The growth plan at Secret Weapon Marketing defies conventional business sense.
Instead of getting as many customers as possible, the advertising agency limits its client list to only three companies.
In order to grow the agency’s revenues, it must grow its clients’ business to the point where they need more advertising and marketing services.
That theory seems to have worked with Jack-in-the-Box Inc., the only account the Santa Monica-based shop has maintained during its entire 10 years of existence. During that period, the agency’s billings for Jack have roughly tripled.
“The strategy at most agencies is: ‘If we have more clients coming in than leaving, we’re a successful agency,'” said SWM Founder and Creative Director Dick Sittig. “We’re going to grow not by quintupling the number of clients, but by growing their business. That’s a foreign concept in today’s advertising world.”
SWM’s unusual strategy developed out of the founders’ experience at big agencies. Sittig, the man behind the Energizer Bunny ad campaign, started SWM to serve the Jack account when his then-employer, Chiat/Day, landed the larger Taco Bell business and had to shed the Jack account.
Sittig recruited Patrick Adams, a long-time L.A.-based account manager, as managing director, and the company was launched.
Both men are what Adams called “allergic to bureaucracy” and want to concentrate on a few clients. But Sittig believes the three-only rule also enhances his company’s reputation. “Agencies always tell their clients to differentiate themselves in the market, but they don’t do it themselves very well. They all follow the same basic model,” he said.
On the operational side, Adams noted that he only wants high-quality employees and that gets difficult when hiring 100 or 300 people. Instead, SWM has only 35 employees a tiny number given its annual billings of $135 million.
“Clients deserve attention from the principles, and you can’t do that with 15 accounts,” Sittig explained. “Both Pat and I have been at larger agencies where during the pitch, the principals tell baldfaced lies: ‘We have 15 accounts, but I’ll give you 30 percent of my time.’ We just didn’t feel comfortable lying. We can juggle three sets of meetings and phone calls, but not 15.”
Currently, SWM has two accounts, Jack-in-the-Box and Southern California Honda Dealers, which they won in January. In seeking that elusive third leg, the advertiser’s product category won’t matter as much as its business style, Sittig claims. “We don’t have bureaucracy, and we’re a good match for advertisers that don’t have a bureaucracy,” he said.
To measure their performance, the partners look at both sales figures and awards.
Jack-in-the-Box ranks as the only ad campaign in history to win both a Golden Lion for creativity and a Gold Effie for sales effectiveness.
Adams, a former CPA, has another metric for Jack’s return on investment. When SWM took over the account 10 years ago, the stock price of the publicly traded company hovered around $3.50. Today, Jack-in-the-Box trades for about $75 per share.
Unconventional success
The SWM flies strategy in the face of conventional wisdom, even in the open-minded advertising industry. “The Advertising Agency Business,” a text book and professional reference by Eugene Hameroff and Herbert Gardner, states the case thusly:
“In seeking new business, agencies should be wary of big accounts that may take all the agency’s resources and abilities. The later loss of such business could cripple or wreck an agency.”
Sittig answers that SWM has never lost an account, although the partners have “resigned” a few because of incompatibility with the agency’s style. “That’s the point of having fewer accounts you can take care of them,” he said.
Hameroff and Gardner suggest that “a good agency’s staff brings wide experience and business judgment to bear upon problems. new brains plus new enthusiasm plus new approaches equal new results.”
But SWM tends to create a campaign and then work it for years, as it has with the ball-headed chief executive Jack who fronts for Jack-In-the-Box.
Adams maintains that creative concentration on a few tasks makes better advertising.
Beyond that, Sittig said, since he only wants three clients, he doesn’t have to follow industry trends. He likens SWM’s model to private banks that focus on a few, big-money customers.
“You can’t be a commodity and outperform the market, and you’ve got to do what feels right for you,” Sittig said. “We love advertising, not bureaucracy or the global chess game of selling detergent in Asia and Europe. We just love the art of persuasion.”
