What Agencies Can Learn from The Velvet Underground

On a rainy Sunday, I was watching Apple’s documentary on The Velvet Underground—one of the most influential bands in rock, underground, experimental, and alternative music—and this quote struck me. “Antagonistic”—such a compelling way to think about positioning, and it’s the exact opposite of how most agencies consider their own brands.

By definition, positioning yourself is just as much about who you are not, as it is about who you are. But it is ingrained in us, agencies, not to turn away any business. We love pushing clients to be compelling, interesting, even provocative sometimes, but we tend to avoid doing it ourselves for the risk of closing doors to potential business.

This made sense considering the old way of agency marketing. Traditionally, most agencies relied on their reputation and client work to drive inbound opportunities. New business was often an “order-taking” exercise of reacting to interested brands and consultants. In this environment, it made sense to maintain as broad a positioning as possible so that you could adapt yourself like a chameleon to any opportunity that walked in the door.

But robust inbound retainer opportunities are not walking through the door as they used to. And even if they do, they are now more vague, less valuable, and require just as much effort to win. According to R3 data, US Pitch volume was flat in 2022, but collective pitch value fell 38%.

“The Pitch” that most agencies positioned themselves for simply isn’t there anymore.

The rise of projects

As part of a general trend in mitigating risk, clients have taken many steps to take more control over their marketing practices, with one particular trend being in-housing. For most of my career, I benefited from acting in the “lead agency” role where you worked directly with clients to develop the high-level strategy and coordinate with key partners from across disciplines to execute the work. Much of that high-level strategy and integration work is now happening in-house, and most agencies are serving more specialized roles.

This has corresponded to a shift from retainer work to project engagement models. While a nice, meaty retainer is always good to have for any agency, I truly believe that project work is actually more equitable and fair for everyone involved. Traditional retainers are secured through pitches, which are rooted in the financial assumption that investing tens, if not hundreds of thousands of dollars in a risky pitch is worthwhile because you would make that money back over time. But this often leads to the agency’s value proposition getting worse over time as it can’t invest more in that relationship. Which, in turn, contributes to eroding and reducing the duration of client-agency relationships.

This feels very much like a recipe for mediocrity—agencies draining themselves to death to win a pitch, then delivering what they can with the few resources they have left.

On the other hand, project engagement models don’t come with such baggage. And they also present a few unique opportunities. Client-agency relationships are now less monogamous, meaning there is much more opportunity to open a new conversation with a potential client. And, for this purpose, projects are a viable alternative to costly pitches. They allow developing client relationships, sometimes even becoming that desired retainer. And without the hefty upfront investment, agencies can actually invest in these relationships over time, improving the prospects of a lasting partnership.

But developing and winning these project opportunities requires a new approach that is uncomfortable for most agencies. To a large extent, this is because it requires agencies to have a much clearer and specific positioning. To actually pick a lane. Clients hire agencies for projects when they think they can get something better, faster, or cheaper than they can do themselves. Better, faster, and cheaper are all outcomes of the agency’s experience and expertise. More than ever, agencies need to build a case that they are better suited to deliver this value compared to any other agency or in-house team.

How do you do this? The process starts from the inside out.

“You are what you eat”

This is one of my favorite phrases I’ve heard in the world of new business, and I wish I could remember who to credit it to. Whether you like it or not, your positioning is largely driven by the type of work you are doing today, and who you are doing it for.

This is because today’s pressured marketing clients, when searching for a new creative partner, rely on specific filters of relevance such as consumer understanding, category experience, specialized expertise, personal relationships, and physical location. Your agency’s positioning will be, to a great extent, a reflection of its track record in all these five areas. And each client you decide to take on is moving you either towards the direction you want to go in, or further away from it.

However, an agency’s positioning can also be influenced by “softer” parameters. Last year I had the opportunity to meet with the executive team at GUT in Miami, before the agency was named AdWeek’s Breakthrough Agency of the Year. Their positioning wasn’t rooted in a particular category or service type, but rather a mentality: bravery. They were seeking clients who aspired for breakthrough work, and by declaring this intention upfront, it set the tone for difficult conversations in the future when it came to selling and approving this type of work. They actively looked for individuals who had demonstrated bravery in previous roles, and sought to partner with them to establish this mentality in new organizations. Taking on risk-averse clients would actively work against this positioning, and create a disconnect with the internal teams who had signed up for something different.

So, how do other creative agencies arrive at a clear, specific, and ownable positioning that resonates with their desired clients?

Defining your position

In order to define a tight positioning, it’s equally important to have a firm understanding of who you are today, as well as a vision of where you want to be tomorrow. Your positioning ultimately serves as a bridge between today’s reality and tomorrow’s vision, and there are several steps that we at Sail go through with agencies to help them through this process.

1. Align the leadership on a shared vision
2. Review internal data
3. Talk to your customers
4. Get an outsider’s perspective
5. Review the competition

Let’s go through each of these areas.

Align the leadership on a shared vision

How aligned are you with your co-founders and partners regarding who you are today, and who you want to be tomorrow? We help agency leadership dig into these critical questions, and oftentimes the answers are surprising. Just like in many marriages, relationships between agency partners can be filled with many assumptions that take the place of open and honest communication. Getting help uncovering these and identifying gaps in vision is a key starting point in the process.

The drafting of the final positioning statement is closely tied to this first step, as a unified leadership team needs to sign off on it. However, it should only be done after the team has gone through all the other steps and has gathered all the necessary information.

Review internal data

If you have been operating for a number of years, you likely have a surprising amount of internal data that you haven’t tapped into yet. This data can be quite revealing regarding your current areas of strength and credibility. Some of this data includes:

• Past clients
• Awards & Case Studies
• Client experience within current staff
• Pitch success rates by industry

We help agencies organize and structure this data in a way that can reveal key insights, and also serve as a tool in prospecting new clients based on areas of strength.

Talk to your customers

How do your own customers perceive you? If they were to write a positioning statement for your agency, what would it look like? Having an outside consultant help engage in this conversation with your clients can be an illuminating process to better understand how you are perceived by those you work closely with.

Get an outsider’s perspective

In new business, success comes from how other people perceive your agency, namely potential clients. To create a winning positioning, it’s thus crucial to see your agency from the outside, just like any potential client would.

So what do prospects, search consultants, trade press, and prospective employees think about you? Are there any legacy perceptions from your past that have stuck with you?

The answers to these questions, when gathered consistently and structured well, become a strong reference.

Review the competition

Just like with any client project, having a baseline of competitive understanding is key. What other agencies live close to your current positioning, as well as to the positioning you want to own tomorrow? Who are the aspirational examples of who you would like to be considered alongside?

With all this information in hand, your leadership can properly align on a promising positioning. Not only do they have the chance to align between themselves, but to adopt a view that is backed by all the key players. A positioning that enables your agencies to win in the market.

And how do you know your positioning is not one of those fluffy, all-encompassing statements of the past?

Simple. Based on all your knowledge, can you say who you are not? Are you clear enough, specific enough, relevant enough in how you formulate your “right to win” to be able to articulate what you don’t want to do, even if this means turning down money?

Coming back to John Cale’s words, are you antagonistic enough to be able to build something truly great from your positioning?

In conclusion

“Positioning” remains essential for how creative agencies market themselves. However, while this hasn’t changed, the nature of a winning positioning has changed in recent years.

Creative agencies now need to have a clear, specific, and ownable positioning that resonates with their desired clients. And this positioning can only be built using an inside-out approach. Going through five clear steps—align the leadership on a shared vision, review internal data, talk to your customers, get an outsider’s perspective, review the competition—we help agencies uncover their true “right to win” in today’s market.

Define your winning positioning


Sail can help you define your positioning. Take our free new business assessment today, and we can schedule an introductory session to get started.

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Sources

• https://www.adweek.com/agencies/holding-companies-put-long-term-plans-on-ice-amid-economic-confusion/
• https://adage.com/article/agency-news/agency-reviews-cost-over-1-million-average-study-finds/2504701
• https://www.adweek.com/agencies/gut-is-adweeks-breakthrough-agency-of-the-year-2023/

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