Exclusivity

Hey, everybody. Drew McLellan here from Agency Management Institute this week coming to you again from home here in Denver. You know, one of the questions we often get asked as we encourage agencies to identify a niche or a place where they can be a subject matter expert, is the question about exclusivity. Clients wanting you to offer them exclusivity, even though part of why they hired you is because you have a depth of knowledge in their industry or area of specialty. So here's how we recommend you handle that. First of all, everybody doesn't get exclusivity. Part of what they are doing when they're hiring you as subject matter expert in ‘rural health care’ or ‘pharma for women over 50’ or ‘manufacturing for fill in the blank’ – part of what they're hiring you for is because you have a lot of experience and clients in that space. But what you can offer them, or a subset of them, is some level of exclusivity. And the way that works is this: for clients that spend over X, and that X is going to be in the top 10% of your clients.

So for some of you, it might be $5,000 a month, for others it might be $25,000 a month. Whatever it is, for clients who spend a minimum of X a month, they can identify one competitor that you will not pursue. For clients that spend more than that – so you're going to have an incremental, so you're gonna have three levels: minimum level, like if you spend less than $20,000 a month, you get no exclusivity. If you spend $20,000 a month, you can exclude one competitor. If you spend $30,000 a month – and I'm just making up these numbers to give you the example – you can identify two competitors. If you spend over $35,000, you can identify up to three competitors that we will not do business with.

But you might do it by geography. You might let them identify specific competitors, but you're going to control the set of competitors that you are not, in your area of expertise, going to take. But don't do that for everybody. Don't do it for project work. Don't do it for clients that are spending a small amount of money. This has to be in your clients that are the top 10% or 20% of monthly spend that they have earned the right to give you a set of competitors that you're not going to go after. Everybody else, they get to benefit from the fact that you have this subject matter expertise, this industry knowledge, that you're known in the industry, that you understand they're inside baseball jargon, that they can jump in with you and start to work right away without having to sort of teach you their industry. They get all those benefits and that's enough.

But for a small subset of your clients, you can offer them some level of exclusivity based on their spend. But be very clear about what it is and you should define it ahead of time. You should know what those numbers are for you. So I would look at your top 20% of your clients and you would say, okay, the top 5% or 10% of our clients, they spend a minimum of X a month and then figure out what those tiers are based on that spend that your current clients are spending, or where you want clients to spend, where you're willing to give up some of the opportunity to serve someone in that industry or that space in exchange for a retainer-level monthly commitment that's at least a year long. And the minute they dip below that, or they don't want to give you a monthly amount, or they don't want to give you a retainer, or it might be an annual budget that's big enough, and they have to spend a certain amount every quarter, the minute that they violate that, then the exclusivity goes away. So be stingy with exclusivity. Recognize that part of why they're hiring you is because you have this expertise and they benefit from it all day, every day. So don't give it away for free. Okay?

See you next week.