Scaling up? Accelerate your marketing strategy with Thomond
29 March 2016
Thomond brings a new approach to the traditional marketing agency model, focusing on helping high growth businesses identify what marketing strategies and tactics will make a tangible impact at each stage of their growth cycle. Jennifer Dickie meets Jonathon Bates, co-founder and Head of Strategy at Thomond.
We launched Thomond to ensure that high growth businesses can get transparent and effective marketing advice and executional support, which ultimately gives them the best chance of driving sales and making a measurable difference.
Having worked in marketing for over a decade with both major multi-national brands, as well numerous exciting start-ups, we felt the industry has failed to adapt to the needs of high-growth and fast-growth businesses. When you look at other service providers such as legal and IT advisors, many have created innovative and flexible products that both provide consultancy on what services a business really needs and then the framework to scale up as that business grows and encounters new challenges.
An issue with traditional marketing agencies is that more often than not they expect the client to give them a brief, which therefore requires the client to clearly know what marketing strategy and tactics are best suited to help them grow. That’s fine if you’re a big established company, and you’ve got a very sophisticated marketing department that knows how to write a brief, but most fast-growth businesses are so consumed with running their business, they don’t necessarily know what sort of marketing they need. The analogy I often use is that I know what I want out of a contract, however I haven’t a clue how best to do this. Therefore I look to my lawyer to give me the consultancy for what structure legal agreement we should be looking to achieve, and then advise me how best to execute it.
The traditional marketing agency model doesn’t always give this level of consultancy. Instead what tends to happen is that they take away the brief, don’t really challenge whether what they are being asked to deliver is going to drive measurable growth and then work out what profit margin they can make on elements within the brief. There’s nothing wrong with this approach, because ultimately we’ve all got to make a profit margin on what we do, but the problem is, quite often agencies are selling clients something out of their toolkit, which might not necessarily be what will be best for the fast growth business. Also because of the nature of fast growth business their requirements may change every couple of months, therefore they need a very nimble support service which will be able to evolve to suit the growth.
Working with both established SMEs as well as Venture Capital and Private Equity-backed businesses, a classic example of the sort challenge we encounter is when a client is launching a new product or service. This may mean that the most important thing for them to do may be to optimise their website so it most effectively converts any traffic that is driven to the site. However, the client may well have been sold a 12 month PR campaign which uses up all their budget. This means they get great coverage but when people are driven to the website the potential customers get a poor experience which fail to convert into sales, leaving the users with a bad perception of the product or brand. The brand is then unable to fix this quickly because all their budget is tied up in PR which is actually having a detrimental effect.
What we try to do with Thomond is take a far more entrepreneurial approach and work in a more consultative way with the businesses. We try to understand what the business KPIs are, and most importantly, what the business challenges are. We need to try to understand what a client’s budgets are, but for us, it’s more important to try and understand things like the cost per acquisition model, the lifetime value and retention rates. If we can understand those things, then we can help them build a marketing road map.
Someone will come to us and hopefully leave with a very clear strategy of what’s going to get them to where they want to be in eighteen months’ time. For us there are two key things to the business; it’s about transparency, which is always providing people with a service that is actually going to make a difference, and actually making a difference. That’s why we set up Thomond.
I think the biggest challenge is only taking on enough work you can really deliver on. We are creating a different business model to other marketing agencies, therefore it’s critically important to be able to prove it. Therefore the absolutely vital thing for us is to deliver on what we say we’ll do. Every business needs marketing because every business is selling a product or service of some kind. I come from a strategy background, so can very quickly identify an area of a business that can be improved upon, whether it’s increasing sales, or, increasing conversion and retention rates. In the early stage business sector, there are so many great ideas out there, it’s very tempting to try and work with all of them.
There are a lot of factors that go into making a business successful. For us, identifying the businesses that we want to work with is about having confidence in the management team that they can deliver and scale up at the pace that they want to and that they have the competencies within their own staff and their own structures.
I think the biggest challenge for us is that our message resonates with a lot of people, so it’s case of not taking on too much, so that we dilute our own product.
What is your vision for Thomond? Where do you think you’ll be in five years?
Our vision is that we want to be the default marketing agency for any fast-growth business. There are two routes to market for us. One is business owners; we want business owners who have got a proven business model, and are looking to scale up quickly.
On the other side of the equation are investors. If we can build partnerships with the Venture Capital and the Private Equity firms, they’re a great source as one relationship can bring you five new clients a year.
We want to get to a position where people are pitching to us to work on their brands. When we started to move into this sector, and started to learn more about the Private Equity and Venture Capital model, there was a lightbulb moment. I thought “They’ve got a fantastic business model and everyone’s just coming through the door, pitching to them.” We’re trying to flip the model on its head, it won’t happen overnight, but if our reputation is such that people know that we make a tangible difference, then hopefully the line of people wanting to work with us will continue to grow. In five years’ time I’d like to have the reputation amongst both business owners and investors that if they want to ensure their businesses get the best advice and support in driving growth, they need to come to Thomond. Then, ideally, I’d love to have a subdivision or wing that does some seed investment ourselves.
What advice would you give to start-ups on their marketing?
I think there are three key things to consider with marketing; the first is about understanding your audience. Marketing should be very simple. The more clearly you understand your audience, the easier it is to work out what channels are available to reach them through, and most importantly, how to communicate with them. Successful marketing should be built on the basis of, ‘What’s in it for me?’ So, you understand your potential audience’s pain point, and you solve that problem for them. I think the danger, for a lot of entrepreneurs and fast-growth businesses is, because they’re so close to the business product, as they’ve ultimately invented it, they talk in terms of what the product does, not in terms of what problem the product solves.
The second key thing that businesses need to do for marketing is to have a strategy. It sounds very obvious, but I think most businesses that we come across have objectives and tactics. Their objectives might be more footfall into their shop, or more people onto their website, but there’s no strategy keeping them on the straight and narrow. If you have a strategy, you can try lots of different executional tactics, but your vision and your strategy focuses on one clear direction. It gives you the confidence that, when some things don’t go so well, you don’t just abandon ship and lurch from one thing to another. I think a lot of businesses waste a lot of time, money and effort by jumping from tactic to tactic. Quite often, good strategies have the word ‘relevancy’ or ‘relevant’ in them. It’s all about making your product relevant to that audience, and if you spend a bit of time to work out the strategy, that will help.
The final element that people need to focus on with their marketing is to view marketing as driving leads and converting those leads. Whenever you do marketing, think about driving sales. You want to have the mind-set that marketing is about finding, winning, keeping and developing. So, it’s about finding your customer, understanding what channels you can reach them through and winning them. If you understand how to win them, you can build your cost per acquisition model.
Once you have converted a customer it’s about keeping them, a lot of people spend a huge amount of time and effort winning a client, but then don’t do enough to retain them, and then it’s about developing a client.
Do you think the UK is a good place to start a business?
I think it’s an excellent place, there are a lot of really good initiatives, for start-ups as well as scale up and fast-growth businesses, with initiatives like Start-up Britain. There’s a great support network here. If you’ve got a good idea, or a proven business model, whether it’s through peer-to-peer networks, crowd funding, traditional venture capital or even private equity, there is good access to money.
I think the challenge for businesses is knowing where to get all this advice, because there is so much out there. I know that probably sounds a bit contradictory, but sometimes you can be spoilt for choice. If you search ‘fast-growth’ or ‘support’ on the Internet, there are now dozens of online blogs, websites, magazines, and they all give great advice, but entrepreneurs are time poor, and sometimes, it can be slightly intimidating. Overall though, I think it’s a great place to be.
We’ve talked already about how you’ve got some really great people on board. How did you attract them in the first place and how are you retaining them?
Staffing up is definitely a major challenge, particularly for a service industry like ourselves, because you’re only ever as good as the people that you employ. For us, we’ve been very lucky in that we’ve got a very strong vision and values which helps us to come across as an exciting place for staff to work for and attract great people.
There’s an awful lot of choice for people in their careers. People look to move far more often now. The challenge for any business is to get itself heard in a marketplace. Just as you’ve got to get your product heard to be able to sell it, you also need to spend quite a lot of time and attention on promoting yourself as a great place to work.
You need to always think about your staff. You’ll always need to be thinking about how you can scale up. If you want to bring in great staff, you’ve got to be thinking three to six months ahead, because they’ll already have jobs if they’re really good.
It’s got to be a place where people want to spend eight, nine hours a day working. It’s got to be a culture which they enjoy. The modern trend is to have funky offices, sofas and coffee machines, but I think, that’s very surface level. It’s actually the values and a common vision amongst the staff.
When it comes to employing staff you want to look at people’s values and their attitude more than anything else. Skills are obviously very, very important, but skills can be developed and nurtured. They want to know that, if they come to you, they’re going to increase their knowledge and learning, but if you don’t have someone who has the right attitude and the same shared goals as the company, then that’s going to hold you back.
What advice would you give someone starting up now?
I would tell them to focus on driving sales. It is so easy to get distracted with all the day to day hassles, admin and challenges - until you set up a business it’s impossible to get across just how many challenges and daily distractions there are.
For any business to be able to scale up robustly, it’s got to have a really concrete understanding of its sales pipeline. You can only make robust forecasts if you understand your sales pipeline and have confidence in that. Then you can start to look at your infrastructure and how much you can spend on staff and how much you can spend on supporting services. It’s important to dedicate part of every single day to driving sales and have a bombproof sales pipeline.
I’ve learned that the hard way. In the early days, I would go out and win business and then be purely focussed on delivering it for the next three or four months. This ultimately means you don’t have anything in the pipeline once those projects come to an end.
So, we invested in very good staff that can fulfil the work and free me up. I think, the danger, particularly in service industries, is that, if you have a business built around one person’s skill set, it’s very hard to scale up.
When you’re growing it’s natural to be cautious and keep a close eye on the balance sheet, keeping costs to a minimum. However, you need to make the decision of what size you want to be – are you happy being a lifestyle business, or do you want to scale for an exit? Having a clear vision will then allow you to have the confidence to invest in the right infrastructure.
What would you say you are most proud of?
It’s a really interesting question because, as an entrepreneur, you are on this mad hamster wheel and always looking at the next stage. I’ve never really stopped to think about what I was proud of at all. I think there are a couple of things though. Obviously you’re hugely proud of the client work you do, because that’s why we do this. That’s why we get out of bed in the morning. Doing great work means their businesses are more successful, they earn more money, can employ more people, have a higher valuation and so on.
We’ve just launched a digital campaign, and it’s performing over 9,000% better than the industry standard click through rates. Now, that’s not purely down to us. It’s a great product but, again, it gives you a massive kick when you see something doing incredibly well. Particularly when we’ve also saved them a huge amount of money by showing they don’t need to spend vast sums to achieve their goals. Personally, I love getting value for money, and I’m very proud when our clients get great value for money though us.
I’m also very proud of the quality of staff that we’ve been able to build. We’ve got people who were Partners and Directors in very senior marketing agencies who have taken, on paper, a big risk to come and join us, but it’s because they buy into our vision that they want to come and enjoy the journey, and most importantly why they’re still with us.
What is next for you and Thomond?
I think next for us it to deliver on our ambition and that is to be the go-to marketing agency for high-growth businesses. We want to be the number one in the UK. We want to have the option and ability to go international, something that Rosanagh, my co-founder is very keen on. For me, personally, I would like to get the business where we’re the number one default go-to, and then we can have a spin-off arm, which does the investments ourselves, and do far more mentoring.
Is there anything else you’d like to add?
I think it would be that if anyone does work with a marketing agency, make sure you make it work on your terms. Don’t be sold a product for the sake of it. That’s where it’s so hard for entrepreneurs. I go back to the contract analogy, I think a lot of entrepreneurs know where they want their product to end up, who they want to be buying it, and they know why their product is so valuable, but they don’t know how to get it out to market best. I think entrepreneurs need to make sure they find someone they trust, who will provide consultancy and honesty. You want them to challenge you on why you want to do a certain marketing tactic, rather than just pocketing the money.
Jennifer Dickie. Thank you for your time, that’s been really interesting.