Can you believe we’re approaching an entirely new decade? As you begin planning for 2020 new business, remember to plan the resources required to support that growth in the new year. While those resources will be unique to your agency’s specific growth plan, it never hurts to follow a proven formula to calculate what you need. To help with this forecasting, we’ve built an Agency Growth Calculator which evaluates your objectives and realistic requirements from each of the following steps of the agency growth funnel.
Understand Your Growth Requirements
Your KPIs are a direct reflection of your overall growth requirements. While this may seem obvious, some agencies find it extremely difficult to clearly identify their metrics for success. Here are some questions to answer during your initial planning meetings to ensure you set the right metrics:
What’s your overall revenue goal?
While there are many approaches for setting your revenue goal for the year, make sure it’s nailed down and clearly communicated prior to the new year so all parties can set operational KPIs off of that plan.
How much have you grown organically?
This gives you a good idea of the outbound effort you need after organic growth.
What’s your typical churn rate (loss of clients)?
You can only put so much on top of the funnel if you’re losing all of it at the bottom. This is why it’s important to understand how much revenue is falling off each month.
How big is this goal in comparison to new business amounts you’ve produced in years past?
Knowing how much you’re planning to grow new business Y/Y is important, particularly so you can understand the resources required to achieve that growth.
What’s your overall pitch win percentage and what’s the win percentage when they are inbound warm leads vs. cold opportunities you have generated?
Be honest when answering this question; the higher pitch win percentage you have, the less outbound effort will be required. Keep in mind that warm opportunities close at a higher rate than cold opportunities.
Have you ever generated a cold pitch opportunity before?
Many agencies rely on referrals for 100% of their pitch opportunities. While those are warm and close at a higher rate, they are not reliable or sustainable. Evaluating this gives you a better understanding for how long it can take to produce cold opportunities in the future.
Define Warm New Business Opportunities
It’s important to understand the amount of new business opportunities your agency brings in. These opportunities typically come from referrals, networking, and word of mouth. And let’s be honest, who doesn’t love these lead sources? They are seen by most agency principals as the most attractive type of lead as it’s free business that came directly to you.
To help generate more of these we recommend activating your core 100 network. We define this as the core network of decision-makers with budget or marketing decision power that you have a 1st-degree relationship with. By connecting with this group at least once per month, whether a simple hello or providing them with relevant thought leadership, the likelihood of getting more referral leads increases significantly.
Lastly, while warm opportunities are nice it’s important you aren’t solely relying on them. Here’s why:
- They are unpredictable and you never know when your next project will be coming in.
- You have no control of how your portfolio expands.
- Losing one major client could drastically impact your revenue.
Now let’s talk about how you can warm opportunities with cold prospecting for ultimate success!
Add Proactive Prospecting For New Opportunities
Since you can’t solely rely on your referral network, you must find a way to incorporate cold prospecting into your mix. Often new business directors will wonder how much outreach is enough? How many phone calls and emails will result in a qualified meeting? We recommend tracking your success rate at each touchpoint. This allows you to know if you are consistently reaching out to enough prospects in your outreach cadence. Proper measurements typically include:
- How many people typically reply to a cold email or call?
- Of those replies, how many of them turn into a discovery meeting/call?
- What number of discovery meetings turn into qualified leads?
- How many qualified leads convert to RFI/RFP opportunities?
- What’s the win percentage of RFI/RFPs for your agency?
If you’ve never kept track of these numbers before, you can use benchmarks.
Our clients typically see conversion rates of:
- 12% – 15% opens to cold emails (above industry average of 5% – 7%).
- 7% – 10% conversion on call volume to live conversations.
- Approximately 25% of leads moving to discovery and qualifying.
- And 60% or more qualified leads moving to an RFI or RFP.
Agencies that are just getting started on proactive outreach can see numbers a bit lower than these. Keep in mind many agencies underestimate how many prospects they actually need in their pool and keeping steady pipeline is a full-time job in itself. Make sure you have the resources and bandwidth necessary to fuel the fire.
Estimate The Investment: Time and Money
If you’re an agency executive responsible for driving new business and running the entire agency, be aware of what that double duty is costing you.
If you’re juggling too many tasks, it’s likely you are completing projects, but not doing them exceptionally well. As an agency executive, your time is best served strategically looking at ways to grow the overall business, not just through the lens of new business. If you’re worried about the time and investment it would take to hire someone in-house, we can manage this function for you at Catapult. There’s huge potential in having someone solely focused on bringing in both cold and warm opportunities for your agency.
Now that you have a better understanding the agency growth funnel, what goes into forecasting your new business goals, and the resources required to hit them, check out our Agency Growth Calculator to see how the numbers line up for your business!