Wednesday, April 28, 2010

Organic Growth

Earlier in the week, I suggested that there are three sources of growth for your public relations firm: 1) New clients 2) Organic Growth 3) Client Retention. In my last post titled: Why Did You Lose A Client?, I offered a blame-free, open approach to exploring why some client relationships go bad. The primary objective of such an exploration is to learn - to learn how to pick clients who are a good agency fit from the start; how to identify signs of eroding trust; and how to provide the level of client service excellence that inspires clients to stay with your firm. Winning new business is important, but if you are just replacing revenues from lost clients or shrinking client workloads, it can make the hamster wheel look inviting.

I've been reading quite a bit of Peter Senge's work lately, particularly about Systems Thinking, which he defines as "seeing interrelationships rather than linear cause-effect chains; and seeing processes of change rather than snapshots." A linear thinker would tend to look at agency revenues/growth as a linear equation:

New Business +Organic Growth+Client Retention = Agency Revenues/Growth

I put "New Business" in bold because most agency leaders regard it as the primary driver of agency growth/revenues which is why business development/prospecting receives so much attention. One can't miss the linear cause and effect; it makes perfect sense. Right?

Using a systems model, I might look at it this way:

Rather than invest so heavily in business development (prospecting) initiatives, I would focus primarily on Client Service Excellence. When one looks at how most PR leaders think about agency growth (linear thinking), they don't see client service as a growth driver - which is why in most agencies it receives such little attention and why a systems model can be so illuminating. The cause and effect of investing in client service is neither as obvious nor as immediate as traditional prospecting. In this diagram, you not only see the relationship, but also you discover its reinforcing nature. Client service excellence will lead to better client retention, more organic growth, a reputation that will attract new clients, and strong revenues and growth that will allow you to reinvest in your client service program...and so it continues.

Since organic growth is arguably the strongest metric you have to measure client service excellence, then think about one change you can make tomorrow. Celebrate the expansion of an existing account with the same exuberance as you do when a new client joins your agency roster. Show your team that organic growth not only matters, but serves as the ultimate compliment to your effectiveness as a firm.

To be clear, I'm also a huge proponent of prospecting as a business development tool - but just imagine if while you were prospecting, you were doing so for an agency which enjoyed a reputation for delivering the world's best client service. For my money, it wouldn't even be a fair fight!

No comments:

Post a Comment


Blog Widget by LinkWithin