Agency owners how much did you spend on new business last year and what return did you get back?
Well, it's a simple question, do you know the answer?
Agency folk like to talk about how the agency model has changed and how it has affected their bottom line. But let's be honest, the biggest thing that's going to affect your bottom line is how effective your new business process is and of course how good you are at keeping satisfied clients. Therefore to really understand how your agency is doing, you may need to ask yourself some uncomfortable questions.
How effective is my investment in new business?
If you add up all of the salaries of people who are involved in new business each year from marketing your agency to prospecting clients, engaging with them and responding to clients RFI's and RFP's what does the number look like? Then look at how many new clients you've gained and what profit or return on investment they are going to deliver?
What's you're pitch win ratio?
How many real pitches did you get invited on and how many did you win? What was the secret sauce that resulted in these wins? And why did you lose the ones you lost?
Next step: Do you have a credible and realistic new business strategy?
The question around do you have a realistic new business strategy is important - is it based on sound data and commercial planning? Who are we going after? Why are we going after them? What exactly do we want to sell them? How are we going to go after them? If we do win this kind of business is it even commercially viable?
Now this part of the process isn't a lot of fun. But there are plenty of agencies out there of all different sizes who have new business teams that chase pretty corporate logo's to add to their client list without even knowing what budgets they have, what these potential clients are in the market place for? or if it is even worth their while chasing them from a commercial point of view in the first place.
"Just because a brand is big or global, doesn't mean they they necessarily have big budgets".
If this is in anyway true, then how can agencies commercially operate?
Most agencies have one or more pillar accounts, these are the clients that basically pay the bills and keep the lights on. So when you next see a client list full of logo's then bear in mind that only a few of those brands will be spending big bucks with them.
The other brand logo's of course also contribute to the bottom line, but they probably take as much time to service, if not more and chances are they spend an awful lot less with you.
In my experience, although it does happen, very few small clients become large ones. But agencies who really do cohesively engage with a client and effectively use all their resources to create the best solutions do best in terms of growing client relationships.
So if the above is in any way representative of an agency landscape then the answer has to be "how to make your new business process more effective".
Improving the effectiveness of your new business process
These are just my views of course and on an emotive subject like this there will be many different view points and emotional opinions.
Placing new business development at the core of your organisation
Many agencies for some reason seem to have their new business teams as a kind of bolt-on to their business, only really paying attention and getting involved with the process when they generate and RFI or RFP.
Another common factor in scenarios like this is that teams start with a flurry of activity, but without continued direction and support, soon run out of ideas of who to prospect or the motivation to do so.
Any agency that in this day and age thinks they can simply employ a new business person to make calls and win business for them with nothing more than a lap top and a phone are basically (in my opinion) kidding themselves.
Part of the answer is simple. agency owners and boards - don't sit in your ivory towers or corner offices completely disconnected from your business development team (or your clients for that matter) - lead from the front, don't be afraid to roll up your sleeves and motivate all of the agency to ensure you have the best, most well oiled and exciting front end driven agency you can be.
Monitoring the sales process
I'm a convert to capturing and monitoring sales progress through platforms such a SalesForce, however, sales meetings where we just read out everybody's pipeline one by one are a dull and complete waste of time, especially if we are reading out the same status week after week with the same potential clients. We need to allow the team to be truly honest and comfortable about the opportunities they have so we can either invest in it them or kill them depending on where the opportunity lies and how real it is.
Make your team comfortable with the fact that they don't have to have a pipeline as long as your arm, quality is far better and more efficient than quantity.
Don't be afraid to say NO at any point in the process
I once worked for over a year to win an account. It involved doing our own research at our
cost to convince the client that they needed a program of this nature. Followed by then answering an RFI and then pitching against 5 other agencies to be appointed.
All went well until the very last minute when one of the agencies convinced the client that they could create the same program we had pitched for half of the cost. The business was ours if we could price match. We declined.
I declined because the business was no longer commercially viable, I couldn't change the procurement departments mind that they weren't comparing "Apples with Apples" and we would need to turn the agency upside down in order to deliver it on time. Sure, we had invested massively in the whole process, but going ahead when it wasn't commercially viable would just be bad business.
But our efforts weren't wasted, we just took our skills, ideas and IP and refocussed our efforts in landing other clients in that sector.
Build a strategy and process that works for you and your team
Ensure that all involved in delivering the plan are involved and have belief in the plan. Same goes with the process, design a process that works for you from prospecting through to pitch so that the full resources of the agency can be applied seamlessly to ensure every response has the collective best of what your agency has to offer.
Challenge the brief
If you think the brief is wrong or there is a better solution then be brave - at this stage you are pitching on your own "dime" so to speak. Ensconce yourself entirely in the clients business - if there is a better solution then have no fear presenting it.
Commit to the pitch
Don't walk in with half a dozen options and hope that one sticks - commit to your beliefs and make the most compelling argument for the solution you think is going to be most effective
Create and innovate
Our industry was borne out of innovation and creativity - yet investment in these areas continues to decline - 90% of communication is non-verbal so make your presentations highly visually engaging in order to bring your solution to life. In short, create beautiful work.
It amazes me that in a world where teenagers are filming, cutting, editing and producing high quality YouTube videos using nothing more than their iPhones that agencies don't do a better job of bringing creative propositions to life.
Make sure that every solution you pitch is completely and utterly commercially grounded and that the business case you put forward to support the solution can stand up to rigorous scrutiny.
Seek out feedback
Seek out and continually ask for feedback. You need to know why you win and why you lose. If you are losing pitches because the ideas were great but they weren't commercially viable, you were too expensive or they don't "gel" with the team for some reason - then you need to know so you can do something about it.
I'm sure many of you think that you do all of the above and perhaps you do now and again, But to really be successful, you need continuity in terms of process, proposition, response, motivation, creativity and innovation. To achieve this you need to build a team and process which purrs like a kitten. Complete involvement, buy-in and focussed commitment.
The most important point in my view is accountability. We are all sales people in our world and we all have our roles to play in an agency that is wholly focussed to ensure every pitch has every ounce of agency love, dedication and resources ploughed into it - in sporting terms "making sure we leave everything we have on the field after every game". This means we all have to be accountable and more importantly feel happy to be accountable.
We are blessed in being in a creative industry - an innovative industry - embrace it and as leaders ensure that business development is not only the key focus of the business but enjoyable too.
Winning is infectious
There is nothing like working in an agency that is winning new business, it generally leads to more wins and a busier more engaged workforce.
Don't believe your own bullshit!
When agencies are high performing - they start to believe their own hype - that's the beginning of the end - stay humble, stay focussed and stick to the business processes that have brought you success. Focus on the brief and stay true to your solutions/
So there you have it, my top line thoughts on the subject of how to ensure your new business process is more effective. I could of course go on, or go in more detail as we are really just getting into each of the sections. But here is my short summary:
Agency owners / leaders know if their business development approach is at the core of what they do - if it isn't they can change this easily
They know if their teams are effective or not.-If they aren't effective - then they need to ask the difficult questions and make necessary changes.
Most of all they need to plan realistically, improve their processes, engage their new business teams, get their participation and buy in on the basis that they are then comfortable with being accountable.
Ensure all the "goodness" from your agency goes into every pitch.
Be brave, creative and innovative - but grounded in commerciality
Lead from the front - don't delegate new business - lead the charge