Question: We’re in the advertising and promotion (A & P) industry. Our creative and media teams have been tossing around your “purchase system” concept as the means to grow the business of those in car dealership (in the other Friday’s MRx column), and pharma (in last Friday’s MRx column).
This has almost turned into a guessing game among us, the kind we call here as a “thought game.”
It was our managing director who issued the challenge: “The first to think of how that “purchase system” can be this agency’s key source of growing our A&P business gets free lunch for the next four weeks, and free airfare and free three-day weekend accommodation in Boracay. The deadline for submission of entries was last Monday.
Today at lunch time, our MD announced that no one won. Of course, everyone was asking, “But what’s the winning idea?” Our MD said that he doesn’t know. But he does know a losing idea and all entries were losers.
For the winning idea, he said: “Ask Marketing Rx. It started this game. Let them finish it.”
So please tell us how good is your “purchase system” concept for growing our A&P business.
Answer: We usually don’t like to start our column with a correction. But this time, a correction is necessary.
It’s not the concept of the “purchase system” or the “prescription system” that we are presenting as the business growing source. It’s market segments.
And that’s the major theme of the Senior MRx-er’s most recent book, “Segmenting….”
The book proved that “the ultimate source of growing a business is market segments. Products, even new products are only secondary to market segments as source in growing a business.”
“Purchase system” and “prescription system” made up the techniques for identifying those business-growing market segments.
So in your particular industry, the question you asked was the wrong question.
The right one is this: “Will the ‘purchase system’ concept be a good technique for identifying our A&P business-growing client segments?”
When the question is framed this way, then you place “purchase system” where it properly belongs, namely, as a technique for identifying business-growing market segments.
In other words, business-growing is all about market segments, and not about the technique for identifying them.
Simple is best
What market segmenting concept then will be better than the “purchase system” in identifying your market sources of A&P business-growing?
It’s the simplest of all segmenting concept, namely, “big and small clients,” “major and minor clients.”
There are two related ways to think about the big and the small ad client segments. At the “static” level, the big client account is simply that: big. Its business growth, is the 70% or even 80% source of business growth of its A&P agency, Publicis-Manila, in the case of the giant account, Nestle. There’s a saying in the ad agency circle that unless you have at least one big anchor client, you’re in a struggle for survival. Two big anchor clients is better and may bring you on the road to sustainability.
As an ad agency, what will grow your A&P business with a big client? It’s the “big campaign.”
If your agency is the recipient throughout the year of “maintenance” or “reminder” campaigns, forget it.
By a “big campaign” we refer to the likes of Unilever’s “Lovapalooza” campaign for Close-Up, or Unilab’s pH Balance campaign when it first entered the feminine wash market, or Biogesic’s relaunch campaign, or the Smart vs Globe advertising war, or the once Jollibee vs McDonald’s almost every other week ad and promo exchanges.
How do you make sure that you are the ad agency who gets your client’s “big ad revenue growing campaign?”
The usual answer is that if your ad agency is the client’s AOR (or Agency of Record), that campaign will be yours most of the time. It’s in the client-agency contract. Every so often, though, client likes experimenting with other agencies and may do so but usually with a small budget campaign.
However, when the small campaign gains notice both from consumers and in the advertising community, client gets tempted to give them a second try, and then…Or else, a competitor ad agency on the lookout for a chance to pitch for one of your big client’s brands will get that chance.
How Publicis kept Nestle
Several years ago, after many years of courtship, Nestlé considered putting in McCann quite a substantial portion of its billion-peso ad budget.
If that had happened, it would have meant a real dent on Publicis-Manila’s ad revenue. So what did the long-time Nestlé’s ad agency do?
According to the story, the Publicis president (who was also its executive creative director), Marlon Rivera (yes, the same Marlon Rivera who directed the award-winning film Ang Babae sa Septic Tank), prepared an in-depth analysis and presentation of the ad performance record and history of 2 or 3 of Nestlé’s leading brands, and then presented at Vevey, the Nestle headquarters in Europe. The presentation so impressed the global Nestlé top management that no mention at all about McCann was heard.
That was the key to keeping the big client’s big campaign, sustained professional relationship.
At the opposite end of the continuum, namely, at the dynamic level, once in a while there’s a small client account that is “big,” i.e., potentially big or even very big. We recall that in the late ’80s or early ’90s, Lucky Me! of Monde-Nissin started as new brand of instant noodle under the advertising care of Basic Advertising.
Then quarter after quarter, and then semester after semester, and then year after year, it was registering a doubling of its sales. The business news then said that in one meeting of the Management Association of the Philippines, Nestlé’s president Johnny Santos was heard to have told the crowd: “I want to shake the hand of the man whose Lucky Me! just surpassed Maggi’s market share.” That man of course was Henry Susanto.
So be on the lookout for this kind of potentially big ad client. The key to getting and keeping it is the same: relationship building, nurturing and deepening.