New Business Hawk

The New Business Budget Game: Up to Six Million

To avoid discounting your work, we believe agencies should discuss money whenever a new job or project is brought up, right when the assignment is first mentioned by the client.  It’s a way to open up negotiations over both job specs and job budget.

Our approach is to start by asking, “In round numbers how much are you planning on spending to get this done?”  Now wait until the client responds.  The client has two options. 

Option #1 is to ask you back how much it will cost, and the agency person needs to move towards suggesting a budget range by discussion first the job specs and then by picking a high number to test the waters.  If the client responds, “That sounds about right,” then you know you have guessed too low. 

Option #2A.  If the client faints or grabs for his or her heart, then you have guessed too high, and you need to move down in a series of bracket jumps.  It’s fun to do.  The key point is to remember that you are not estimating the job at this stage, you are just trying to understand the importance of the job.    

Option #2B.  If the client gives you a number, your account staff should be trained to immediately say, “And as much as….?” You are assuming the client has given you the bottom number from a budget range, a normal assumption.  And now you are asking how high to probe for the upper range. If you get a new number at this middle stage, immediately ask, “And up too?”  Here you are assuming there is a very top number in the range, and you need to know what it is. 

This is simple negotiation in a process we call the Budget Game.  And your agency staff needs to be trained on how to play it well.  It takes less than a day to learn and it will make your firm a lot of money over the years.    

Running back to a client with a production estimate when you don’t have any idea what the client expects to pay, as so many agencies do, is very very foolish.  It’s not a smart way to do business because you lock yourself into your own expectations about how important the project is to the client.  And you lock your agency into living off production budgets.

Case Histories  

Our files are filled with actual stories of how well this simple negotiation technique from the Budget Game has worked for agencies around the world. 

Here are some favorites.  A mid-sized agency asked their client, a medium-sized manufacturer in Ohio, a client for ten years, in round numbers how much money were they thinking of spending to launch a new home improvement kitchen product?  The client responded, “Up to $6 million.” 

The account handler was so shocked at the size of the budget that he forgot to ask the follow-on question of “And up to?” as he had been trained to do.  That afternoon the agency president told me by phone, “Guys, do you know what we would be doing this afternoon if we had not asked that simple question?  We would be working on a campaign launch of about $450,000.  That’s the usual budget range we suggest when work with them.  We have had the account for years, and we never knew they could pull the trigger on that big of a new product launch.  Thank you so much for showing us the way.” 

Another $300,000 Found

The president of a direct mail company called to report his junior account executive had just returned from a client office so excited that the Budget Game had worked for her the very first time she had tried it.  She had asked a client the “round numbers” question and the client had said $200,000.  She moved the client up to $300,000 for the next number and been told that the client couldn’t go over $600,000 on the project.  The junior account executive was excited that the Budget Game had worked so well her the very first time. 

The agency president wasn’t excited at that.  He was excited at the new monies that would have been left on the table without his most junior AE asking a simple question, “In round numbers”, and then knowing what to do with the answers. 

Big Black Eye

Before I knew about the Budget Game I got a big black eye on a large regional brokerage company.  I had been part of the team that had won the account and now I had been assigned to work on the client.  I was new to the agency, a junior AE.  The ad manager asked for a media recommendation on using the Wall Street Journal to launch their new brand look we had recommended.  I was young and so charged up.

I bounded back with a media budget recommendation that was six times larger than anything the ad manager wanted to see.  And he ripped me up and down and almost fired us.  We had flashed to him that we really didn’t know his business.  We kept the account for years, but after that I never again went back to a client with any recommendation without knowing what the client expected to pay first.  It was a life-lesson that I never forget.  And the best place to find that number is to ask for it when the client first mentions the job.  Your staff might need to learn all that now.

The Heartbeat Of New Business: Types of Leads

When thinking about generating leads its helpful to have a system to classify the leads that come your way. This way you can focus your efforts and not get wrapped up in wasting time on leads that you have little chance of winning. 

Bronze Leads

• Sent RFP
• Sent RFI
• Get a request for capabilities presentation to screening committee
• Receive a request for a written proposal

Silver Leads

• Receive a request for capabilities presentation by key decision maker
• Included in review by search consultant
• Get a lead from vendor or supplier
• Ask for you to bid on the work

Gold Leads

• Wants you to stop by and meet one-on-one (quiet visit)
• Asks to come by and visit the agency (quiet visit)
• Wants to discuss the account privately (quiet visit)
• Offers a test project to work on

If new business is the lifeblood of the agency, then new business leads are the heartbeat. And the best new business leads are the “quiet visits.”

Agency people who are untrained in important new business "quiet visit" skills see the first visit with a prospect as an opportunity to tell all about the firm in loving detail. These untrained agency people love to talk fast during their detailed capabilities presentations so they can cover more ground. It’s a way of speaking that clients often call the “Vomit Comet.” That’s not the way agency people trained in Torch work.

Probably going on in a client’s office near you…

I just read an interesting article on how local businesses in a small resort town are asking the city for better reporting, more accountability and standardized metrics. 

Shrinking revenues are demanding that the town become far more fiscally accountable so that funding is directed at the most productive activities.

Some of those who are attempting to analyze the productivity reports that are submitted claim the lack of financial or demographic data standards makes it impossible to fairly evaluate the productivity from either an economic or community-relations perspective.

Now change the players.

The city is the marketing manager, brand manager, or director of advertising at any one of your clients. The business leaders are acting as the C-suite. CFO, CEO, CMO, etc. In these tough times every action, every marketing plan, every cost will be studied. Analized. Picked clean.

What are the goals? How will we measure success? What is the ROI?

This is something business consultants in the world understand, and something they build into their proposals each and every time. Call it a cost/benefit analysis, matrix reporting, measurable deliverables, but they speak the language of the C-suite.

How is it impacting your business and what are you doing to deal with the changes?

Expecting things to remain the same is not an option!

Zen of New Business

Again and again,

The impossible problem is solved.

Again and again we see an agency can grow,

Once we understand that the impossible problem of limited growth,

Is nothing more than a series of tough decisions,

Waiting to be made.

For today to be a success,

Today has to be a day of decisions.

The lack of agency growth is all about what takes place within an agency. It’s rarely what takes place outside an agency.

It’s not time, nor talent, nor circumstances, nor location that holds an agency back. It’s the agency that holds the agency back.

The biggest barriers to agency growth are past prejudices, bad habits, lack of knowledge, limited management priority, misplaced resources, and poor leadership. These barriers can be overcome in when the management team makes decisions and sticks by those decisions.

What are you doing to help your agency overcome the barriers that limit growth?

Something remarkable occurs when an agency takes action and focuses on growth. We call it the Zen of New Business. Once you decide to tackle new business, reach out and call, engage in learning a different approach, focus for just a bit, take action, you've tapped into an unusual agency phenomenon; Typically we find that within a few weeks of being on-site with a marketing firm a new business opportunity lands in their lap.

We're never sure why, or how this happens. Is it the firm’s desire for the recognition and acknowledgment that growth brings? Some hidden connection in the universe?

Or just the simple concept that by taking action you've created a heighten awareness and are more responsive to what would have been a hidden opportunity...

After all, growth is the ultimate accolade that most agencies, and by extension ourselves, seek.

And if by having us bring the necessary attention to solving your new business issues and finally understanding “We are good. We are really good” then half the battle is already won.

That's the Zen of New Business.

Who Is The Most Important Client At Your Agency?

Most agencies are spending way too much time on their accounts and not enough time on the agency’s business. Look in the mirror, the most important client at any agency is the agency. The most important account that gets the least attention at most agencies is the agency. Our DayOne planning and strategy session helps agency management reset its focus back on growing the agency’s business.

We just finished a DayOne with a great agency. They were a bit scared as the general feeling was they were too small – a staff of 3. However, by the time the day was up everyone was energized, excited, and several new business opportunities were discovered. In addition the agency brand was revamped and better positioned for growth.

In a few short hours this small agency was infused with new life. The agency president just sent me this note:

"Thank you for a dynamic session. Everyone is pleased by the process and feels we have achieved a great sense of focus and mission."

I expect to hear of a new business win any day now!

HawkTails: Account In Review or Win The Pitch

The message was left with a hint of desperation in the voice, "Please call ASAP!" Checking the time it was left late the night before. So we called...

It seems the agency, a healthy, growing midsized firm, with good creative chops, had made it into the final round of a review.  A review the agency really wanted to win. That if they won it would change the course of the agency, putting them on the map, fame, recognition, hope.

The problem was they were the last agency in. And they were going against some of the best agency brands in the business. Brands we all know. And who hate to lose.

And our little agency was already in last place.

Within the agency some of the "boo birds" were starting to chirp. They had no chance of winning. They should bow out. The competition was too tough.

One of the senior staff remembered what we said at a conference she had attended; when you arrive at a critical moment for your agency, a crossroad, give us a call. You never know...

She made the call.

The Situation: Last place going in. Large account. Never worked with an independent firm. Procurement running the review. Lots of process. Competition was all multinational or national name brands and any one of them a safe bet to win.

We thought our client could win.

The call: Win the chemistry battle and out process procurement. We spent several days working with them on the structure, process, staffing, storyline and flow of the pitch. Every detail was worked out, from the brand strategy to the type of glasses used during the break.

The pitch: They went in with all the little details better organized, thought out, and structured. Little technology, more interpersonal relating. The meeting had a good flow, logic trail, and led to a strong recommendation. At the end of the first hour the team had refreshments brought in with silver and linens. The second hour was used to fill in the details, provide some additional planning discussion and answered any additional questions. Again, they ended on a planned high note - going out strong. 

The win: With procurement calling the shots after the final agency presented the score sheets were tabulated. A tie. The agency and one of the big shots were tied. So procurement put it up to a vote with the marketing people – who would they rather work with?

Our agency won.

Number one reason given? The refreshments. Specifically, the linens.

If it had been any other client we would have not brought the linen in, but having been through this type of pitch many times we knew how to profile this brand. We knew they would love the linens.

Give us a call.

800.899.1538

4 Easy Steps To Help Your Brand Stand Out In The Market

Recently I was working with a great agency, around 15 people and some outstanding work. They were well known in their market, but had been defined within that market as a certain type of marketing firm. While there were many pitch opportunities in the area it seemed they were almost never called.

Why?

Over the past few years by not defining their brand they had allowed the market to brand them. And as their capabilities had grown and improved, they failed to communicate that with prospects.

Even worst, the market perception for the firm was out-of-date and just plain wrong.

So here are 4 easy steps to help your brand stand out in the market.

Agency Focus – In this cluttered market place only an expert has any chance of standing out. Business leaders don’t have time to educate someone on their unique situation. An expert understands their product, their service, and knows how it can benefit customers. OR an expert knows their customer better then anyone. OR an expert has a unique view of the marketing landscape. Find something to be your area of expertise. Just being a “full service highly creative marketing firm that offers outstanding service” isn’t enough any more!

Make New Friends - We all now that people do business with people whom they like and trust. Choose to make a new friend over just creating a new business transaction. This will pay off in the long run.

Effectively Communicate - Establish yourself with your target market by creating a dialog on things that you have in common. You must be able to establish a relationship. With lots of people. This generates understanding and builds business over time.

Find Opportunities To Speak – Become a speaker to your target market, and educate people on both the changes hitting their market as well as the challenges they face. Provide Solutions.

There you go… 4 easy-to-forget strategies that can help you establish your brand in the mind of your ideal prospect. And just then, once they’ve heard of you, perhaps know you, and think you have some solutions then they will call you.

 

Fishing in Troubled Waters - New Business in Tough Times

A recent B-to-B Magazine headline shouted, “Desperate ad agencies scramble for business.” There is no disputing that the current climate is the most challenging our industry has experienced in memory.

The traditional advertising agency model is under attack from all sides. From the strategic side agencies are being pushed out with the increasing impact of consultants; search, procurement, brand, marketing, and of course, the big fish, management consultants. On the tactical side agencies have to compete with all types; design, internet, database management, media buying, promotion, direct, special events, sports marketing firms, corporate identity houses, two guys and a Mac, and more. This is troubled water.

A recent poll among advertisers indicates the current tenure for a marketing manager is only 9-18 months. These new Marcom Managers are younger, have less experience in advertising, are more focused on tactical issues, and recognize that they are only there for the short term. At the same time they have a wider span of control over marketing and budgets, and they want their own suppliers – people who think and look like them. Not surprisingly they don’t take advice very well from traditional agency staff that often comes across as patronizing. More troubled water.

Client turnover is among the more serious challenges within our industry. Some recent studies show that for smaller accounts the churn, or client turnover, can be as fast as every two years, while larger accounts have gone from seven years to three. Clients, these new Marcom Managers, are growing more and more impatient and are quick to question the effectiveness of their current agency. The growing percentage of project-based work has made it easier to change – click to what’s next. Yet more troubled water.

Design studios and other low-cost providers have seen revenues increase as their agency brethren have suffered. These creative firms are organized and operate tactically. They are taking business away from traditional agencies on account of price, speed and timely delivery. Many other specialty shops who often work faster, are more focused on results, and offer tangible benefits to clients are also seeing an upswing in new business. Clients are questioning the value of all the layers at the agency; account service, traffic, and all the administration. Further troubled water.

There is a renewed focus on new business, but most agencies have no system for sustained business development and few staff skilled in new business.  What was done 3 years ago no longer works. The troubled water is changing everything. You have probably been frustrated by first-hand experience with all of these changes; but opportunities for new business are abundant for advertising agencies that are prepared.

We believe there is no better time to do new business than times like these; when clients are changing how they spend, when your competition is worrying about staying in business, when companies are changing agencies at an unprecedented rate, and when prospects want to make decisions that enable them to solve immediate challenges. Doing new business now is like fishing in troubled water. Most people don’t even go out – but that’s also when the pros know fishing is best. While others stay home, the smart ones go fishing.

What steps should you take in times like these? Here are six strategies we recommend.

First, make sure your firm is properly branded. Check to see if you are caught up in alphabet soup with a brand that doesn’t say anything. Clients who are looking for a new agency don’t want a “we-are-whatever-you-need” advertising firm. In fact, that turns them off and harms trust. At a recent new business conference hosted by the AAAA, every client and search consultant said “stand for something.” You have to know who you are and why you should be considered. Otherwise, you risk fading into the fog of marketing services lingo. It is better to stand for something and not be considered for one account then to stand for nothing and not be considered for any accounts.

Second, focus on generating leads. That means increasing the number of opportunities to go visit good prospects. Too many agencies only focus on winning pitches, not working to get into more pitches. Beware of the “we’ll win the next pitch” red herring. This is where an agency is busy pitching but not focused on creating awareness and relationships. Unless you are a recognized agency brand (and there are only about 10 in the US), counting on referrals and word of mouth is not a new business program. Many agencies have attempted to flip a new business switch – “we need some new business NOW! Let’s form a committee!” Few are finding success.

Third, sell smarter. Focus on the overt benefits you offer. Make it clear what you do why and how it gets results. Successful agencies do this face-to-face, not by clicking PowerPoint slides at a prospect with lots of case histories and marketing babble. Stop doing capability presentations! Instead show them how you work, specifically with their brand, and how you will impact their business. This means that you have to work hard and listen to understand their problem. This sounds simple, yet it is one of the most common problems in all client/agency relationships.

Fourth, be easy to do business with. Don’t try to sell what clients don’t want to buy. Give your opinion, offer suggestions, but be sure to give them what they are asking for. If they want the logo larger, make it larger and move on. Forget about account planning and stop trying to get clients to pay for it. If you are in a tactical position, play the tactical game better and build trust. Only then can you move up the marketing ladder and start recommending more strategic advice.

Fifth, think about growing the old fashioned way – buy growth. A cross-town merger with another firm in your market can create a wealth of opportunities. There are some good opportunities in every market. You can gain efficiencies and add new services and resources, and create more awareness for your brand.

Finally, go after the consultants and the strategic high ground by offering consulting services of your own. This requires a separate brand that is not linked to advertising or marketing. Too many agencies forget that if you’re an agency, and try to add consulting to your brand, you are still only an advertising agency –Where are my ads! However, if you are a consulting firm, then you can work at the strategic “C” level, and open up a sizable new revenue stream. This provides more opportunities for the agency side to follow once the consulting assignment is completed.

Search consultants are saying new business is slow. They’re wrong. Their business is slow. New business is heating up. The competitive landscape for agencies has been forever changed. As the economy recovers and picks up speed, you will need to adapt to win today and change to succeed in the future.

As you evaluate opportunities and challenges at your agency, never hesitate to give us a call - 800.899.1538

Image Credit: http://www.1st-art-gallery.com/Andreas-Achenbach/A-Fishing-Boat-Caught-In-A-Squall-Off-A-Jetty.html 

5 Things I Hate About Latrine Duty, er... New Business!

Having started my career in the military, I’ve seen my share of crap. Don’t take me wrong, I loved my time serving! After all I spent 9 years traveling all over the world with some of the best and the brightest. That said, there are some aspects of serving that really grate one’s nerves – like having to clean out the latrines.

Working in new business is much the same. You get to work with some of the best and brightest, be highly creative, experience fun times, and relish the thrill of victory. But there are some aspects that remind me of cleaning latrines.  

Here are the highlights of the things I hate about new business:

1. Letting Chaos Drive the Process (The Guy Everyone in the Platoon Hates)

This is not unique to new business, and we have all interacted with someone who never responds to requests for input into a planning document or who fails to provide clear direction early in the process. This same person tends to show up for meetings 15 minutes late, pontificates endlessly rather than attempting to understand the situation or share critical information. And then assigns responsibilities and actions not related to the outcome. The end result is often that last-minute changes are made in the wee hours of the morning of the presentation. The counter-argument is “we need to be more spontaneous” or “you just need to be more flexible” or my personal favorite is “I work better off-the-cuff.” What a crock.

2. Using Overly Complex Marketing Jargon (Or Establish a SOP to SITREP Clearly)

Marketing buzz-speak is often deployed as a defense mechanism. Box a marketing person into a corner, whether he is a brand manager or the most junior account coordinator, and rather than admit they were wrong or have no idea what you’re talking about, they’ll start spouting off impressive-sounding marketing terms, abbreviations, and jargon-laced speeches – “We need to highlight the brand USP to maximize CTR by implementing a highly-integrated cross platform SMM to generate strong ROI.” I know some former military folks who can’t communicate with civilians due to the lack of acronym commonality. That’s why it’s important to communicate clearly. The most respected people in marketing I’ve worked with have an ability to articulate a complex situation or a difficult process or a hard-to-grasp marketing problem in simple, understandable terms. Not the other way around.

3. Not Developing Presenters (Providing More than Just a Toothbrush for Latrine Duty)

Marketing firms tend to promote people with good account skills or outstanding creative credentials, and then expect them to deliver powerful presentations. Often the very skills needed to be great in client service or creative makes them terrible at delivering presentations. Yes, I’ve heard all the excuses about how times are tight and there are no staff-development budgets, but you really cannot afford to ignore building great presenters in your firm. The best presenters are coached and groomed – they’re not just born that way. And if someone just doesn’t have that ability, then don’t bring them! Would you want someone covering your back who hasn’t had adequate training? Watching a well-crafted presentation delivered poorly just kills me.

4. Focusing on the Wrong Things (Should Leadership be THAT Concerned about the Cleanliness of the Latrines?)

When heading into a new business planning session or pitch there are certain areas where we should be spending most of our time. That means the overall goal, strategy, or plan. One disturbing trend I’ve noticed is agency leaders are focused on small stuff, like which word on which slide is better. Getting a handle on new business requires among other things, a particularly strong attention to detail. However, few leaders are able to coordinate the dozens, if not hundreds, of individual details associated with new business. Although keeping track of details is a valuable skill for leaders, I think it's easy for leaders to lose sight of the big picture. Regardless of how many small details need to be handled, it's important to step back every once in a while to see things from a broader perspective. That’s why in the military you have a commander who is in charge of the overall mission and subordinates to track and execute the details.

5. Letting Your Firm Get Lazy and Fat (Why Physical Training is a Way of Life in the Military)

The worst thing about new business is how so many firms let things slide until there is a crisis, and then everyone goes nuts. The day-in-day-out work eventually fills everyone’s time, and new business keeps getting pushed to the back burner. Weeks/months/years go by with little-to-no-effort being made in new business until one day a large client decides to head across town to a rival firm. Then all hell breaks lose as the agency goes nuts trying to find new business. Suddenly outbound phone calls get made. Old prospects get hounded. And new outreach programs are thrown together. Why? As I’ve stated many times, the most important client in the firm is the firm. Look over the past year, and decide if your own marketing efforts would be representive of your best you would do for any old client. Probably not. Working and exercising your new business skills day in and day out should become part of life at your firm. They don't call new business the heart beat of an agency for nothing. By continuing to ignore your weaknesses or problems they will never get resolved.

The Agency Offsite as Engine for Innovation

Most agencies annually convene a leadership meeting, strategic planning retreat, or brainstorming session dedicated to crafting an innovative course of business strategy. Rarely do these meetings deliver results.

Instead, they produce a pattern of incremental progress. And this does not translate into competitive advantage. Other factors affecting these meetings include planning, organization and leadership. Because responsibility for this meeting most often falls on the agency leader, the outcome is predictable.

The reasons for this are simple. Leaders "know" they know more than their team, so they develop a plan and agenda that determines the outcome - and everyone's frustration. Experience shows most meetings of this type fall into one of two patterns. At the "Rubber Stamp Offsite," the team nods along as their leader uses his agenda to present his assessment of the agency "As Is." He then dictates the action plan and assigns responsibilities. This approach is easily identified by the neatly organized three-ring binder entitled, "Agency Strategic Planning 20XX." Note - look for an accumulation of dust.

The other meeting type, the "March of the Hopeful, Guilty and Ambivalent," is the product of an insightful leader who - tired of the "Rubber Stamp Offsite" - assigns every member of the team roles and responsibilities. The outcome - well - you have been at these meetings, there is no outcome, just a reporting of the past year, justification of the results and explanation of the incremental changes that will be implemented to fix what's broken. Frustrated, the agency President usually sits down following this session; drafts an action plan and dictates responsibilities - see the results of the "Rubber Stamp Offsite."

If you want to break this cycle to create opportunities for innovation at your agency, then change your approach.

Don't go off the deep end and schedule team building exercises through Outward Bound, or book a provoking motivational speaker. These activities make great copy - but rarely, if ever deliver business-changing insights. A growing number of successful organizations are utilizing professional facilitators to assist in the planning and management of these important meetings.

By assigning responsibility for the business of the meeting to an experienced outside party, the group is better able to focus on the business of the business. The role of the facilitator is part emcee, part mediator, and part referee. But more than that, this person frames the discussion, manages interaction and creates opportunities for discovery.

Because innovation is not achieved in-the-box, an agency is better served living the process, not running the process. And agency leaders must understand that insight is achieved through their support, not as a result of their management. Utilizing a resource experienced in facilitation and knowledgeable in the industry changes the meeting dynamics. The agency, as a whole, becomes the focus, not the innumerable piece and parts.

If your agency's strategic planning process is not creating measurable results in growth, quality, productivity, or profitability year-over-year, then you might be a perfect candidate for this approach.

Photo Credit: thedailylondonphoto