Martin Williams: piecing it together
Martin Williams I-Group had reached an impasse. The Minneapolis-based design and promotion agency, which began in the 1980s, had grown rapidly through the 90s as it branched into Web-based services, and reached some $6 million in annual billings in 2001, with some 40 employees. But it didn’t have enough size to hire the additional staff it needed to develop the statistics and data modeling its clients were increasingly demanding.
For a while, the work of off-staff statisticians kept clients pacified, but the freelance costs were grinding down profits. How to grow the agency without exposing it to unsupportable cash flow problems? wondered Gregg Sampson, managing director of the group.
For a while he and Steve Collins, the president and CEO, considered buying a direct response company, particularly one with deep data analysis resources. But then the agency was approached by Paris-based Tequila. The direct marketing, interactive and promotions network for Omnicom Group, Tequila was eager to expand in North America.
“It was an obvious solution,” Sampson says. “Martin Williams I-Group is now branded to Tequila and draws upon the data analysis, personnel and other expertise found throughout the group.”
The relationship most closely resembles a franchise, whereby Martin Williams pays a fixed fee (a single-digit percentage, according to Sampson) to Tequila on revenue from all new business brought in since the relationship began in November 2002. Also, internal charge backs are triggered as Martin Williams uses specialized services within Tequila. In turn, the smaller agency may charge its new sister companies for Web promotion services it provides to their clients. “Tequila tries to avoid duplication of specialties in the regional offices. We identify ‘centers of excellence’ and maximize the efficiencies,” explains Sampson. He is now the managing director of the Tequila-branded agency, reporting to both Collins and Wes Nichols, president and CEO of Tequila North America.
