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Why All Agencies Should Be Balance Sheet Savvy

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Surprising as it may seem, the real differentiator for agencies likely is not being the most creative or cheapest(!), it’s a weapon most agencies wouldn’t expect:

Financial Fluency.

Imagine. A team where everyone, from the copywriter crafting viral copy to the social media expert, can decipher a client’s financial health with the ease of reading a menu. I believe that financial literacy in advertising could really change the game.

Sound crazy?  Well, here’s why I think fostering balance sheet literacy across your entire agency would benefit your team and your clients’ businesses:

Demystifying the Numbers Game: Why Balance Sheets Matter in Advertising

While accountants might handle the nitty-gritty, understanding its core components would empower agency resources in several key ways:

  1. You’re Likely Missing Out: Missing out?  Believe me when I say that there are any number of consulting companies marketers can (and likely will) talk with to help them understand the financial implications of strategic decisions they’re contemplating. And that’s a role agency’s need to own.
  2. Strategic Alignment: Campaigns built in a vacuum often miss the mark. By understanding a client’s financial health, your team can tailor strategies that align with their resources. Is the company flush with cash for a high-budget campaign or are they better suited for a targeted social media campaign? Balance sheets provide the context to make informed decisions.
  3. Cost-Effectiveness: Every dollar spent on advertising needs to deliver a return on investment. Understanding a client’s financial limitations helps your team avoid proposing extravagant campaigns that might not be feasible.
  4. Client Comprehension: Balance sheets aren’t just for internal discussions. When teams grasp financial statements, clients will quickly see they’re astutely invested in their financial success.
  5. Identifying Growth Opportunities: Balance sheets can reveal hidden gems. Perhaps a client has a healthy cash reserve that could fuel expansion into new markets. Or maybe their low debt-to-equity ratio suggests they’re ripe for strategic partnerships. With an understanding of their financial position, an agency could confidently propose innovative marketing strategies to unlock untapped potential.
  6. Deeper Client Relationships: Finances are often a sensitive topic. But if an agency team demonstrates financial literacy, they automatically position themselves as more than just creative partners. They become strategic advisors who understand the bigger picture to build stronger, more collaborative client relationships.

Beyond the Bottom Line: Building an Agency with Balance Sheet Savvy

So, how could agencies equip their teams with the power of the balance sheet?

  • Internal Training: Invest in workshops or online courses that provide a basic understanding of financial statements.
  • Financial Literacy Champions: Identify team members with a natural aptitude for financial concepts. Encourage them to become internal resources, answering questions and explaining financial topics.
  • Real-World Examples: During brainstorming sessions, include hypothetical balance sheets of potential clients. This will foster discussion and helps everyone understand how financial data translates into marketing strategies.
  • Client-Focused Communication: Develop a clear communication style that explains financial concepts in plain English. This will build trust and ensure clients feel comfortable discussing their financial position.

The ROI of Balance Sheet Literacy: A Win-Win for Agencies and Clients

The benefits of a financially literate agency extend far beyond just understanding budgets – and here’s the ultimate win-win:

  • Stronger Advice: Advice that demonstrate an understanding of the client’s financial position are more likely to retain (and win) client’s business.
  • Improved Client Retention: Clients who feel their agency is invested in their financial success are more likely to stay loyal.
  • Enhanced Reputation: A reputation for financial expertise sets your agency apart from the competition.
  • A Position of Strength:  Grounding a relationship in financial know-how strengthens the advisory relationship and keeps it out of the hands of big consultancies with long-standing finance expertise.

Sure, financial statements can be drier than a day-old pop tart and I’m not trying to suggest agencies turn into spreadsheet superheroes.  But further empowering teams to create marketing magic that respects the cold, hard reality of your clients wallets is the key to forging deeper client bonds and yes, even winning more business!

So in our view, a small investment in balance sheet literacy will pay agencies dividends as  your teams transform deeper financial literacy into greater marketing power.


Stephan Argent

Stephan Argent is Founder and Principal at Listenmore Inc offering confidential advisory to marketers looking for truly independent insight and advice they can’t find anywhere else. Read more like this on our blog Marketing Unscrewed / follow me @StephanArgent