Collections Management
How long does it take your customers, clients or patients to pay you for the products or services you have provided?
Have you developed a consistent collection management program?
Your answer to the above questions is a leading indicator as to how well you collection management is. Sending an invoice doesn’t always result in payment. Successful collection management s a matter of making your payment terms crystal clear and separating collection management from new business functions, in other words – keep your emotions out of collection management!. You can’t be hesitant or soft in collection management.
Collection management is a sticky subject because it can require getting tough with the very same customers that pay your salary. Many small businesses handle the collection management process in-house, either by having their sales staff with the task of collecting their accounts (talk about playing on both sides of the fence) or by using billing staff that have never had formal collection management training.
Frequently, a business will consider turning over a past-due receivable to a commercial collection agency after it has been outstanding for 90 days. At their core, collection agencies try to get the money owed by using a combination of letters and telephone calls. The are just professional and full time collection management firms.
Monitoring slow-paying accounts and adopting timely and systematic billing practices are just two ways you can help reduce your receivables using collection management.
Collection Agency
Outsourcing offers you free information on collection agencies and debt collections issues.
Tips to Help Top Marketers Get Up and Fight in the Face of Failure
Here’s a true story to shine a light on what can happen to top marketers in the face of failure. Details have been changed to protect the innocent.
The Alpha Company has recently brought in a new marketing department head to drive revenues. Three months ago, company leaders sought outside counsel to reduce the marketing budget by 25% to compensate for downward trending revenues. Advisors said the lower budget could work if several marginal programs were cut and all remaining dollars were focused on the most important market segments.
Upon arrival, the marketing leader is confronted with entrenched programs and people resistant to change. To new eyes, it is hard to spot the sacred cows because the organization does a poor job of tracking results. Another department head served as interim marketing leader and is not at all happy to lose the responsibility. Rather than help the new person sort things out, he makes it his job to alert the CEO about missteps the new marketing leader makes. This, in turn, makes the new marketing leader less willing to take risks. As a result, the 25% cut in the marketing budget is across the board, and the programs that can most likely improve financial results are rendered 25% less effective. Revenues decline fast. New marketing leader is under tremendous pressure just two months into her new job.
Everyone who has been in marketing for any length of time has faced failure. Success and failure are close companions. Smart companies realize this and encourage a certain amount of marketing experimentation. Test markets are just that — a way to try bold new things. The best marketing people are aggressive by nature and willing to stand up to corporate pressures that would eliminate risk and good ideas.
What marks exceptional people and organizations is not whether they can avoid failure, but how they tackle it when it comes. Like our new marketing leader, you may also face a really tough situation. Here are some ways to get back on track from someone who has faced the possibility of serious failure a few times.
Pick Yourself Up. Our tendency is to focus on consequences at the point we are confronting truly difficult circumstances. Focus on what you would do if fear wasn’t standing in your way. Fear clouds judgment and suppresses creativity required to solve the problem.
Change Course. The one great thing about failure is that it has a stopping point. No organization will sit still for long when confronted with big problems. In an odd sort of way, failure opens doors that success seldom does. Management is more willing to change course and try new things. People who are obstructionist tend to stand out more and are easier to sweep aside. At the failure point, there is more risk in maintaining the status quo than in doing bold things. This is when true leaders emerge.
Assess Available Resources. The new marketing leader in our story has a big challenge to drive revenue with a small remaining budget. Her first order of business is to assess what is left and to reprioritize everything. This should then be compared with a strong plan of action to change the outcome by having the courage to make tough calls.
Let Truth Be the Guide. Marketing failures are often due to inadequate budgets in the first place. In today’s cost-saving business environment, marketing department budgets are easy trim targets. When goals are being met, it is easy to take a don’t-rock-the-boat attitude when fighting for resources. At point of failure though, an honest assessment of required resources is vital to reverse the failure. In our story, new marketing leader has little to risk and much to gain by demanding more money.
Involve the Whole Team. At failure point, many people tend to hide the facts from the very people who can change the outcomes. Resist the tendency. This is the time to gather the team and lay truth on the line. Rather than increase fear, this move actually disperses anxiety. Everyone knows things are not going as planned and shares concern about consequences. Give your team members a chance to shape the solution with their own great ideas. Most important of all, believe in yourself and stick to the job until the problem is solved.
Bill Fritsch is president of Hydrogen Advertising, an award-winning, Seattle-based advertising agency emphasizing superb ideas efficiently produced. Reach him at 206-389-9500, ext. 224 or email bill@hydrogenadvertising.com. For more information, visit http://www.hydrogenadvertising.com.
Financial Gain is a Consequence of Stellar Performance
In today’s business world, the pressure for financial performance has created a supercharged atmosphere in which the only goal seems to be to make as much cash as fast as possible. Few industries have changed under this pressure as much as the advertising industry.
Industry professionals are caught in a crossfire between clients who demand ever increasing return on investment (which generally means lower price) and their own managers who seek ever escalating revenues. Today fewer people are doing more work than ever before and earning less. The resulting pressure has taken a lot of the fun out of a business that was traditionally focused on delivering big ideas and powerful solutions.
The problem has been exacerbated over the last fifteen years as the ad agency business has gone public. Estimates vary, yet most agree that over
No Guts, No Glory – The Importance of Reaching Toward Big Goals
If you want to drive your organization to a higher level of success, here’s a word of advice: set some ambitious goals. No one ever unlocked the leadership capabilities, creativity and passion of their employees by asking for modest gains. Unfortunately in our “prove-it-before-you-do-it” ROI world, some organizations limit risk-taking and inadvertently penalize those who consistently think outside the box. The result is an organization as demoralized as it is bored.
In advertising, this propensity can be deadly. The best advertising people thrive on risk-taking because that’s where the big breakthroughs live. And breakthrough advertising helps build brands and profits. When the pressure to limit risk and drive down costs is overwhelming, it shows in safe, lackluster work.
Lou Tice, personal coach extraordinaire, reminded Seattle’s downtown Rotary last month that setting unrealistic, audacious goals actually increases the likelihood that the goal will be achieved. This may sound counterintuitive, but it’s actually good common sense. Those who set small goals never stretch and grow. So sacred cows thrive, people stay in their comfort zones, the quality of their work suffers, and they influence others to underachieve. Conversely, when people set outlandish goals, the only way they can achieve them is by changing the way things are done, moving into a new zone where innovation can flourish, and turning sacred cows into hamburger.
One of the most dramatic examples of the benefits of setting big goals can be found right here in Seattle. Several years ago, City Librarian Deborah Jacobs and Executive Director of the Seattle Public Library Foundation Terry Collings decided to dream big. In what became the “Libraries for All” initiative, her team set about rebuilding the entire public library system here in Seattle. Not content with providing a much-needed facelift to the facilities, they wanted to show the world that Seattle was serious about opening our doors to anyone who was hungry for information. Reaching this goal required better facilities, more resources for books and programs, and innovative thinking about the role of the library in the digital age.
An amazing thing happened. Their goal was so breathtaking, and the leadership so resolute about achieving it, that momentum started to build. In 1998 Seattle voters approved a $196.4 million bond measure, the largest library bond measure in American history. This funded construction of the new library buildings. Private support flowed into the foundation as momentum built and this provided much needed support to buy books and expand programs. As an icon of this bold, new initiative, the foundation hired the controversial Dutch architect, Rem Kulhaus, to design what has since become the new Central Library, a building universally lauded for both its architectural merit and for bringing the library into the 21st century.
When the Central Library opened, The New York Times architectural critic wrote: “At a dark hour, Seattle’s new Central Library is a blazing chandelier to swing your dreams upon. If an American city can erect a civic project as brave as this one, the sun hasn’t set on the West. In more than 30 years of writing about architecture, this is the most exciting new building it has been my honor to review. I could go on piling up superlatives like cars in a multiple collision, but take my word: there’s going to be a whole lot of rubbernecking going on.”
Today, every single community library in the Seattle system is being renovated or rebuilt.
And I’m sure it’s no coincidence that in 2005 we were named the “most literate city in America” by an annual Central Connecticut State University study.
Most people involved in this monumental accomplishment consider it a career-crowning achievement. It started as a goal that seemed too big to achieve, but teamwork, tenacity and out-of-the-box thinking brought this bold idea to its unabashed triumph.
With its unrelenting focus on ROI, corporate America may be crushing the kind of innovation that built our new Central Library. And what is particularly ironic is that bold action often provides a better ROI in the long term than a so-called safer approach. That’s why it’s incumbent upon those of us in advertising and marketing to make the case for risk-taking. We need to push back on the money people and request budgets that allow for innovation, and even the occasional failure. The more conservative, risk-averse philosophy may look sensible, but an approach that guarantees conventional thinking, bland solutions, and modest returns is far from it.
Bill Fritsch is president of Hydrogen Advertising, an award-winning, Seattle-based advertising agency emphasizing superb ideas efficiently produced. Reach him at 206-389-9500, ext. 224 or email bill@hydrogenadvertising.com. For more information, visit http://www.hydrogenadvertising.com.
How to Brief a Marketing Agency
A new client recently emailed us a brief here at Mano Design. It was very brief brief indeed. All it said was, “Can you write me some copy for a postcard?” Resisting the urge to write, “Dear Customers. Having a wonderful time – wish you were here. Love, The Client,” we asked him for a more detailed brief and explained why it was necessary.
Why Write a Brief?
Even with something as simple as a small piece of copy, a proper brief will save you time and money.
The agency will also have a better chance of getting the work right first time, so you get the quality of work you expect.
Plus, it gives you something to measure the agency’s work against; i.e. how well they responded to and met the brief.
What is a Brief?
A brief (sometimes called a ‘creative brief) tells the agency what objective you are seeking to achieve. It answers the ‘where are we now’ and ‘where do we want to get to’ questions.
Ideally, the brief should be a written one. It focuses attention and provides the foundation for your marketing campaign. The brief should be agreed by both you and the agency before work begins and it can to some extent form a sort of contract.
The length of the brief does not matter as much as ensuring that it contains key information and objectives. Tell the agency what the business problem is, what you wish to achieve and how you will evaluate success.
What Exactly Do you Put in a Brief?
The format of a brief depends on the task. A website creative brief will need to contain different information from one for a brand-building press ad campaign for example. However, below are some basic guidelines:
1. Project information
Include your company name, contact details, project name and project manager, brand or product/service name, agency name and date.
2. Background (where are we now)
Here, give background information on your company and your industry. Tell the agency about your product/service (including key attributes and benefits) together with the issues it is facing. Include information on past marketing communications campaigns and their results. Provide details of competitor activity.
3. Objectives (where do we want to be?)
Explain what you want to achieve, e.g. increase sales, improve awareness, raise response levels, etc. Try to make your objectives specific and measurable.
4. Strategy (how do we get there?)
Give details of what you want the agency to do for you, e.g. a direct mail campaign, a website, a brochure, etc. Explain how what you are asking the agency to do fits in with your overall marketing strategy.
5. Audience (who are we talking to)
Your objective is to get a response from your audience. Tell the agency who your target audience is. Define your audience(s) as accurately as possible and share any insights you have about them with the agency.
6. Evaluation (what success will look like)
How will you measure success? When will it be measured? Who will measure it?
7. Practicalities
Mandatories:
Is there anything that must be included; for example – offer terms and conditions? Are there any corporate identity guidelines? What legal constraints are there?
Timings:
What are the deadlines? What are the media booking dates (if applicable)? By when do you want to see creative concepts? Does the project have to tie in with dates of other campaigns?
Budget:
Specifying a budget up front will help to avoid reworking of solutions. If you are reluctant to do this, then suggest three budgets and ask the agency which they would recommend and why. Alternatively, ask the agency to recommend a budget.
8. Approvals (who signs off work)
This should be the same person who signs off the brief before you give it to the agency.
The time spent preparing a brief will pay off in the long term. The agency needs a starting point and to know where it is you wish to go. Your brief should inspire them and enable them to do their best work for you.
Copyright © 2004, Chris Smith
About The Author
Chris Smith is a partner in Mano Design ( http://www.mano-design.com ) – a Vancouver Design and Marketing agency.
US Justice Department Only Serves Dishonest Competitors in Business
It is unfortunate as a business person to learn that you cannot trust the Justice Department of the United States of America. What an incredible letdown it is as a business person to watch how they actually operate. Here is how it works; a small business person in an innovative company moving fast in the marketplace due to a strong founder with an entrepreneurial background starts to take business away from a competitor.
The larger business and competitor is watching their customer base slightly dwindle due to the new innovative market participant. Because the larger business has been in business longer they are able to have a little more political clout and have developed friends along the way. Perhaps they have friends who are Senators or Congressman; they make a phone call and the Senator or Congressman puts in a call to a regulatory Federal agency to check into the business of the new innovative company.
Once the regulatory body starts to investigate the new company they immediately send out press releases that they are investigating this company. The new company is considered to be fraudulent merely by the fact that they are being investigated, whether are not they did anything wrong. Often the dishonesty of business and politics mix in what one could only describe the very problem that Adam Smith had warned us about.
By having the smaller company investigated, the larger company does not have to innovate to keep up with the new market participant and may also continue as usual without innovating in the marketplace to compete with the changing market. This makes the old industry or business model even less competitive and stodgy. Eventually as this goes on there will be a market entrant that also has political clout and the larger company which could have innovative along the way to keep up with the changes in the marketplace will fall to the new competition.
The old company never had to fall in the first place if it had worked hard to compete in innovate along with the market changes. So in essence the dishonesty between senators and congressmen along with businessmen ends up costing real Americans their jobs due to layoffs. This has happened in so many industries that there is no need to even give examples. What is truly unfortunate is that in our nation we stand for capitalism and free enterprise and free markets. But the dishonesty and lack of integrity of our politicians and the United States of America Justice Department causes conflict with these free markets and ideals.
If there was truly a level playing field in the marketplace then these older companies would adapt as needed to compete. But instead they put up barriers to entry for new innovative companies and rather than by the Company out with their cash flow or rise up and compete and streamline their business activities they choose to cheat. Is this what America stands for? Personally, having been in business for 27 years and dealt with this situation many times I have something to say to those larger older companies. You gentlemen are weak, inferior and afraid to compete in the marketplace. You talk a good game about how great your company is but in reality you are pathetic.
It’s obvious to me so many of today’s corporations are in efficient, the bureaucratic and cannot perform up to the expectations on the consumer or customer and constantly misrepresent themselves at every level. It is unfortunate that our government allows them to do this and even helps them to be more in efficient. Of course any time government gets involved of course there is inefficient, as they cannot do anything right either. What a bunch of wimps.
There is no way that a modern-day corporation can impress me after what I have seen in the marketplace. The utter incompetence of some of the largest companies that we know about are nothing more than smoke and mirrors and only exist because the government protects them from real entrepreneurs who can perform day in and day out. I am completely disgusted with the dishonesty of the United States Justice Department and all the little regulatory agencies, which are under their umbrella. I am equally disgusted by the little Harvard MBAs, which graduate each year and cannot even get out of their own way. If they didn’t have the government covering their butt they would fall on their face.
Personally, I have been a guest speaker at many MBA programs at top colleges and universities around the country and I am always amazed at the ridiculous questions that business students ask and I wonder how well they perform in the marketplace on their own? Well, the fact is that they can’t and their MBA certificate is only used so that they can put it on their r
Waste Not, Want Not – Tough Talk About Direct Mail
Those of us in advertising and marketing collectively have the power to move entire markets. And with all power comes responsibility. One area that needs our industry scrutiny is the overuse of direct mail and the resulting waste of precious natural resources.
As I write my bills every two weeks, I fill two wastebaskets with unwanted solicitations, mostly from financial companies. Two factors are contributing to growth in the unwanted stuff in our mailboxes. The nationwide do-not-call list is growing by tens of thousands of households per month, and massive dollars are being redirected from telemarketing into more and more direct mail. At the same time, changes in bankruptcy law have reduced risk to the credit card companies and increased the volume of solicitations to consumers. The result is a growing flow of junk in our mailboxes that wastes our time and natural resources.
Like most people, I hated the barrage of evening phone calls from roofing companies, finance firms, charities, window cleaners, and publishers. (I often wondered if the advertisers who used this technique gave any thought to the damage this technique did to their brand names.) As annoying as the telephone calls were, the growing avalanche of direct mail is starting to worry me even more. As responsible citizens on planet Earth, do we really want to use our resources in this way? And as marketers, do we have a responsibility to carefully marshal our resources and to judiciously use each channel of communication to its best advantage? Shouldn’t we leave as little waste as possible?
Don’t get me wrong. I am not against the use of direct mail. Used appropriately, it can be a powerful tool. It is just plain awful marketing that bugs me, and this leads to incredible waste of our most precious natural resources.
As I write this article, I am preparing for a meeting with a small national manufacturing company that is looking for new advertising counsel. They just completed a very large national direct mail program to support sales leads for their dealership network with disastrous results. The program cost $250,000 and netted 250 leads and 30 new customers. This means that inquiries cost $1,000 each, and customers cost $8,333 each. The company makes about $600 in profit per customer and needs to be finding them for less than $300. Oops. Even taking out one-time creative development costs from the equation, each new customer cost over $4000. Clearly, this was a flop.
What is sad about this is that any professional in our business would have looked at the initial strategy and predicted failure. This was a case where direct mail was not appropriate for accomplishing the goals. There was no mailing list available that was targeted enough to warrant the very high per-contact cost of direct mail.
The advertiser was a victim of his own misconception of the power of direct mail. Before the tactic of direct mail was chosen, this advertiser should have evaluated all possible channels of communication available to him. This was a case where a combination of targeted national cable combined with a really strong dealer referral program on the Web site most likely would have yielded the results needed for the same test budget. And the advertiser wouldn’t have sacrificed a single tree in the process.
Direct mail has been oversold as a marketing tool, and it is time to start thinking about being far more judicious when we choose this medium. With the emerging Internet and the newly found television interactivity, direct marketers have better, more socially responsible ways to meet their goals. Those of us who make choices every day in the use of media channels should be more thoughtful about the impact our choices will make on future generations.
With all this, I am not too worried about the current glut of junk mail continuing. There is sort of advertising eco-system in place that will slow the process in a few years. The more people sign up for the do-not-call list, the more calls that will go to those who haven’t yet signed up. This will increase their unhappiness. This will increase the rate of sign-up for the do-not-call list. This will increase the amount spent on direct mail which will further fill our mailboxes. The more filled our mailboxes become, the more diluted the response rates and the harder it will be to make mail pencil out. So ultimately mail volume will drop.
Let’s help it along by only choosing this medium after a careful evaluation of all alternatives.
Bill Fritsch is president of Hydrogen Advertising, an award-winning, Seattle-based advertising agency emphasizing superb ideas efficiently produced. Reach him at 206-389-950o, ext. 24 or email bill@hydrogenadvertising.com. For more information, visit http://www.hydrogenadvertising.com.
How to Score Success
Imagine a sports event without a scoreboard. Makes you chuckle, doesn’t it? Sure the game is fun, but without the scoreboard you can’t know the progress or the winner!
Margaret’s Story
Margaret, the director of a social service agency, was desperate. Absenteeism was high, grievances were mounting, errors were rampant, and no one was talking about improvement. I asked her to name the one thing she would most like to change, and she said, “Morale. If we had higher morale, employees would be more willing to work on the other problems.” When I asked how she would measure morale, she said, “Smiles.” My suggestion was that we place a big scoreboard on the wall. We asked all the employees to keep track of the number of smiles they saw and give their totals to the receptionist at the end of the day. The results were charted on the scoreboard.
The first three days were awful: about one-half smile per employee. Then Margaret came to work in a garish wig and acted perfectly normally. No one mentioned the wig, but smiles were up 100 percent. Then, the receptionist wore way-too-much lipstick that was way-too-red. Employees made jokes about her sobriety and her personal relationships. Result: smiles were up another 200 percent. On the sixth day, four employees wore cowboy hats and used cowboy language all day long. People began to conspire to see how they could reach five hundred smiles in one day. It took only three more days. The place was full of weird hats, baby pictures, Internet jokes, and funny accents. After two weeks, the employees formed a High Morale Action Team (”The Clowns”). This team designed activities to keep people smiling. They instituted dress-down days and dress-up days, one-color days, and more. A year later, absenteeism was near zero, grievances were nonexistent, and errors were down by 83 percent.
Scorekeeping With Colleagues
List all the ways you’ve seen games scored. Use these methods with your work teams as you compete for prizes. Try keeping track of: Productivity, Speed, Quality, Work skills, Clients you contact, New ideas that you have shared, and Meetings that end early.
Let’s Reinvent the RFP Process to Work Better for All
If companies used the same process to hire chief marketing officers that they use when selecting advertising agencies, the wheels of commerce would grind to a halt. Imagine a CEO saying “We need a new marketing vice president. Call purchasing.” This is happening in corporate America as the advertising business is seen as a commodity entrusted to the lowest possible bidder.
Gone are the days when advertising agencies were selected on chemistry, powerful ideas, and personal insights that translate into industry defining work.
Today, among the last considerations are chemistry and quality of interaction between agency teams and client. Many clients are dictating price, service terms, and advertising strategy in a take-it-or-leave-it approach that leaves agencies scratching their heads.
“Advertising purchase decisions are often handled by corporate purchasing agents. The process is becoming ritualized around return on investment,” says Jim Copacino, founder of Copacino+Fujikado. “I don’t see this changing soon. The only way that agencies can combat this is to focus on creativity and their ability to demonstrate that powerful ideas can change consumer behavior.”
That’s tough to do when more advertising reviews often keep contact with agency people to a minimum. Good matches between clients and agencies used to be made by with a healthy dose of interaction between parties looking for the right talent match, expertise and fit. Agencies inspired to invest in learning a client’s business were greeted with an open door. Clients would form an opinion of an agency by the quality of the questions asked and the thoroughness used in investigating the opportunity.
Today’s politically correct advertising review process deemphasizes interaction. For example, my recent request for an input meeting with a potential client was met with this voicemail reply: “Send me your questions in writing, and we will respond via email to all the agencies. It would be an unfair advantage if we were to answer your questions in person.”
The process isn’t about being fair. It is about finding the firm best suited for the job.
If companies hired marketing leaders the way many select agencies today, hiring mistakes would be rampant. Several candidates would be expected to write complete marketing plans without any interaction with the company or its people. Research wouldn’t be shared. Budgets would be kept secret. Each candidate’s first meeting would be in front of several people where they would be expected to present their plan. Chemistry would be inferred from how the candidates present to a group.
Hiring success is not about skills alone. Attitude, chemistry, leadership skills, personality, building bridges between departments, personal charisma, and personal interest in the product or category are what matter most. This is why companies invest so much management time getting to know their top candidates and finding out what makes them tick.
When the right ad agency joins your team, revenues can escalate and market share can advance. To make the right choice, invest time and effort to narrow the list of candidates to appropriate finalists. Then, invest more time to get to know them in a way that will help you predict what it will be like to work with them over the long haul. Resist all temptation to make the review process an arm’s length transaction. Rather, develop a three-tier process that:
1) Allows you to look at many agency portfolios. The more the merrier. You will be surprised by what you see, and this will help you to develop a quality list of semi-finalists. And, by all means, don’t require submission of 100-page capabilities statements and financial details at this stage. Chances are the best agencies will decline participation. That won’t serve the process of finding superior talent to get the job done.
2) Provides opportunities for semi-finalists to present their capabilities. This should be an open process, inviting each agency to interact with you as they see fit. This will tell you a lot about working with each.
3) Narrows the field to no more than two or three of the most qualified firms. These are the firms that will invest their time, creativity, and resources into demonstrating that they are best for you. Part of the evaluation process should be to rate the way they gather information and how capable they are in gaining insight into your markets. Most of all, let the process be a bit messy. It will tell you a lot.
If clients and agencies alike would follow this process, we’d all be in a better position to do the best work of our lives, and what could be better than that?
If this column hits a collective nerve, let’s continue the conversation by phone or e-mail and possibly organize a seminar or webinar with industry leaders on the RFP topic for a later date.
Bill Fritsch is president of Hydrogen Advertising, an award-winning, Seattle-based advertising agency emphasizing superb ideas efficiently produced. Reach him at 206-389-9500, ext. 224 or email bill@hydrogenadvertising.com. For more information, visit http://www.hydrogenadvertising.com.