Here's a neat trick: hire an advertising agency that helps you reduce your marketing costs.
"I worked my way down Madison Avenue to the bottom of Manhattan," says Ken Currier, CEO of $20-million software developer Expert Software, based in Coral Gables, Fla. He auditioned about 10 agencies. "We would educate an agency about our industry, get one ad, and fight about it."
RDA International, a New York City agency, was different. Principal Michael Racz's motto: "Don't hire an agency to do anything more than you need. Most clients can't do the creative work, but they can do mechanicals." In fact, in the four years they worked together, RDA helped Expert set up an in-house department to produce the advertising pieces RDA developed. Here are some tips, based on their uncommon arrangement:
· Get to know each other. Expert sells entertainment software through Radio Shack, Sears, and other stores. To learn about Expert's marketplace, RDA attended industry conventions and subscribed to consumer and trade magazines. Meanwhile, Expert invited RDA staffers to attend company functions.
In retrospect, Currier says he should have also included agency staff in Expert's employee-training sessions, sent them company newsletters, and given them a mailbox on the electronic-mail system. For his part, Racz urges CEOs to learn more about the advertising process.
· Collaborate on strategy. RDA and Expert determined which marketing pieces to develop and limited their effort to package design and sales materials. If they disagreed over a package, they "had a healthy argument," relates Currier. "Neither one of you should dig in your heels."
· Bring jobs in-house. Currier gradually assigned staff to ad tasks and brought manageable projects in-house. RDA advised Expert on equipment and staffing, and designed sample formats to guide staffers. RDA tapered its monthly retainer and continued to provide backup until Expert was on its own.
Four staffers now develop marketing strategies, package design, and in-store sales materials for Expert's entertainment software. The cost: $250,000 a year -- less than the budget for an external agency. As for the results, Currier points to his "Lethal Tender" box design, redone in-house. The software has already outlived the usual one-year shelf life by five months. (For more on agencies, see "The Cautious CEO's Guide to Agency Hunting," this column, April, [Article link], and "How to Fire an Agency," this column, October 1991, [Article link].) -- Robina A. Gangemi* * *