There are several common issues many marketing and communications firms share when trying to offer interactive services to their clients. While the general topics below encompass a lot of the problems that happen to some degree in both large and small firms, they certainly are generalizations. And if your firm has any interactive experience they may be familiar – but hopefully not too familiar.

1) Sales Anxiety

Most sales development and account management personnel have not had as much experience with interactive media as with print and broadcast projects. Often this unfamiliarity creates anxiety, making it difficult to sell these services effectively. If a company’s sales force cannot speak comfortably about interactive, it is very difficult to gain a prospect’s confidence and make the sale.

Anxiety is also caused by lack of confidence in a project’s outcome. The foremost fear is failure to produce successful work. A firm can create award-winning design, or prove amazing marketing results, but if a sales person isn’t sure of what they’re selling, or positive their company can delivery a quality product, they hesitate to show a possible weakness to a prospect. No one wants to jeopardize existing client relationships or mishandle a potential new piece of business. As a company owner or sales director, don’t put sales people in this position. Get access to appropriate resources that support an adequate selling process.

2) Unfamiliar Territory

By its nature, interactive has distinct differences from the traditional services provided by communications firms. The primary difference is the underlying use of complex computer technology that neither sales people nor prospects may fully understand. Two options present themselves: train your sales people to present interactive capabilities effectively, or supplement the sales effort with someone who represents interactive.

If hiring a liaison for your interactive department sounds like overkill, let’s compare technology to creativity. Sales and account people rarely articulate the meaning and nuances of design and creativity effectively. For this reason the Creative Director’s role has been to represent these disciplines to clients. More often than not, an agency does not have someone like a Creative Director in place for representing interactive technology, so you may be missing the “link” that your firm needs to effectively communicate interactive to prospects. This person can have many titles: Director of Interactive Technology, New Media Director, Interactive Producer, or Interactive Project Manager.

Good sales efforts require a compelling story. Make sure you have a good story and your sales people understand why it has value. Define the capabilities and services you intend to provide and create a vocabulary that prospects can relate to and understand. The biggest mistake is trying to be everything to everybody by constantly changing position, offerings and capabilities. It prohibits sales people from having a consistent game plan and gets them out of their comfort zone.

3) Inaccurate Estimating

Poor estimating will either cause a net loss on a project, or price the work out of line with what the prospect will pay. Prices are quite varied, but in general are not what they were four years ago before the dotcom market collapse. Interactive is not new anymore, and basic economics have driven down values.

To determine how to price your interactive projects, consider the following:

How much will it cost you to produce the work? The lower this number the more competitive your pricing can be. This is no different than pricing any other type of work except there may be new services and products required to produce interactive projects that need to be researched: software, outsourced specialized skills, leased services, licenses, and more.

What differentiates your work from others? Is it killer design, proprietary technology, or rapid development? Are you selling services or products? Make this part of your story and reflect it in your pricing. However, if you cannot explain your differences and justify how they are priced, it will lower your chances of winning projects.

What’s the value of the project to your prospect? This value may differ drastically to different prospects. So research your prospects. Do they like using local vendors only? Do they shop around and get several bids for projects? Do they have a reputation for working with inexpensive, or high-end vendors? Are they demanding, or easy to satisfy? Is there opportunity for future business?

Be aware of the client’s perspective. For example, if you offer outstanding Web design and they don’t value it, they’re not going to recognize that value or be willing to pay extra for it. Knowing the prospect’s personality will help you determine what should get emphasized and minimized when estimating and selling the project.

Estimating proposals for projects with fixed budgets is another common scenario. It’s almost an opposite exercise than assigning prices to a project. Can you meet all the requirements and stay within budgetary guidelines? This process quickly exposes whether operating and production costs will allow a profit. It is important to meet all the requirements to some degree, but you may not be able to deliver all the bells and whistles. Use the prospect’s personality as a guide to determining what gets the most attention in your proposal.

4) Ineffective Project Management

Project management directly affects the bottom line. The term project management is used here in a broad sense: It begins with setting client expectations and doesn’t end until you deliver the final product. As a project progresses, production must be efficient as possible to keep costs to a minimum – especially with a tightly estimated price.

The number one reason for unprofitable interactive projects is changes during production. Changes are very costly and the client rarely feels they should pay for them. Interactive differs greatly from print media regarding changes. Technology is a building process. During development each step is dependent on its predecessor – similar to changing the floor plan once the walls are in place when building a house. A change may require reverting back several steps to accommodate it. It is very important to communicate to the client at the beginning of the project the implications of making changes too late in the production process, and to establish who will be responsible for cost overruns caused by changes. Defining the project’s scope, detailing deliverables and scheduling accurate timelines are all important to limit the liability of project changes and excessive expenditures.

Remember; project management is not one person’s responsibility. It can be dependent on the account manager, producer, project manager, lead designers and developers, and the whole team. Proper communication and coordination is crucial for success.

5) Insufficient Resources

Having appropriate resources is good risk management. It affects everything involved with getting and producing good work. This is not different from traditional media, but it requires different human, technical, and logistical resources to produce interactive projects.

Interactive requires skill sets that may not be familiar to communication firms’ human resources departments. Whoever imagined agencies would need programmers or database administrators to service client needs? The introduction of these new skills creates a myriad of issues. The people you’ll hire require different equipment to perform their duties and often come from a different occupational culture. It is a challenge to make this all work and is a big reason why production is often not efficient enough to be profitable.

An important question to ask is whether to hire or outsource. Each option has inherent problems. Staffing is expensive to maintain. Outsourcing can be unreliable. Each company must complete due diligence while deciding the best approach. The important thing to remember is to have good human resources and plenty of options. Know the risks and weaknesses of each source. Don’t be caught short.

Another important production cost saver is having the proper infrastructure to produce interactive projects and have standard operating procedures in place. Talented people cannot do their best work if not provided with the proper tools of their trade. Not having these essential tools creates time bombs that explode at the most inopportune times. Breakdown of processes at critical times can make your company look bad, and undermine your best intentions. Infrastructure is expensive, but not as expensive as wasted weeks of production, producing a poor end product, or even a losing client.

Can You Afford Not to Seriously Pursue Interactive?

It is becoming harder to be competitive by not offering interactive services to prospects and clients. Interactive is not going away and can be a profit center if it is approached intelligently and integrated into your core business offerings. Having adequate resources, good project management, accurate estimating all support the sales effort, resulting in positive results for your company in interactive development. I can provide the expertise to increase your capabilities, the resulting sales and realized income.