this market and Kumar had already indicated that the response from prospects has not been so encouraging.

A few questions cropped up in my mind –

–          Did they have the bandwidth to offer such services?

–          How would they be able to win over talent from the bigger agencies?

–          What was the body of work available to show the prospective clients?

–          Did they have all the tie-ups needed to offer the services mentioned?

–          Did the promoters have the deep pockets to handle a large team and operations?

–          Did it make sense to offer everything – or did their client expect it?

Does it make sense for this new agency to launch a few services at a time and prove themselves there before offering the next set of services?

Well, clients are willing to move if they don’t get good service – so Kumar and team did manage to attract a few and now they have the big challenge of meeting the expectations. The same clients would move away or go back to the old agency if they aren’t kept happy. Does it make sense for this new agency to reinvent the wheel? Is in-house talent needed in every activity?

Kumar indicated that the market was in recession and clients were not just cutting down on publicity but also unwilling to test a new agency – they preferred a known devil to an unknown angel. In such a scenario does it make sense to invest in a large team?

I could be wrong, but I came away from the meeting thinking that this new agency was employing a high-risk strategy – weren’t they stretching themselves too thin just to appear good?

What are your thoughts?

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  1. Jamy
    July 18, 2012 at 8:26 pm

    Yup Jay, always get your ducks in a row before going ahead full steam…. good read again pal!

    • JayadevM
      July 19, 2012 at 2:50 am

      Thank you, Jamy.

      That seemed like the better approach to me. Wonder what the adman’s take is?

      • Jamy
        July 22, 2012 at 10:07 pm

        Probably never got to the take…. scene cut off..lol!!

  2. July 19, 2012 at 12:44 am

    Agency is taking a right decision by stretching/expanding at time of recession, as they can try their luck with less cost . Once they get work , they should outsource to freelancers or experts .
    Hiring is not a right option until and unless agency is having existing good client base.

    • JayadevM
      July 19, 2012 at 2:55 am

      Hi dtolab,

      So you are inclined to suport my thinking – lean is better. My friend in the ad business felt they need to have all resources available in-house from the beginning.

  3. July 19, 2012 at 2:49 am

    Guess they are being ambitious. They do have a thin ice under their feet, trying to pluck clients away from established players. A lot will depend how they walk the talk. Eventually, they may taste success but it does remain a high risk venture as you say.

    • JayadevM
      July 19, 2012 at 5:31 am

      Hi Umashankar,

      That’s right! It appeared that way to me … spreading themselves too thin and taking the high-risk route.

      Wish couple of my friends from the ad-business shared their views too.

      Regards.

  4. July 19, 2012 at 4:36 am

    Jayadev this is a very good article. I hope the readers get message. Keep up the good work

    • JayadevM
      July 19, 2012 at 5:37 am

      Dear Paul,

      Thank you for the helpful nudge … past 15K! You are a huge support.

  5. Ahmar Farooqui
    July 19, 2012 at 4:51 am

    Hi Jayadev,

    I believe Kumar (& his co.) have the prime motive satisfy their (1st set of) customers. He should go for local players for a combined expert service to his customers.

    • JayadevM
      July 19, 2012 at 6:29 am

      Hi Ahmar

      Thank you for reading and for sharing that comment. Yes, that sounds like a useful idea that Kumar and team can use.

  6. Raaj
    July 19, 2012 at 6:11 am

    Hey Jayan… interesting perspective, and a good one too.

    Your ideas are spot on…. but a tad bit too forward for that specific market….

    Here is my two cents worth…

    This is story with almost all new start-ups in India in general and Kerala/South India in particular… “everyone wants to be everything to everybody!”

    How many players do you know, who are carving out a niche market for themselves?…. no matter the industry, every business wants a finger in everyone’s conceivable pie/pocket… take any industry… healthcare (hospitals offering specialization in every possible area), tourism (the same travel agent offering inbound tours, outbound tours, visa, meetings, conferences, trade shows, specialty tours, international tickets, rail bookings, domestic tickets, visa services, immigration and what else) even large industrial houses like the Tatas, the Godrejs, Bajaj, Hind. Lever, etc have the same game plan..)… and this is a reflection of the same malaise. So why would this upstart ad agency be any different?

    Its like, you throw whatever you have at the wall and see what sticks!

    Of course, the Tatas, and Birlas, and Godrejs have a bit of extra leverage that allows them to change courses if they see one or more of those business ideas are not working… this agency might not have that luxury.

    I have a feeling that in the Indian market it’s still too early in the evolutionary chain for niche players to be successful… (of course there might be a few exemptions – but I am making a sweeping general statement).

    In order to be a successful niche player, among the many things that matter, one of the most important factors is that the person/people in charge of the boat should be aware of where their strength lies…. and in a market where every available talent is ready to jump ships midstream… or make the bigger leap across (to) the Gulf… the strength of the organization is a very fluid concept.

    My “strength” today might be working for my competitor next week… (this factor is evident even in your story as ‘hiring locally’).

    From a management prospective we can talk about doing a SWOT… and stuff like that… but the reality is that most employers have no idea of what they teach in management school… and besides even when you know your strength, unless you can motivate/compel the high-fliers to stick around long enough, in most cases SWOT does not always bring out the desired results.

    So everyone resorts to what I said earlier…. grab a handful of “everything” and throw it at the wall…. “something” will usually stick… and that might be your niche!

    Keep up the good work Jayan… many of your stories get me all fired up (you can tell when my comments are almost as long as your posts!)…. my apologies.

    • JayadevM
      July 19, 2012 at 6:28 am

      Hi Raaj,

      Ha! Ha! Ha! I can see that enthusiasm .. No problem. Am glad you are sharing those thoughts at this forum.

      Another reader, Vinoo, mentioned that gradually growing the business and providing everything upfront are both valid routes. But it depends on ones strengths and the bandwidth available to such things.

      From what my contact said during our chat it sounded like they are already stretched to the limits .. hence my query on why they had to do everything.

      Yes, its a bit of Me-too syndrome working when everyone tries to offer everything … but sadly a start-up will burnout trying to emulate a Tata or a Birla.

      They need to build a strategy that work for their situation; otherwise they will end up like the crow in the Panchathantra story who tried to turn himself into a peacock!

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