Executive employment agency marketing plan

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Executive Employment Agency Marketing PlanExecutive Search & Rescue Firm

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Table Of Contents

1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.1 Market Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.1.1 Market Demographics . . . . . . . . . . . . . . . . . . . . . 32.1.2 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . 32.1.3 Market Trends . . . . . . . . . . . . . . . . . . . . . . . . 32.1.4 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . 5

2.2 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.2.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . 62.2.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . 62.2.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . 62.2.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.4 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2.4.1 Service Business Analysis . . . . . . . . . . . . . . . . . . . 72.5 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.6 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 83.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.4 Target Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.6 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.8 Marketing Research . . . . . . . . . . . . . . . . . . . . . . . . . . 11

4.0 Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 114.2 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

5.0 Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155.1 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155.2 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . . 165.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . 16

1.0 Executive Summary

The Executive Search & Rescue Placement Firm (Executive/ESR) is an executive search firm that specializes in serving emerging companies with an emphasis on high technology firms.

Executive will be serving metropolitan Minneapolis, an active, growing market. Through a well connected network of colleagues in the emerging company market niche and a sophisticated predictive screening system, Dan Bloodhound and The Executive Search & Rescue Placement Firm will steadily gain market share.

The Executive Search & Rescue Placement Firm's mission is to service emerging companies with outstanding executives. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.

The Executive Search & Rescue Placement Firm has very specialized knowledge of the emerging company market with over ten years of work experience. Dan's insight and contacts are extremely valuable because the main tools in executive placement are knowledge of the industry and good contacts within. This will propel Executive into a commanding position in the executive search industry.

Executive will reach profitability by month eight and will have $48,000 in revenues by year three.

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$50,000

$100,000

$150,000

$200,000

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2003 2004 2005

High-tech firms

Non-high-tech firms

Annual Sales Forecast

Executive Search & Rescue Placement Firm

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2.0 Situation Analysis

The Executive Search & Rescue Placement Firm is entering its first year of operation. The Minneapolis community has a need for executive placement and will utilize a professional placement service. The basic market need is a skilled service provider that can assist in the placement of seasoned executives.

2.1 Market Summary

ESR possess good information about the market and knows a great deal about the common attributes of the most prized customers. This information will be leveraged to better understand who is served, their specific needs, and how ESR can better communicate with them.

High-tech firms

Non-high-tech firms

Target Markets

Table 2.1: Target Market Forecast

Target Market ForecastPotential Customers Growth 2003 2004 2005 2006 2007 CAGRHigh-tech firms 14% 245 279 318 363 414 14.01%Non-high-tech firms 10% 126 139 153 168 185 10.08%Total 12.72% 371 418 471 531 599 12.72%


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2.1.1 Market Demographics

The profile for ESR's customers consist of the following geographic, demographic, and behavior factors.

Geographics

• The immediate geographic target is the city of Minneapolis with a population of 1.2 million. • A 65 mile radius is in need of the search services. • The total targeted population is 371.

Demographics

• The typical firm has 15-350 employees. • The companies are from six months to 35 years old. • 66% of the firms will be high technology companies. • 54% of the companies are funded through venture capital. • 39% of the companies have more traditional equity/debt arrangements.

Behavior Factors

• The companies recognize the value of a specialty search firm, a recognition that companies have specific core competencies and the individual's firm is not proficient at executive searches.

• 54% are rapidly growing companies whose hiring needs have outpaced their internal HR department's ability to assist.

• Desire to hire the best possible person, recognizing that human capital investments will pay off in the long run.

2.1.2 Market Needs

ESR is providing the Minneapolis community with a sophisticated, effective, executive search service. Executive Search and Rescue seeks to fulfill the following benefits that are important to its customers.

• Fast Service: Often companies cannot recognize their hiring needs until it is too late. Therefore typical customers appreciate a fast placement service.

• Accuracy: The ability to accurately find a candidate who has the necessary skills, as well a match with the company culture.

• Customer Service: Satisfaction guaranteed.

2.1.3 Market Trends

The market trend for placement services is a specialization of the placement services.

• Specialization has occurred because of a need for more accurate or predictive placement that occurs with specialization.

• With the booming technology sector, it is now sustainable to have a placement agency that specializes on this sector.


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2003 2004 2005 2006 2007

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Market Forecast


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2.1.4 Market Growth

In 2000 the executive search industry achieved $453 million in revenue. The industry's growth is projected to be 8% for the next five years.

Part of the fuel for this growth is the recognition that executive search firms are more efficient in finding executives than the internal HR department of most companies. This trend of outsourcing is not unique to executive placements, but can be seen in many different industries from payroll to accounting.

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Target Market Growth


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2.2 SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing Executive Search and Rescue.

2.2.1 Strengths

• Strong networking web within the community. • Sophisticated, predictive screening mechanisms. • Industry insight based on pragmatic experience.

2.2.2 Weaknesses

• Weak initial cash flow. • The lack of brand equity, a function of a start-up organization. • The inability to scale rapidly.

2.2.3 Opportunities

• Participation in a growing industry. • Low overhead. • The ability to decrease fixed costs per sale as business picks up.

2.2.4 Threats

• A lack of immunity from an industry downturn. • The attractiveness of the industry has encouraged new entrants and competition may

increase as a result.

2.3 Competition

Minneapolis currently has about six - 10 executive search firms. There are other search firms that handle many different positions, not just executives.


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2.4 Services

Executive Search and Rescue will provide a wide range of placement services. Executive will specialize in the high-tech niche of emerging companies, but is equally competent for non-high-tech companies. Executive can place a wide range of executive positions from CEOs to CFOs.

Executive works on a contingency basis, it is paid on placement. This arrangement allows it to work for many different clients at the same time.

Currently, there are about six different executive search firms in Minneapolis. Because Minneapolis is a part of the silicon forest, a hot bed of emerging technology firms, the market is growing at exciting rates.

2.4.1 Service Business Analysis

There are two business models for executive search firms:

1. Retainer Firms: These firms typically command 30-35% of the executives first year salary. The firm is paid regardless of finding a candidate. The benefit of using this firm is that the search firm is under extra pressure to find the right candidate and will spend extra time to get the person that "fits the bill."

This setup also limits the number of positions that the search firm can look for at once as it has an obligation to find the executive for the retainer fee. This is a more unusual set up.

2. Contingency Firms: This is the more common arrangement where a fee is paid when the search firm finds an appropriate candidate. The advantage to the client is that they only pay if services are rendered. This creates an economic incentive to perform, but when the company is in a hurry to find someone, the incentive is lost.

This set up is advantageous to the search firm because it allows it to search for a wide range of clients at once. The margins for the contingency model are generally the same as the retainer firms.

2.5 Keys to Success

The keys to success are:

• Servicing the customer's needs. • Accuracy in placements. • Predicting future needs.


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2.6 Critical Issues

Executive is still in the speculative stage as an executive placement agency.

Its critical issues are to anticipate growth and scale accordingly. This must be done prudently and analytically. If it is slow to move it loses business, if done too fast then it could suffer in an economic downturn.

3.0 Marketing Strategy

The Executive Search & Rescue Placement Firm's marketing strategy will be based on advertising and networking.

The advertising will be done in the several local journals that cater to emerging businesses. The most prominent is the Business Journal of Minneapolis which Executive will often have a presence in. The advertisement will be geared toward bringing companies on as clients, however, this will only be a secondary goal of the advertising.

Dan will be relying on networking to set up companies as clients. As business continues, Executive's track record will get more solid and its results will speak for itself. This is the type of industry where associations count for a lot, and when Executive scores a few big clients, many others will come through the door because they are impressed with who our clients are.

The marketing strategy will develop interest in the firm, while the sales strategy will then turn the leads into customers. This will be done with superior service based on interpersonal communication skills. The sales leads will call/inquire for more information and it will be the Dan's responsibility to convince the lead that Executive would be a worthwhile investment of time, based on the firm's competitive advantages and track record.

Lastly, Executive will have a website that will be a fairly comprehensive collection of information about Executive and the services it provides.

3.1 Mission

The Executive Search & Rescue Placement Firm's mission is to service emerging companies with outstanding executives. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.

3.2 Marketing Objectives

• Maintain, positive, steady growth. • Increase the number of repeat customers or referrals by 7% a quarter. • Decrease customer acquisition costs by 8% a year.


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3.3 Financial Objectives

• Profitability by the end of year one. • Increase the number of account executives by at least one per year. • Decrease operating margins by 2% a year.

3.4 Target Markets

Our customers can be divided into two different groups:

1. High-tech Firms: The high-tech firm deals with some aspect of technology, like design or manufacturing. These firms currently make up over 80% of the top 20 fastest growing companies in Oregon.

2. Non-high-tech Firms: While this category of emerging companies is far smaller then high-tech companies, it should not be neglected. There are plenty of fast growing companies in this segment and Executive will be able to serve them.

Executive is concentrating on emerging companies for the intuitive reason that emerging companies need executives more often than stagnant companies. As a company grows, there is an increased demand for leadership.

Within the emerging company label, there are predominantly high-technology companies. While this has been tempered somewhat by the recent economic slowdown, these companies are still growing at astronomical rates.

An example at just how fast some companies are growing is a company called eBay. eBay's CEO is Meg Whitman who used to be a executive at Hasboro Toys. After two years at eBay, Meg was worth more (from eBay stock) than the entire Hasboro family after over 30 years of business.

These companies are growing very fast and this is the perfect time and place for an executive search firm to fuel this growth.

3.5 Positioning

Executive will position itself as the premier executive placement agency for the high-tech sector of Minneapolis.

Rapidly growing companies will appreciate the fast, predictive service that Executive offers. Executive Search and Rescue will leverage its competitive edges to achieve the desired positioning.

Executive has a two pronged competitive advantage that will allow it to rapidly gain market share:

1. Networking: Dan has been in high-tech sales in Minneapolis for the last 10 years. During this time Dan has made contacts in this intimate community. Additionally, Dan has been an active member in the Chamber of Commerce, the Minneapolis Venture group, the Minneapolis Angel Fund, and other organizations that are composed primarily of emerging companies. The activity in these organizations has allowed Dan to establish personal relationships with most of the emerging companies in the Minneapolis area.

2. Sophisticated Screening/interviewing Systems: Dan will be implementing a structured behavioral interviewing system (SBI) to accurately screen candidates, it is statistically far more predictive than any other system. SBI is based on several elements:


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• Structured: The questions are designed in advance and every applicant receives the same questions to allow a relative comparison to be made.

• Behavioral: The questions ask the applicants how they would act in a certain situation.

• Theory (proven empirically): If you come up with analogous situations that the applicant is likely to encounter in the prospective position, then the answers that you receive are indicative of how they would behave.

SBI is statistically more predictive than other interviewing methods if done correctly. One aspect of proper implementation/usage is the quality of the questions that are developed. Dan, having worked in the high-tech industry for 10 years, has the insight to know what is expected of an applicant applying for the stated position.

3.6 Strategy Pyramids

The single objective is to position Executive as the most respected executive placement agency.

The marketing strategy will first seek to create customer awareness regarding the services offered, then develop the customer base, and finally work toward building customer loyalty and referrals.

The message that Executive seeks to communicate is that its advanced screening systems are more sophisticated and predictive than any internal HR department or outsourced competitor.

This message will be communicated through a variety of methods. The first method of communication is advertisements in the widely distributed Business Journal of Minneapolis.

The second method of communication will be through purposeful networking activities leveraging Dan's personal and professional contacts that were developed through years within the industry.

3.7 Marketing Mix

Executive's marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service.

• Pricing: The pricing scheme will be competitive relative to other executive placement services.

• Distribution: The services are tailored to address the needs of Minneapolis. • Advertising and Promotion: ESR will rely on an advertising campaign and strategic

networking to raise awareness and build brand equity. • Customer Service: Executive recognizes that the only way to grow a business is to ensure

that customer's expectations are exceeded.


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3.8 Marketing Research

The market research that was performed to support both the business plan as well as this marketing plan was based on interviews. Dan conducted interviews that were structured (each interviewee was asked the same questions) and recorded for future analysis.

Dan interviewed 15 people, generally the the vice president of HR, although occasionally Dan interviewed the COO.

The interviews provided Executive with valuable insight into the companies perceived future needs, the thought process that is undertaken when considering hiring issues, as well as determinating the value (quantified) associated with a predictive executive placement service.

4.0 Financials

This section will offer a financial overview of ESR as it relates to the marketing activities. Executive will address break-even analysis, sales forecasts, expense forecasts, and how those link to the marketing strategy.

4.1 Break-even Analysis

The break-even analysis indicates that $1,053 is needed in monthly revenue to achieve the break-even point.

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Monthly break-even point

Break-even point = where line intersects with 0

Break-even Analysis


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Table 4.1: Break-even Analysis

Break-even Analysis:Monthly Units Break-even 0Monthly Sales Break-even $1,053

Assumptions:Average Per-Unit Revenue $25,000Average Per-Unit Variable Cost $1,250Estimated Monthly Fixed Cost $1,000


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4.2 Sales Forecast

The first month will be spent setting up the office; sales activity will be slow. In addition to dealing with legal and advertising issues, time will be spent with the physical assembly of the office and the development of the back-end systems.

During the first month Dan will be developing the structured behavioral interview system. By the second month the office will open and ready to go. Dan will be working with both emerging clients as well as bringing in executives and running them through the screening process once he knows what positions he is looking to fill.

Sales will grow steadily from month two. Executive expects to have a surge by month four and will respond by hiring an account executive to help handle the accounts.

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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Non-high-tech firms

Monthly Sales Forecast

Table 4.2: Sales Forecast

Sales ForecastSales 2003 2004 2005High-tech firms $96,640 $156,478 $181,547Non-high-tech firms $22,929 $26,654 $31,254Total Sales $119,569 $183,132 $212,801

Direct Cost of Sales 2003 2004 2005High-tech firms $4,832 $7,824 $9,077Non-high-tech firms $1,146 $1,333 $1,563Subtotal Cost of Sales $5,978 $9,157 $10,640


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4.3 Expense Forecast

The marketing expenses will be budgeted so that they are fairly high during the first quarter. The reasoning for this is as a start-up organization, it is important to build brand immediately. Expenses will decrease in the summer months and ramp up for the fall hiring push.

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Table 4.3: Marketing Expense Budget

Marketing Expense Budget 2003 2004 2005Advertisments $8,250 $10,000 $12,000Networking $2,600 $3,000 $4,000

------------ ------------ ------------Total Sales and Marketing Expenses $10,850 $13,000 $16,000Percent of Sales 9.07% 7.10% 7.52%Contribution Margin $102,741 $160,975 $186,161Contribution Margin / Sales 85.93% 87.90% 87.48%


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5.0 Controls

The purpose of ESR's marketing plan is to serve as a guide for the organization.

The following areas will be monitored to gauge performance:

• Revenue: Tracked both monthly and annually. • Customer Satisfaction: This information will be captured through a feedback mechanism. • Profit Margin: Tracked both monthly and annually.

5.1 Implementation

The following milestones identify the key marketing programs. It is important to accomplish each one on time and on budget.

Jan Feb Mar Apr May

Marketing plan completion

Completion of first advertising campaign

First major high-tech account

First major non-high-tech account

Milestones

Table 5.1: Milestones

Milestones PlanMilestone Start Date End Date Budget Manager DepartmentMarketing plan completion 1/1/03 2/1/03 $0 DanCompletion of first advertising campaign 2/1/03 4/31/03 $3,000 DanFirst major high-tech account 3/1/03 5/31/03 $1,000 DanFirst major non-high-tech account 4/1/03 6/31/2003 $1,000 DanTotals $5,000


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5.2 Marketing Organization

Dan Bloodhound will be responsible for all marketing activities except ad copy creation.

5.3 Contingency Planning

Difficulties and Risks

• Problems generating visibility. • An economic downturn that curtails executive hiring.

Worst Case Risks May Include

• Determining that the business cannot support itself on an ongoing basis. • Having to liquidate equipment, or intellectual property, to cover liabilities.


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Table 4.2 Sales Forecast

Sales Forecast PlanSales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecHigh-tech firms $0 $4,500 $6,454 $7,154 $7,895 $8,125 $8,678 $9,125 $9,654 $10,854 $11,547 $12,654Non-high-tech firms $0 $0 $2,250 $2,154 $2,500 $2,458 $2,154 $2,254 $2,414 $2,345 $2,255 $2,145Total Sales $0 $4,500 $8,704 $9,308 $10,395 $10,583 $10,832 $11,379 $12,068 $13,199 $13,802 $14,799

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecHigh-tech firms $0 $225 $323 $358 $395 $406 $434 $456 $483 $543 $577 $633Non-high-tech firms $0 $0 $113 $108 $125 $123 $108 $113 $121 $117 $113 $107Subtotal Cost of Sales $0 $225 $435 $465 $520 $529 $542 $569 $603 $660 $690 $740

Appendix: Executive Search & Rescue Placement Firm

Page 1

Table 4.3 Marketing Expense Budget

Marketing Expense Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecAdvertisments $800 $750 $700 $750 $600 $550 $500 $600 $700 $750 $800 $750Networking $200 $175 $150 $200 $150 $175 $200 $225 $250 $275 $300 $300

------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------Total Sales and Marketing Expenses $1,000 $925 $850 $950 $750 $725 $700 $825 $950 $1,025 $1,100 $1,050Percent of Sales 0.00% 20.56% 9.77% 10.21% 7.22% 6.85% 6.46% 7.25% 7.87% 7.77% 7.97% 7.10%Contribution Margin ($1,000) $3,350 $7,419 $7,893 $9,125 $9,329 $9,590 $9,985 $10,515 $11,514 $12,012 $13,009Contribution Margin / Sales 0.00% 74.44% 85.23% 84.79% 87.78% 88.15% 88.54% 87.75% 87.13% 87.23% 87.03% 87.90%

Appendix: Executive Search & Rescue Placement Firm

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