Agencies that follow the 40% rule are more successful in consistent growth over time.
The rule is simple: No more than 40% of your agency’s revenue can come from one client.
The better you understand your current revenue and forecast of new revenue, the better prepared you are for bumps along the way. It also ensures you don’t end up with a client whose loss would significantly affect the health of your agency. Trust me, I know there is nothing more rewarding than landing a large client. It allows you to grow your resources and capabilities and provides an influx of new revenue. However, leaning on that huge client without balancing their portion of your total billings can also bring future challenges.
In 2017, we hosted a webinar focused on driving agency growth and building value before the sale, and the information is just as relevant today. In the webinar we highlight how to follow the agency 40% rule and stress the importance of why you need to live by it.
If your agency is not following the 40% rule, you have an elephant in the room.
Think about it: what happens when the business from your major client dries up? Or it could simply go away due to things entirely out of your control – your work is great, they love you, but then there is a corporate change in agency relationships. This situation is one nearly every agency faces, especially during key growth phases. I’ve worked with many who got their start by landing one big client who contributes most of the revenue and forgot about the 40% rule until things were in the danger zone.
Here’s how to ensure your agency doesn’t fall into the trap.
There are two primary strategies to help balance your revenue streams – proactive new business development and active diversification. A well-balanced agency will have solid programs in place for both. These programs will create a planned buffer of new business opportunities in a robust pipeline for new clients, and generate organic revenue growth from a diverse base of existing clients.
New Business Development
A focus on client service provides your agency the best opportunity to do work, however, by its very nature, the focus on billable hours often gets in the way of an active new business program, dedicated resources, and an overall strategy for developing new business. Agencies that find a balance between client service and self-preservation typically have a proactive new business development program.
A healthy new business development program typically includes the following three steps:
1. Clarify Your Positioning
To potential prospects, agencies often look quite similar. This isn’t surprising since most agencies market themselves based on their list of services and projects. Your positioning is ultimately about creating a unique impression of your agency in the mind of your prospects. It provides the “elevator pitch” that could lead to your next client.
Positioning allows you to clearly define the unique niche your business will serve. Achieving simple ad agency positioning requires you to answer these essential questions.
- What verticals have you worked with where you’ve seen the most success?
- In what areas does your knowledge of the customer truly make you unique?
- What types of proprietary tools or methodologies has your firm developed that may be unique?
Creating intellectual capital and content is much easier with clear positioning. You’ll also find it makes building your own strategy much more effective.
2. Create Intellectual Capital
Well-deployed intellectual capital can dramatically increase awareness of your agency by leveraging the strengths of your team. The right intellectual capital involves tapping the knowledge of each team member within your organization and helps stir interest in your agency, strengthen current relationships and ultimately attract new clients.
Like knowledge, intellectual capital is gained through experience or association. It’s basically a way of sharing what you’ve learned by teaching it to others. Intellectual capital also demonstrates your expertise in a specific category and provides credibility for your agency. In its truest sense, intellectual capital helps explain why your agency exists and what is important to your team and your clients.
Minnesota-based agency, Brandpoint, leverages their intellectual capital in a big way with their Brandpoint Blog. Brandpoint’s speciality is content marketing and provide expertise from their team regarding content news, developments, best practices and emerging ideas.
3. Develop an Inbound Marketing Methodology
Brands are bombarded by various agencies, data analytics providers, and business consultants with new solutions every single day. Despite the competition, most agencies still promote themselves with their client portfolio and awards they’ve achieved. Instead, what if you focused on providing a clear view of your agency and what you stand for?
The best way to accomplish this is by demonstrating your knowledge and providing it to others. A dedicated inbound marketing program will allow you to create a systematic approach to reach your prospects. In addition, it can help you evaluate the most efficient content and distribution platforms.
By sharing your knowledge and educating your prospects, you are demonstrating your proficiency, creating awareness and establishing trust. Inbound marketing can be the catalyst for a consistent flow of new ideas and new potential prospects.
Diversified Revenue Streams
I know I have said it before, but diversification is key. Diversification of your revenue streams allows you to gain more fiscal predictability through more efficient income. In the book The Marketing Agency Blueprint, Paul Roetzer provides three primary options of diversified revenue streams including software development, education and publishing, and VAR programs.
Software and product development are an alternate revenue stream for agencies who have the resources to build and market these types of products. Therefore, by generating consistent recurring revenue and licensing fees, software products provide a predictable business model to offset the ups and downs of a service business.
Developing a solid intellectual capital gives your agency the opportunity to monetize your knowledge and capabilities. Roetzer suggests online courses, webinars, digital publications or speaking engagements. All of these options are an opportunity for recurring revenue through education and publishing.
Value-added reseller (VAR) programs are those in which your agency provides services for third-party products. Your agency can earn compensation through licensing fees and referrals by providing your expertise on products and tools you are already using. Many marketing software companies offer affiliate programs including Eloqua, Marketo, HubSpot, ConstantContact and MailChimp.
Consider all of this the next time you’re close to landing a large new client.
If you find yourself with an elephant in the room and not following the 40% rule, it’s probably time to begin thinking about your new business development plans. Waiting on referrals will kill your new business efforts, however, putting a new business strategy in place will consistently generate new clients for your team. Once your strategy is supported by consistent implementation, your agency will be protected from the extreme highs and lows of client wins and losses.
All of this should be an absolute priority for any agency that wants to be more stable, more predictable, and more valuable.
Agency new business development is at its peak of importance for several reasons. To start, clients understand the significance of marketing more than ever, and with there being over 77,500 agencies in the US alone, there is more competition today than there ever has been before.
To stand out among the heavy competition and get your agency in front of the brands you want to work with, old business development practices need to be put away, and new ones need to be implemented. Optimizing these efforts begin with five areas to focus on.
If you are ready to take the plunge towards a predictable and sustainable pipeline of new clients, read on:
Hire a New Business Director
It may sound obvious to say that you need someone concentrating on new business, but building demand for your agency is a full-time role. It’s not OK anymore to have five entry-level employees spending 10% of their time on new biz. At minimum, one person needs to spend 100% of their time owning the proactive outbound process and as the agency owner, you have to supply them with the tools they will need to be successful.
When searching for this person, there are three qualities you will want to seek in your new hire:
- High Energy– Your agency needs someone who can sustain a high touch point outreach plan. No one and done emails, but an intelligent multi-touch outreach program. This takes someone willing to put in the time and energy (and hear a couple “no’s” along the way).
- Strong Communicator– A strong communicator in any situation. This isn’t selling a subscription. There is no one size fits all for agency new business so you need someone who can change up the pitch at any given notice to fit the prospects needs and pain points.
- Process Driven– You want someone who will build a repeatable and scalable process over time that will allow your new business engine to be running, regardless of turnover.
Time is a leading agency growth challenge, so if taking the time to hire and onboard an additional employee is a problem for you, check out outsourced options that may be a better, more convenient fit for your agency’s needs.
Positioning Your Agency
With the increasing amount of competition, positioning your agency to be different than the competition has never been more critical. Simply saying you “can do it all” tells clients that you haven’t quite figured out your niche, and if you have, why hide it under a cloak of vagueness?
Many agencies fear that narrowing down their focus will make them seem small or may result in missed business opportunities. The reality is, highlighting the services you thrive in will position you as a leader in that space and lead you to more desirable, better fitting opportunities.
A few questions to ask yourself when building your agency’s positioning include:
- Why does your agency exist? (less about what and how)
- How are you different for every other firm?
- What are you an expert in?
- Why do you get hired?
- Which brands do you have an absolute right to win?
- What DON’T you do?
- What problems do you solve better than anyone else?
If you can’t answer these questions clearly, succinctly, and in an interesting way, then you aren’t quite ready to proactively reach out to new business prospects.
Know Your Audience
Regardless if you’re going to be driving new business in a vertical that you’ve been servicing for 10 years, or if this is your first foray into a new vertical…you need to know everything possible about the audience group you want to attract.
A couple of questions you may want to ask when researching your audiences include:
- What problems are keeping them up at night?
- How do you solve those problems for them?
- What’s happening within their industry?
- What’s your POV on their industry changes?
After answering these questions, you will want to segment your audience so that you can create messaging that appropriately fits each ideal customer’s needs. These three groups serve as a good starting point segmenting your lists:
- Right To Win
Your right to win clients are those that are a perfect fit for your services. To identify them, set parameters for what a perfect client for your agency looks like. What issues do they have? Where are they? What do they specialize in? If a prospect fits all your criteria, you need to be working with them. Keep in mind a “perfect” client is hard to come by – so this list most likely will be smaller than others.
- Great Fit
This will be a much larger list, probably the largest you have. These prospects have problems you can solve, but may not be a “perfect” fit. Maybe they are outside of your geographic region, have slightly lower revenue ranges, or they’re in an industry you have limited experience in. But if they reach 90-95% of your criteria and you can recognize/solve their problems, you should be highly considering approaching them.
These are those whale clients your team dreams of working with. While chasing them isn’t where you should spend the majority of your new business time, landing one could be a game changer for morale and/or revenue. Keep these prospects in your drip campaigns to get them warm and keep your agency top of mind, but put most of your focus on those potential clients that will build a stable base of revenue in the future.
Other ways to segment your audiences may be by industry vertical or even by job title. These are just some examples that will help you get started. Take the time to really think about who you want to work with, and more importantly, what your prospects care about. This will help you determine just how your agency should be dividing your prospecting lists.
Content That Supports Your Positioning With Your Audiences
Many business development pros give a prospect a call, send one follow-up email and move on. Why doesn’t this work? Well, on average, it takes 7-12 touchpoints to generate the first meeting. Decision makers are busy people and if you aren’t sending content that is eye-catching or relevant to them, you’ll be lucky if they even skim your emails.
The content you are sending can come in a variety of forms including:
Your prospects are not looking for you when they visit your website, they are searching for themselves. If your website doesn’t immediately indicate that you understand their needs, they will find someone else who’s website does.
There are marketing emails and sales emails, and there is definitely a difference between the two. Marketing emails are about awareness while sales emails are about stirring up a conversation. Any content you create on your website should be able to be used as a call to action within your marketing or sales emails.
Blogs, again, are not supposed to highlight your agency and it’s culture. Your blog should show that you are an expert. Share your knowledge, experience, and expertise to be a teacher. Don’t hide your knowledge from competitors, but educate your prospects on how you solve those problems for them.
- Case Studies
Keep these simple. Make sure your case studies are easily digestible and that they show real results. Three main things to focus on in your case studies is the problem your client had, the solution you provided, and the results you drove for your client. If it is any more than one page, you will begin to lose people’s attention so be sure to keep it simple and to the point. Highlight the results, not the solution!
- White Papers
White papers are all about educating your prospects, showing that you understand their problems but remember, you are not writing a novel. It just needs to be interesting and add value to your prospects. This is an education tool, not a sales pitch- write them solely to provide extended insights and value to your audiences. On that note, write white papers for specific audiences so it really hits home with your readers. If you are writing a white paper for everyone, it will most likely resonate with no one.
Webinars are a great way to drive third-party advocacy to your audience. You are interacting with your audience in a very personalized way, that can eventually lead to a lot more word of mouth referrals, something we all want more of. They can be key to getting social credibility and are a fantastic way to educate your audience.
At the beginning of a sales strategy, your prospects are likely not familiar with your agency, and they don’t care about your awards or your culture- they care whether or not you can solve their problems. Your content should serve to effectively answer that question to assist your sales process.
Here are some key ways to position your content in a way that will provide your audiences value while also demonstrating what your agency brings to the table:
This is arguably the most important, as a trigger is defined as the problem that is keeping your prospect up at night. Your prospects are actively seeking solutions for these problems (triggers), so you better be speaking their language. These are great for capturing the interest of your prospects when they visit your website or even through a prospecting email.
The Wedge in your content is the proprietary solution to fix a prospect’s triggers. This content provides insights on how your prospect should go about solving their problems. The Wedge is the least important as it is about you and your agency, mention it in order to get to the proof!
- Proof Point
Exactly what it sounds like, proof points are content pieces that show how your agency has solved these problems before with dramatic results. This might be demonstrated through webinars, case studies or even white papers, but the point is that they are firm numbers and results that speak to your expertise and ability to solve your prospect’s problems.
It’s important to hold your team accountable for producing content that will be of interest to your prospects. A good way to do this to have a mix of both junior and senior level members of your team responsible for writing one blog per week. You can rotate the responsibility in order to prevent burn out on writing posts and also to ensure that fresh perspectives are bubbled to the top.
Invest In Technology
You are investing a lot of time and money in a new business person, strategy for the business, and content to back up that positioning…don’t forget to invest in your new business lead’s success by providing them the correct technology to actually get the job done in an efficient and effective way.
This means they will need a Sales Automation technology CRM, a research database, and possibly a marketing automation tool. Check out our webinar on top technology, but the point is, don’t send a hitter to the plate without a bat!
Setting up a sustainable and scalable new business development program takes strategy, dedication, and patience, but once it’s up and running, there is nothing keeping you from hitting those aggressive revenue goals you’ve set for the agency.
Any agency owner that has gone through the task of hiring a New Business Director has surely come across the new business pro that touts their “huge” network of opportunities. They claim to have worked with everyone and can easily get your agency in the door with the brands you want just through their sheer charm and extensive array of friends and ex-colleagues.
If you want to use a network to win new business, every agency should start by actually mining their own network first. Most agencies I speak with have a huge cache of network connections that they have not even begun to take advantage of.
Stop scratching the surface of your contacts, stop depending on an outside rainmaker, and start mining away at the connections that have been sitting in front of you the whole time. Here are a few tips to get started
1. Create your Core 100 Network- Sit down and go through a list of every past client, every current client, vendors, industry colleagues, and people from school. It only takes a few minutes to build up to 100 people that can absolutely begin making a difference in the number of referrals you receive over the coming months. Those 100 people need to be put into a personalized communication cadence where you reach out to each person at least once a month, even if just to say “hi”. Sound like a lot? 100 people in 20 days, that’s 5 emails a day…or 15 minutes if it takes 3 minutes per email. Not a lot of time at all.
2. Don’t only track your prospects, track your clients- Set alerts in LinkedIn, Google, and Winmo for all of your current clients. In Winmo’s database, they see one-third of their data points change every 6 months. This means that your current client’s teams are constantly turning over, especially in the lower ranks. Get to know those people and track them. They will eventually leave your current client and land somewhere else, and that’s a much easy intro to that new brand when they have already worked with you.
3. Have a real conversation with your network- This means you don’t just send a monthly newsletter telling everyone about what has happened at your agency. Take the time to reach out to each contact in your Core 100 with a personalized message. It may be as simple as a “hello, how are things”, to a more involved request of an introduction to someone that they know. The idea is though that we are producing real conversations with these contacts by talking to them, rather than talking at them.
To keep your pipeline full of qualified, referral-driven leads, continually stay top of mind with your tightest contacts that have seen and been beneficiaries of your great work.
I get asked every day by agency principals, “If I begin proactive outreach for the first time, how much time and money will I need to invest?” Of course, this is a loaded question, and the answers vary depending on the size of your agency and how you want to tackle outbound prospecting.
One of the most significant challenges agencies face is deciding who should take on the role of business development. Should it be marketing, should it be sales, or do we just pass it to an account manager with extra time?
To develop a proactive prospecting outreach that delivers results and proves ROI, there are several things you need to consider.
Who will handle the role of business development:
Depending on the size of the agency, this task has typically fallen on the shoulders of a creative or account manager within the agency. The problem with this model is that a creative or account manager doesn’t usually have the traits or characteristics required for a new business development role. Besides, they are a million other tasks to handle throughout their day, making it impossible for them to be 100% focused on generating qualified leads.
For a truly successful proactive new business process, you should have at least one person dedicated full-time to outbound prospecting. It is a crucial component of your agency’s success to have someone consistently communicating with your target market and enticing those audiences to interact with your organization. Even if they aren’t ready to close the deal today, the correct prospect nurturing program will keep your company top of mind when the time is right.
The hard costs of a dedicated new business professional:
Proactive new business development is not an easy job. These individuals are reaching out to the market each day, and while they have some big wins, they also have some significant losses. The constant up and down nature of the business can be difficult, and the right compensation is necessary to keep them motivated.
List Partner’s CEO, Dave Currie, suggests, “Pay your new business people early and pay them often.” With over 23 years of experience in the new business space, Dave shares that instant gratification is the key to your new business developer’s motivation. This means your new business person should get base pay followed by compensation. Depending on the size and geographic location of your agency, your business developer should be making a base of $65-165K per year with 8-12% commision on each client won for the agency.
Hiring the right person for the job:
I think we can all agree that some jobs just require particular personality traits and in business development, it is no different. When hiring for this role within your agency, look for high energy, highly organized and time efficient individuals. More importantly, seek people who are inquisitive and naturally curious as they will be extremely valuable in finding new ways to reach your prospects. Of course, these traits may require a few interviews and examinations before being exposed, but this individual is an investment; spend the extra time finding the right fit.
While you’re searching for the perfect candidate, don’t make the mistake of assuming that just because they have never worked for an agency before that they aren’t qualified or can’t be a good fit. Dave Currie explains, “Actually, it’s not important at all for the new business hire to have previous agency experience.” Of course, they need to have an understanding of the marketing ecosystem, but overall, studies indicate that the most successful people in prospecting roles come out of higher volume transaction based roles in AdTech, MarTech, media sales and other like-industries.
The costs of prospecting tools and resources:
Once you find the right person for the job, you need to supply them with the tools to be successful. This will be another crucial investment to come along with your agency’s new business journey. In addition to the free resources such as email and Google Drive, there are three key technologies you will need for success: a prospecting tool, a CRM and marketing automation.
- Prospecting Tools– You will need a prospecting and intelligence resource with the ability to keep track of the ever-changing nature of the advertising industry.. Sales intelligence platforms (shameless plug – like Winmo), provide you with an accurate, comprehensive database of potential prospects that can help you scale your outbound efforts effectively. Sales intelligence platforms typically cost between $7K-$12K annually.
- Customer Relationship Management (CRM)– A CRM software is imperative as it allows your entire organization to manage all of your prospecting and customer data interactions in one place. The ultimate agency tool, CRMs provide pipeline transparency and help you become more efficient at forecasting your revenue. Depending on your business needs, CRMs can go from free to pretty expensive – $115K. When purchasing, make sure to have a clear understanding of what features are necessary or nice-to-have.
- Marketing Automaton– Unless you want to send emails one by one to huge, highly targeted lists, you will need to invest in a marketing automation tool. Marketing automation resources will send and track your email outreach performance, and depending on additional needs you might have, can help you with lead scoring or even manage most of your content distribution. , Typically, an agency will spend 3-5% of its marketing budget on a marketing automation tool.
“Inbound only” comes with a price:
Every marketing agency in the history of marketing agencies would prefer for their clients to come knocking on the door. Unfortunately, that’s not always how it works. Sure, your agency could have prospects come from word of mouth referrals, and your phone may ring throughout the day, but having a consistent outbound process will jet fuel your inbound interactions.
An “inbound only” prospecting model comes with a massive loss in opportunity cost. Waiting for qualified opportunities to seek your firm out prevents you from controlling the destiny of the agency’s growth. It also prevents you from managing the agency’s strategic direction as you can’t measure when an opportunity will come along or the value and profitability that will come with it. This will eventually snowball into other problems such as a hindering growth rate, lack of retention and difficulty recruiting talent.
To align your outbound and inbound efforts, I’d recommend having someone on the marketing side dedicated to handling all inbound queries. This way you are covered from each end as you have one person dedicated to your outbound process and one person committed to the inbound.
From salary, technology stacks and opportunity costs, the annual price of hiring someone in-house to develop proactive new business is quite expensive. Wouldn’t it be nice if there was some kind of outsourced proactive new business service? Well, your dreams have come true.
Catapult New Business can have a person in market, actively prospecting for your agency within 30 days. Coming fully equipt with years of agency new business experience, an aggressive technology stack and free of opportunity cost, we offer a more affordable and effective option than hiring in-house.. Ready to streamline your new business process? Contact us here or give us a call at 404-574-1974.
I would love to start off this blog on a positive note, but the fact is every day I speak with agency execs that are struggling to come up with any form of successful outbound prospecting efforts.
Typically, I hear “We tried it, it doesn’t work, so we stopped trying”. It’s painful to hear their frustration knowing that, most likely, there isn’t just one factor holding back their outbound success, there are a host of issues.
After a decade and a half of outbound prospecting, here’s the most common mix of issues that I’ve seen plaguing agencies today:
1. You’re not doing it enough
One outbound email DOES NOT equate to an outbound campaign. It was one email, that’s it. When was the last time you replied to the very first inquiry from a possible partner? Sure, sometimes it happens, but the fact still remains that it typically takes anywhere from 8-11 touch points to take a cold prospect from totally cold to a needs analysis conversation. If you are going to hit 11 touchpoints, you better have a consistent outreach strategy and understand that some of those emails, voicemails, and social touch points are simply set up pieces for other touch points down the road.
Real life example: While working for a digital client previously one of our reps had a cadence of 2 emails, 1 call, 1 email, 1 social intro, 1 email, and then 1 call. Turns out, that 2nd call caught their attention, why? Because they’ve been buried with a new product launch for 2 months and while they noticed our outreach, they just weren’t in a place to respond. Because our rep stayed on it with value-driven touch points, the 7th touch and 2nd call were answered, recognized, and lead to a great conversation and six months later a piece of new business. You can’t stop at just one touch point.
2. You’re not contacting enough people:
Too often when starting with a new client they share with us a spreadsheet of their current targets list. It’s almost always an excel document and it’s almost always way too short. Like 15 prospects deep with a bunch of info about each one of those prospects, with no real results from them. The fact is, if you were to build a list based on the factors that make those companies a “Right to Win” target, then you can probably run that list in a platform like Winmo and find hundreds of other prospects just like them. There’s a huge ocean of opportunity out there that even if you stay highly targeted by company type, size, vertical, region, etc, there is most likely more prospects than you think that you can win. If the average conversion rate of a cold prospect is around 5%, you better have a bigger starting number to go after in order to produce enough meetings that will eventually turn into revenue opportunities.
Real life example: A regional PR group I recently worked with had decided that Atlanta was the only place that they had a “Right to Win” because prospects would want someone close by. We began expanding that list beyond the Atlanta area and created a South East regional list that did increase the distance from their prospects, but allowed them to still tell a compelling, identifiable story about their southern roots and how they are best positioned to work with those brands.
3. You’re only talking about yourself
An absolute conversation killer is an ability to ONLY talk about yourself or your agency. Too often we see copy coming from new business folks that only talk about their agency and the services they provide. News flash – prospects are selfish. They don’t want to hear about your agency, they want to hear about themselves. New business teams need to work to find the types of problems their prospects are running into that they can solve for them and then talk to them about those problems in every email, voicemail, or social post. There’s plenty of time for your prospects to learn about your agency later, for now, let’s get them in the door by shining a mirror on them and their issues.
Real life example: A digital shop in NY I worked with had recently won two awards for a project. They (rightfully so) were proud of that work and wanted to show it off. They created a cadence of three visual emails that talked about the award they won and then showed different pieces from the work. What they didn’t do was explain why the work was needed in the first place. If they had shown that the work solved a particular social media issue then it would have been easier for prospects to identify with themselves that they have that same problem, and the campaign would have been much more successful.
4. You’re only using one communication channel:
Email is not a silver bullet. Cold calling doesn’t work in a vacuum. And Social Media is not meant to be used all alone. Every prospect you want to work with is constantly living in different social spaces and each one has very different feelings on those different communication platforms. We, as new biz people, never know exactly which communication channel is going to hit home with any individual prospect so don’t limit your prospect pool and outreach by only using one channel. Sometimes a prospect just needs to see you in multiple places before they respond. Taking a multiple channel approach shows that you’re a real person, and not a bot mindlessly spamming their inbox.
Real life example: We recently took over the new business for an experiential firm out west that was only promoting themselves through LinkedIn. The problem is that the higher level contacts that they were aiming for just weren’t responding to their promoted ads. We took those posts and began sending direct messages through email, voicemail, and then a physical direct mail piece. Within two months, we had received three opportunities to pitch with prospects that they had been targeting for years. Different channels breakthrough to different people.
5. You’re missing the right person to run your program:
I’m not saying your new business person is bad at their job (though maybe they are). What am I saying is that if you don’t have someone whose job is exclusively, 100% concentrate on generating new business opportunities, then it’s never going to be a successful effort in the long term. You may have wins here and there, but in order to create something repeatable and scalable, you have to have focus. That means the agency Principal can’t be the only person prospecting. It also means you can’t have every Account Manager only giving it 20% of their time. You need someone who spends every day hunting for opportunities, promoting the brand with vendors, networking with current clients, and touching their outer networks with valuable content. If you can’t do this with all your focus, then you are always going to find yourself trying to play catch up whenever you have any client turnover.
Real life example: A client of ours in Boston had a New Business Director that also moonlighted as an Account Manager. This person was outstanding at generating new business when they had the opportunity to speak with prospects, but they spent all of their time between two-time consuming tasks – filling out RFPs or handling client fires. We came on board, put a person in place to spend their full time prospecting for this individual and convinced the agency President to hire another Account Manager to take this person’s work over. We immediately saw an increase in referrals as they were able to concentrate on proactively growing their network, while we proactively prospected new clients. Focus changes everything.
These five problems are painful to hear, I know, but that’s probably because the truth hurts. If any of these issues resonate with you, it’s time to do something different. If you are ready to grow your new business and have more qualified meetings starting this month, give Catapult a call today.
Do you know the difference in good and bad content for new business? More importantly, can your team create useful content for new business? In this month’s webinar, Matt Chollet from Catapult New Business and John Heenan from #LetsGrow! will be walking you through the common mistakes and best practices of agency new business content.
You don’t have to be a geneticist from Harvard to know if Business Development is in your agency’s DNA. You can just feel it. It either comes from the top down and is embedded in your agency on every level, or it isn’t. It’s that simple.
Things get complicated when you find yourself working for an agency that doesn’t have this in their DNA, but you’re in charge of creating new business opportunities. How do you go about creating a proactive business development environment in a place that has none? Here are a few tips we’ve seen work at any size company.
1. Get buy-in first and foremost from the very top. Founders, Partners, CEOs all have to be invested in the idea of proactive business development. You can certainly create a groundswell of support from the bottom up, but it’s much more difficult if you don’t have buy-in from the top and the most vocal people within an agency. People want to follow a respected leader and if that leader isn’t ringing the new business bell every day, then people don’t know who to follow or where to go. Also, how do you go about getting the resources you need to build a new business tech stack without founder buy-in? Leadership and resources are necessary for any business development effort, so make sure they are on board.
2. Start reporting on new business. Too often nobody outside of the New Business Director or the CEO know what prospects they are chasing or speaking with. This leaves teams in the dark and de-prioritizes business development. Reporting weekly both verbally and in writing somewhere not only holds the new business team accountable but gets everyone in the firm involved in thinking about business development opportunities that they may run across throughout a regular day.
3. Celebrate the victories and acknowledge the failures. Once a piece of new business is won, we see pitch team’s celebrating and then immediately handing down workloads. A lot of energy goes into winning a client and recognition needs to be made across the agency in order to help people feel appreciated for their past work, excited for the future, and accountable for their immediate tasks to get things kicked off. On the other end of the spectrum, if you lose a pitch, a lot of time it gets pushed off that we lost because of price or “the client just didn’t get it”. The pitch team, plus other impartial members of the agency, should take time after a loss to analyze everything and try to understand why the client didn’t see value in what we produced. Fact is, you never lose because of price, you lose because they didn’t see enough value in the price you put out there, so how do we better present that value?
In summary, change your agency’s DNA by getting buy-in from those with the most influence in the agency, start creating accountability for the new business team, and recognize the accomplishments and failures of that team to better learn how to create more successes.
If new business is a race, would you say it’s better to spend your time looking forward or backward? Do you run with your head turned backward watching mile markers get further away? Or do you watch those mile markers in front of you get closer? I would highly suggest not looking backward whenever you are running, and the same goes for your new business planning.
As any agency approaches this process of planning, it’s important to note there are two different types of measurements that can change not only how you evaluate the race that is your new business program, but also predict your future success. Those two are Lag Measures and Lead Measures. Let’s break them down.
- Lag Measures – These are backward looking measurements of a result that has already happened.
- Lead Measures – These are forward-looking measurements that are predicting a result that will happen.
In 2018 your agency needs to be looking at Lead Measures and how they can help you forecast revenue, new clients, and staffing needs. Too often, I see agencies looking at only lag measures to determine how they are doing with new business. They look back at measures like number of leads created or revenue generated and then try to determine what will happen in the future based off of those results. Closing a new client in August has no bearing on September’s chances of closing a piece of new business, so why do we forecast this way?
The best example I have seen of an agency using lead measures was based on two factors. First, my agency measured the number of “engaged conversations” that they have each month. An engaged conversation was defined as one where they determine money, authority, and need from a prospect. They knew that if they had five of those calls a month, that would lead to enough pitches to hit their new business goals. The second measurement was based on lead score. Any great new business program will have a marketing automation built into it and that will include lead scoring capabilities. This lead scoring mechanism gave my agency the ability to judge just how effective their sales and nurture campaigns were and allowed them to prioritize prospects to go after. They set a score level of 25 points as the definition of a Marketing Qualified Lead (MQL). The goal was to create 15 MQLs a month, because if they got 15 MQLS, then they could have at least 5 Engaged Conversations. See how each of these begin to predict one another?
As your agency begins to set your new business goals for the year, take a look at all of the different ways that you measure the success of your program. Take those measurements and put them either in a Lag or a Lead bucket. The majority of those will probably fall into that Lag bucket, and it’s fine to track those, but we want to start prioritizing the tracking of those Lead measurements. If you can find two dependable Lead measures, then you have not only simplified what you need to report, but you can also begin to set realistic goals for 2018 that will actually drive you to more new business wins!
If you were a baseball manager, would you send your best hitter to the plate without a bat? Everyday I see more and more agency principal doing just that thing. They hire a Business Development Director and then send them to bat without any of the tools or strategies needed to actually win and develop new business.
If you’re an agency principal and hiring a new Business Development Director is in your near future, make sure you commit to support them in the following ways before you bring them on board:
- Commit to financial investments beyond their salary. If you’re going to invest in new business than do it, for real. Hiring a person and then giving them zero dollars to invest in technology, data, process, or content is setting them up with failure at the very beginning. Yes, they should be able to use the phone and email, but expecting them to be able to do it at scale without a CRM, Marketing Automation, complete website, etc, is essentially tying their hands behind their back at the very beginning. This means that when you are committing to new business, you are committing to the financial cost of not only the human capital, but also the technology the profession demands.
- Commit to have a clear and differentiated agency promise. If you as the principle of an agency can’t describe your agency, what you do, and what makes you different in 1 sentence, then how can you expect your new hire to? Take the time to go through a positioning exercise with a professional and sculpt a unique position in your niche in order to help your new hire not only communicate to new prospects, but also find them easier. The clearer your position is the easier it is to drill down to exactly the types of prospects we should be chasing and ensure that we can better communicate with them.
- Commit to Always Be Creating. ABC. If you want them to Always Be Closing, you better Always Be Creating. This means they need thought leadership in the form of blog posts, white papers, or webinars. If you do amazing work for a client, actually track and get results so that the team can build a case study to share. There is nothing worse than having a great conversation with a prospect, the prospect is intrigued and asks the new business person for an example to see, and they have nothing tangible to put in front of them.
- Commit to set realistic timelines and goals. History comes into play here. If your agency has literally never won a piece of business from cold outreach, don’t give your new Business Development hire a three month runway to get a deal in. Set realistic KPIs based off of activity, engagement, proposals, and revenue. We all know that Business Development in our world takes time, so setting meaningful KPIs on each of those four areas allows them the comfort to know what is expected, shows your commitment to them for the long term, while also holding them accountable to performing the proper activities in order to build momentum. Transparency breeds positive interactions between sales and management.
- Commit to having an open mind. As an agency principal sometimes it is very difficult to defer to a new hire. A new hire often comes in with all sorts of ideas on positioning or process that may very greatly from how you initially set up the shop. My advice is that you don’t have to change anything just because they say you should, but you should be open to them being critical of how we have been positioned in the past and open to at least a discussion of how a prospect may view you. Their outside insight may be just the thing that helps you break into the minds of new prospects.
If you set out at the very beginning of the hiring process with these commitments in mind, you should have two very positive outcomes. First, the hiring process should be easier, because your position will be more attractive to any experienced new business pro. Second, that new hire will actually have every tool, process, and strategy needed in order to succeed. At this point, you have done your part, now they just need to hit the home run.
Two minds are better than one. At least that’s how the old saying goes. But what happens when those two minds (or three or four) get caught up in a groupthink cluster? While the idea of working together to gain consensus around important growth driving topics (like new business positioning) might sound like a great idea, it’s important to steer clear of the potential dead end road groupthink can take you.
So why is consensus so dangerous, especially for agency new business?
Similar past, similar future
Many times agency executive groups that are setting out to develop unique positioning come from places of similar past experiences. Most of our agency VPs and C Level execs started somewhere outside of new business. Perhaps they started within Account Management or creative, and as such, they have very little experience within the new business world. This then shapes our opinion of how new business is done, how it should be done, and what works and doesn’t work. Often, they have faced new business failure in the past when they tried something new, and because we all are hesitant of repeating a mistake, we agree to steer away from that “new” again.
The problem with steering away from the “new” is that an agency can wind up repeating their mistakes again and again, because they never truly change. True change comes from a holistic look at how you approach new business, not just purchasing one piece of new technology or a new website design. While those pieces are important and can affect some of our experience and results, they won’t fully change your new business for the better.
Let’s look at a real life example: ABC Agency’s executives have decided that their positioning is great… “we solve problems that can’t be solved”. Because they all have the same experiences in the agency world, nobody stops to ask questions like:
- Is this really interesting for new business?
- Is this positioning true of what we have done in the past and want to go in the future?
- Does this even make sense!?
So if your agency new business positioning discussion seems to be running uncomfortably smoothly with nobody challenging one another, think about applying some of these ideas:
- Invite someone outside of your exec team to the positioning meeting. Maybe even invite someone from outside the agency to get an outsider’s feelings on your positioning.
- If you’re the leader of the meeting, listen to other people’s ideas before expressing any of your own opinions. Leadership opinion can sway opposition opinion and accelerate groupthink.
- Challenge any assumption that has 100% approval. You may find it is a solid assumption, but challenging it can also be a great way to identify a blind spot.
Those few steps can help ensure that your new business efforts won’t get self-sabotaged with groupthink consensus. Having that outside perspective and the openness to challenge assumptions can ensure that your agency stands out among your competition.