I’m often asked what I believe the year ahead holds for
creative industries, and this is often followed by a second question -
what can be done to remain strong in the tough economic climate we are
experiencing?
It may sound rather absurd, but my advice is to think inside the box during hard times.
I’ve worked in more than 20 countries over the past 12 years and helped
hundreds of creative companies to grow. It’s vital creative leaders get
smart, take a detailed look at the sources of business, and adopt a
more tactical approach to winning new contacts.
Economic conditions are tough and if you’ve relied on hard work and
enthusiasm to get results, it’s likely you’re not seeing the same level
of results now. When work slows down there can be a knee-jerk reaction
to go off in all directions chasing new business, but it’s not just
about getting new clients, it’s about getting the right ones.
Right now the average lifespan of a SME in the UK is just 24 months,
which is why it is so important to take the time to evaluate your
business and work more strategically. By focusing on a just few key
areas you can not only survive the recession, but emerge stronger when
the economy recovers.
One common flaw I often come across is where creative enterprises
haven't fully evaluated their position in a competitive market place.
Even if you’re really good at what you do, if several others are better
still, it's going to be difficult. So look around and identify the
goods or services at which you excel in relation to competitors. In
this way you can find your competitive advantage and a profitable niche.
It’s also important to remember that marketing isn’t just about winning
new clients. Many businesses are so excited by the prospect of finding
totally new customers that they overlook existing ones. It's much
easier to keep your existing customers and win more business from them.
Your current and past customers are also the best marketing department
you'll ever have so look after them!
Here are my top tips for success in the creative industries:
1. Focus your financial goals on profit not turnover. As they say, "turnover is vanity; profit is sanity".
2. Identify the goods and services you excel in over and above your
competitors to find your competitive advantage and a profitable niche.
3. Remember business takes place between people, not companies. Don’t
hide your people, show them off by giving contact names on your
websites and marketing materials.
4. Cash is king. When winning new business check credit references and
ask customers pay a percentage upfront. A customer who doesn't pay, or
even one that pays late, can cripple a business.
5. Marketing is not just about winning new clients. Look to your existing clients as a source of further business.
That's what I think when a website invites me to contact "info@abc.com" instead of a named person. Are there real people in there? If so, why are they hiding?
Customers want to do business with people, not with a website. As a potential client, I want to know who you are before I'll do business with you. (So do you - just watch yourself when you are a buyer rather than a seller.)
It doesn't matter much if I'm buying stationery supplies or other commodities, but if I'm buying a service I need to know that I can do business with you, that I can trust you, and that I like your style.
And if I'm buying a creative product I'd like to know something about the creator, their inspiration and creativity. As a customer I want to buy into you, not just your products. (See: What are you selling, really? )
Word of mouth marketing works so well because happy customers tell other people about your personality as well as your competence. But this 'personality' is much harder to get across on a website. Customers need to like you as well as respect you. Presenting your creative enterprise as a professional but faceless corporation to get them to respect you more, has the downside of making it even harder for them to actually like you.
I'm very much in favour of professional presentation, but pretending you are a huge company when you're a small or medium sized enterprise ultimately kids nobody. If they are going to do business with you, they will have to respect and like you for what you actually are. Sooner or later you'll have to 'come out', so why not do it sooner rather than later to save everyone's time? If you think some people won't want to do business with you because of your age, gender, nationality, race, location or personality - you might be right. But by the same token, other customers will love you because of what you really are!
So don't hide your people and the personality of your creative business - show them off!
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Let's publicise creative businesses who are doing a good job of showing off their people and the personality of their enterprise. Publish your links, opinions and experiences on the Creative Enterprise Network.
The most successful creative entrepreneurs deliberately alienate those customers who don't matter in order to more strongly embrace those who really do matter.
Not all customers are good customers and marketing is about choosing the right customers; it's not about trying to please everyone. Of course this means you have to choose which customers not to deal with. It's scary to deliberately turn your back on potential customers - but not if you end up facing the right ones and then have the time, energy and resources to serve them wholeheartedly.
Alienating the wrong customers isn't a matter of being rude or unprofessional. Put your prices up and unprofitable customers will walk away; ask for a percentage of the fee upfront and the non-payers won't sign the contract; shout loudly about your values and the people who don't share them won't knock on your door (but those who do, will).
So your marketing strategy involves deciding which types of customers to alienate so you can really embrace the right ones.
Read more about how to market creative businesses in the free eBook version of 'T-Shirts and Suits: A Guide to the Business of Creativity'.
My aunty is 85 years old and recently she got a new digital TV with
a Sky Box. I was showing her how to use the remote control and I
said, “Look at this. Imagine you’re watching a TV programme and you
want to take a break or make a cup of coffee. All you do is press this
button and the programme stops.” And she looked at me, in all
seriousness, and said, “But what about everybody else?”
What that illustrates is the mindset of somebody who was brought up in
the last century, whose social habits involved going to the cinema
to watch, with everybody else, at the same time, the same films. And
even more recently we all watched TV at the same time. Whereas younger
consumers expect to be able to record a TV programme to watch later, or
to watch it on the internet. For shorthand, we might call these ‘old
consumers’ and ‘new consumers’.
In the age of Web 2.0, the interactive web, what we are witnessing is a
fundamental and irreversible shift in the balance of power in favour of
consumers. We no longer have passive consumers who are told what to
watch, when to watch it, how to watch it - but a new breed of much more
informed, demanding, tech-savvy and communicative consumers.
Consumers are no longer passive. They are creators too. Consumers are
also acting as marketers and even as financiers. Technology has enabled
this shift in power, but it’s consumers who are driving it and becoming
much more powerful. So we need to understand the new economics of the
age that we’re living in and this underlying shift in power – a shift
which makes things in some ways more difficult, and yet also brings new
opportunities for entrepreneurs.
Business models that deny or resist this shift in power are doomed to
failure. And that includes many established businesses that are stuck
in their ways, who will not or cannot change. They won’t change because
they’ve invested so much in the old way of doing business: their
assets, financial structures, their mindset, their skills, their staff
and their whole way of thinking is based on an outdated assumption that
customers are passive and can be treated as one mass.
At the same time, on a positive note, new business models that embrace
the fact that consumers are now ever more powerful will succeed. As a
business adviser in the creative sector I am helping creative
entrepreneurs in the UK and world-wide to develop innovative ways to
create profitable business models based on the new opportunities to
engage with powerful customers.
The most successful creative businesses in the future will be those which follow this approach.
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This is an edited extract from a longer article based on a speech by
David Parrish to a conference of TV producers in Finland. To watch the
video of this speech online, visit: www.t-shirtsandsuits.tv
I'm interested in your experience and looking for case studies about creative businesses working together. - What were the challenges? - What were the solutions? - What's your advice to other creative enterprises considering collaborations?
Customers are more powerful than ever. Because of changes in technology, particularly the interactive internet (Web 2.0), there has been a fundamental and irreversible shift of power in favour of consumers.
The bad news is that businesses that deny or ignore these changes by continuing to regard customers as passive targets will fail.
'New Business Models in the Creative Industries' was the subject of my keynote speech to the Media and Message conference of indepedent TV producers and media professionals in Finland.
We need to be innovative about how we do business and devise new business models centred on demanding, talkative and creative customers.
Presentation by David Parrish at Media & Message, Finland. Watch the video here (if the embedded video above does not play) [or go to the Media & Message site and click "Puheenvuorot" (speeches). It's the last one.]
Thanks to Natalie Bolton from Lion Eyes Television for telling me about this amusing video.
It's fun to watch - and it raises some important issues about pricing and customers for creative businesses and cultural enterprises.
If customers believe they can get a discount from you, it's because they think they can go elsewhere and get the same thing cheaper. If they can in fact get the same thing cheaper elsewhere, then you are in a marketplace with lots of competitors offering similar products or services, all competing on price. So you are in a poor negotiating position. It's a losing battle.
Instead, build your business around those goods and services at which you excel in relation to the competition. Better still, focus on your uniqueness, providing goods and services that nobody else can. Customers will then have nowhere else to go and your negotiating strength increases dramatically.
To do this requires an understanding of your competitors and your market positioning. It means that you need to choose your customers carefully, selecting those people who want what you can uniquely offer.
So be prepared to say No when people ask for a discount. Only the wrong kind of customers will walk away, which is good because you can never build a thriving business around them. The right kind of customers - the ones who recognise the how special you are - will pay the price. These are the kind of customers to build your creative enterprise around.
- What's your business policy when it comes to giving discounts? - Do you know how special you are? In other words, do you know at which products/services you excel in relation to the competition? - Do you target those only those customers who want what you are especially good at?
It's only when you have devised your own unique business formula, based on your speciality and your special customers, that you can say No to customers asking for discounts.
Although I'm a business adviser, I rarely give direct advice to the creative entrepreneurs I'm helping. Instead, I help them to reach their own conclusions by asking questions, providing information and guiding them towards the kind of success they seek to achieve.
There's no shortage of advice. Often my clients come to me with an abundance of ideas, plans, schemes and tactics. They are weighed down by advice that has been heaped upon them by well-meaning colleagues, friends, relatives and professional advisers. It's easy for people to suggest good ideas but the effect is that the person receiving the ideas ends up with a to-do list which is impossibly long. Then they either burn out or just feel overwhelmed.
My job is to help them sort it all out and select the ideas and advice that fits best with their overall objectives. By helping to remove the burden of too much advice, I can help them to focus on the few important things that must be done next in order to become even more successful.
When people offer you ideas and advice about developing your creative business, I suggest you do two things: 1. Thank them sincerely - because no doubt they mean well. 2. Add it to your list of things to consider - but not necessarily a list of things to actually do.
Since they want to be helpful, you could also ask them which of the things already on your to-do list they suggest you remove - to make space for their idea. It's a tough question!
The art of developing a creative enterprise isn't just trying to do more and more - it's about intelligently selecting the best things to do (and therefore actively deciding what not to do) in order to prioritise and focus energy and resources on the most important things.
We don't need more things to do. We need to decide which things are the most important things to do.
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Comment on this blog post on the Creative Enterprise Network. (It's free to join and easy to promote your enterprise with links, photos, videos, etc)
The Creative Business is a series of 12 modules of information about developing creative enterprises, written especially for people running businesses in the creative industries.
The information is particularly relevant to creative businesses and cultural enterprises in the fields of Advertising, Literature and Publishing, Visual Arts, Performing Arts, Music, Design, Cultural Heritage, and Crafts.
Published on the Creative Choices website, this series of 12 articles covers a range of business issues facing creative entrepreneurs:
