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May 12, 2004
How To

How to Succeed at Running a Boutique Agency: Behind-the-Scenes Tips From a 32-Year Vet

SUMMARY: No summary available.
For the past 32 years, Hope Lika has been co-owner of Lika Associates Inc., a New York City-based boutique marketing design agency. She's made it through several recessions, and a half dozen US presidencies, and landed big-name clients such as American Express, General Electric, and Bayer Corporation.

In that time, the market for "boutique" agencies such as hers has shrunk: more corporations have brought design in-house and marketing budgets have decreased significantly.

Lika talked with us about how a boutique agency can compete in New York, one of the most competitive markets in the industry.

On landing the big clients

o Ask for referrals

Lika takes a direct approach. "You know the quality of our work," she might say. "I'd love to expand our business. Do you know anyone to whom you might recommend our services?"

Be persistent. "You do have to hammer it again and again, but sometimes it works," she says.

Lika finds it more difficult to get referrals from one department to another within a single organization. "Often they are reluctant to give you up to someone else," she says.

o Research the company's needs

Before meeting with a prospective company, Lika goes online to find out what agencies of record are currently working with the company.

"I can walk into a client like Bayer and I know they've got five agencies of record on contract plus five other boutique agencies like me, and an in-house staff," Lika says. "When they ask what I can offer them, I give them a short list, but then I ask what they need. What has precipitated this meeting, where are their holes? They'll start saying, These people are too small, or, We like their work but they can't deliver," she says.

That's when she can step in and say, "I can give you that [project] tomorrow."

Once when Lika was referred to someone at a large corporation (*not* in marketing), she didn't put much stock in the contact. "I honestly didn't think they were looking for anybody, and I usually work with the marketing department," she explains. "I went there on a whim and brought in a couple of samples."

"Based on a conversation and a follow-up email, I put together a couple of ideas," Lika says.

"Within a week, they called and said, 'Well, that flyer idea you thought of, that could work. Let's try it.'" That single project has led to an ongoing and mutually beneficial relationship.

o Be flexible in negotiations

"I don't immediately cut my price, but I do immediately show them how flexible we are." She tells clients that the results they want can be accomplished in several levels, in several different price ranges.

Then she suggests a specific level, telling the client that through her research she believes that's the best way to accomplish their goals, but she's always willing to scale back. "You can start the job and build them back up," she explains.

On keeping clients satisfied so they stick with you

o Make friends with everyone

Be friendly to everyone, starting with the person who answers the phone. "The minute you're cocky, forget it," she says.

Here's how she does it:

--When you see a picture on the desk, always ask who it is. Then, remember the person's name and ask about them on subsequent visits.

--Give small gifts. "Recently, I knew that [a client] was going on a trip. I saw the latest Donald Trump book and bought it. I said, I know you're going away and thought you might like something for the plane trip."

She also gives small gifts to recognize special occasions.

--Don't be ostentatious at Christmas. While Lika does send gifts to all of her clients, it is nothing like years past, when agencies regularly dished out for elaborate gifts.

--Build them up. "I take my clients out to lunch," Lika says (she pays). When drinks are served (usually Cokes), Lika makes an informal toast: "I just want you to know how much I appreciate your business and how much I've learned from your professionalism."

It's not false praise, she says. It's very important that clients know you appreciate them.

o Respond within an hour

"Even if I'm in a car or a meeting, I'll get back to someone right away," Lika says. She'll call just to tell the person that, whatever the trouble, she's on top of it and someone from the company will get back to them within an hour.

"That's really important, because with the big agencies, you have to go through two or three people before you even get an answer."

o Deliver more than you promise

"I love saying that I think something will cost $5,000 and delivering a bill under budget," she says.

Lika also conducts legwork beyond what's expected. Recently, a client was exhibiting at an event at which they wanted to highlight a new Web site. "I wanted to show it on plasma TV screens and have some laptops set up," she explains.

Instead of having the client use company laptops, Lika researched vendors from whom the client could rent PC kiosks. "They were sleek," she says. "Were they expensive? Yes, about $500 each. But would it make a big impact? Absolutely."

The key, she says, is saying to the client, in essence, "Let me do this for you, let me take this off your hands." Then give the information to the client and let them work directly with the vendor. "I pass that through, I don't mark it up," she says.

What it's really like to run your own agency

As you'd expect, owning your own agency has its pros (total control over what goes out the door, more freedom) and cons (earnings fluctuate and you never really have a vacation because you're always "on").

But what is it really like? Lika shared some insights:

o 30% of time spent finding new clients

"It never ends," she says. You have to guard against becoming so busy with a fabulous client who's giving you all this business that you forget to look for new gigs. "You don't know when they're going to stop using you."

o Cash flow is the biggest challenge

"It's a huge problem," Lika says. "I come upon new vendors whom I might use, and they won't take our new business unless I give them a credit card. It's very difficult to have enough stash there to feel comfortable doing that."

When this happens -- for example, when she has to shell out $10,000 to print brochures -- she'll either ask the client for 50% up front or for a 15-day turnaround rather than the standard 30 days, but the client doesn't always come through.

o Regrets are inevitable

Lika regrets not finding a narrower niche ten years ago. If she could go back and do it again, "I probably would have done straight package design," she says. "Whether it's a box of vitamins or a box of candy, they change constantly. If you're really good at it, it's quite lucrative, and you don't have to reinvent the wheel every time."

o Must have the discipline to save 25% of earnings

"You can't take a good year for granted," she says. "I would say that we save 20-25% minimum for that rainy day."

o Hours aren't as bad as you might think

Lika works about 50 hours a week, generally from 8 am to 6 pm, and her weekends are for herself and her family, though she sometimes reads her email.

She does bring her laptop when she goes on vacations.
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