24 March 2006

Selling Talent

We all need to keep in mind what we do. We can talk the buzzwords, we can say "we're partners" and talk about our capabilities. But at the end of the day, we sell talent.

If you lose site of this - everything gets very confusing, very quickly.

And the implications are serious.

First and foremost - this needs to drive HR practices. If we are selling talent, we need to be very good at identifying talent, aquiring talent, growing and nuturing talent and retaining talent. Our employees are not (and cannot be treated as) commodities. They are not interchangable and they are most certainly not replacable. Of course... this means we also have to be good at (and ruthless about) raising the bar and dropping employees who cannot reach goals. Just as it is critical to have the talent to sell - it is vital to eliminate anyone who is not salable talent. Not only are they not valuable - they also drive down the total value of the talent pool and reduce satisfaction for the true talent.

Secondly - it needs to profoundly affect the way that engagments are managed. The value of the business is the talent - and this talent cannot be obscured from the clients. Clients need to see and understand the value and this talent needs to be exposed to them on a daily basis. This is a scary idea to many companies - but is critical for success. It will also have the positive result of allowing for increased rates.

Third - it has some real impact on your financial modeling. Not only will this likely increase your rates, it will also likely increase your costs. It will also require you to move from a blended rate (if you're still doing this) to a fully exposed rate card.

Finally - doing this is likely to result in a dramatic change to your process. You're likely to have to become far more flexible about the way your develop and the way you stay engaged. Talent is unique - and you will have to be flexible to accomodate talent. In addition, it is likely that you will find that the best way to fully leverage this talent is to dedicate talent to an engagement (rather than have employees engaged on multiple client projects at the same time).

In a world where seemingly all products and all services are becoming commodities this sort of talent-based model is one of the only sustainable models. If you can couple it with a strong brand, excellent messaging and communication and PR and a good hook - you can not only survive - you can prosper.

15 March 2006

$10,000 is the magic number

I was reminded in a conversation with Geoff Katz yesterday about an old saw in the Web Development world.

Way back when, someone once wrote that, when you total up the true costs, a high-quality professional corporate web site costs $10k per page. It doesn't matter how you do it - it doesn't matter what kind of platform or technology you use... from Zero to the final, high-quality site will cost $10k per page.

Now... of course, as with all things that sound oversimplified, this is a serious generalization. But, none the less, there are a couple of things that I find very interesting about this statement.

First... the idea of "true cost." This is something that I think few people (client or service side) really understand. It's a hard thing to get your head around - but it's an important one.

To start thinking about "true cost" you need to understand all the actual costs that go into a site. So let's imagine that you need a 10 page corporate web site. Say it's a simple marketing site - pushing the message and the brand in order to create brand awareness, brand affinity and to create demand for the product. Say it also drives business leads to dealers for your product. Okay - so all of us in the web world can come up with some rough numbers on what we would bid to do the development. Now... you need to understand that that bid is not the "true cost" of the site. You need to add to that the cost of time spent by client employees - time spent defining the goals and the problem; time spent choosing a vendor; time spent managing that vendor; time spent managing internal stakeholders - the list goes on. Then we need to add to that the costs associated with the distraction that the development of the site causes. There will be opportunity costs associated with other initiatives and marketing goals that become de-prioritized. Then we have costs associated with hardware and software and additional third party vendors.

Okay... so we total that up. Now assume that the client has chosen a very, very skilled firm to do the development. Firms that are, in fact, good at this are also very expensive. In my experience, when we do the math on the above we will see that the $10k figure is pretty damn accurate.

Now... let's imagine that the client says "no way - that very skilled firm is 3 times the money of this other firm." And they take the low bid. At that point what we see is the internal costs to the client will increase - especially the opportunity costs. At the end of the project when we total it up we will see a number that is well below that $10k figure... but we will also see internal costs continuing to rise.... because the client is now working on fixing the sub-standard product. At this point they are likely either working with this cut-rate firm to re-do the site to get it to "high level, professional" status or they have gone back to square one and are doing new vendor selection.

In the end... the cost is the cost and is more often on the low end than on the high end.

Second Interesting thing... I can hear a bunch of you right now. "$10k per page!!! Are you crazy? I can buy a copy of Photoshop and a copy of Dreamweaver and have one of my IT people do the site! My daughter has her own web site! It's only a damn web site!!!"

Let's cut right to the chase.

There are web sites -- and then there are Web Sites. The two are not equal. Just because you signed up for some cheap hosting and used MS Publisher to create some bad HTML pages doesn't mean you have a Web Site.

What you get from the cheap end is what you pay for. If you look at the "true cost" model above you will see this. But more importantly - you need to think about what a web site really should be. It's not - at least not anymore - some bastard stepchild of marketing and IT. It's not a little weird thing in the corner. It is an integral part of your business. It is an integral part of your messaging. It is a key touchpoint for your brand.

Would you give your teenage son a DV cam and Final Cut Pro and have them do your TV ad campaigns? Would you let your exec asst handle your PR efforts? If you did - would the money you saved be worth it? Would you think that the results would have a positive effect on your business or a negative one?

If many businesses approached space planning the way that they approached web sites their staff would be sitting on milk crates in an unheated concrete room and sales people would meet with customers at the Greyhound Station.

Every touchpoint for your brand is critical. You need to own each one. There needs to be strategy and their needs to be synergy. One weak touchpoint damages all your efforts. As we used to say in the cooking world "the end product is only as good as the weakest ingredient."

This is why you pay $10k per page. Because without doing so the money you're spending on all your other efforts goes to waste.


Over the last couple of weeks I have had the opportunity to spend a lot of time with some clients. I know this is, basically, what we all do - but in this case it was a little different.
Let me explain...

Usually, when we spend time with clients we are talking about either "the relationship" or "the work." In addition, there is usually a lot of pressure to stay focused as the clock is always ticking.

But this was different.

Case One:

We've been working with the folks at Freightliner for a number of years now. They're a very good client and it's been a good relationship. A couple of weeks back they had an internal Marketing Summit. Marketing folks from all the various business units - with all sorts of backgrounds and job responsibilities - gathered in Portland for two days. The idea was to do a couple of things. First - to get everyone on the same page in terms of where marketing for the company as a whole was going. Second - to get everyone aware of who the other folks in the company are. Third - to start the process of people being able to help each other within the company.

We, along with a few other selected vendors, were invited to sit in on these meetings and presentation.

It was incredibly valuable and actually very exciting. I learned a huge amount about the vision for the company. I gained priceless insight into the realities of the business. I started to get an understanding of the culture and the structures of this business.

In the end I walked away impressed and with a ton of ideas swirling in my head. I was energized and feel like there is so much potential in the business - and in our relationship. There is so much that we can do to help Freightliner reach for this vision now that I know what the vision is and what the business realities are. I understand the constraints. I'm starting to understand the people...

All I could think afterwards was "this is something that all clients should do." Not just have this sort of Summit - but invite key vendors. The only cost to them for having us there was the catering. We didn't charge for our time. And in the end - everyone is going to win.

Now that is "best practices!"

Case Two:

And then last week I went to Las Vegas to spend some time at the Bryant Heating and Air Conditioning meetings. Bryant is another great customer of ours. Great people, great projects.

At the meetings I spent a bunch of time working the booth on the tradeshow floor. I was working the Bryant.com booth in the Programs section of the floor. As a result, I had the chance to not only watch people interact with the Bryant.com site - I had the opportunity to talk with them about the site, about their needs when it comes to the site and about their businesses in general. I also managed to spend time eating lunch with these customers and even went to a bunch of seminars.

I was already pretty well versed in the business of Bryant thanks to our clients there. But this was eye-opening none the less. Spending time observing the real customers - getting the chance to ask them questions and listen to their issues and their challenges and their dreams.... This was a truly priceless opportunity for me.

I learned an enormous amount about the business - from an entirely new perspective. The perspective of the customer. And that, my friends, is obviously the important perspective.

Cost to our customer - minimal. Value to them long-term - priceless.

Again... this is truly "best practices."

Lesson learned from this... clients - involve your vendors. Vendors... get involved with your clients' businesses. Step back from the "projects, programs, work, relationship" bunker mentality.