It’s Q4, and many agencies are strategically trying to plan out their new business efforts for 2019 while brands are thinking about their marketing plans. This year, like every year before, we have seen massive changes across the entire marcom industry. From rapid technology advancements shaping the digital landscape to consumers taking more and more control over user experience, we all stuck asking “what’s next?”
Posts Tagged ‘podcasts’
How Much Does New Business Cost?
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.
Does your agency have business development in it’s DNA?
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.
How groupthink just killed your agency new business goals
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.