For most ad agencies, successful proactive new business begins with identifying a group of likely clients
by Todd Knutson | published on April 10, 2009
To get started, first identity the size of your funnel. The next step is to build your prospect list - the types of companies and corporate marketers who are most likely to hire your ad agency.
The process typically starts with identifying the following criteria: industries, company size, geography, and titles. Answer these questions and you’ll be on your way:
- Industries: What industries do we currently serve? What knowledge do we have from them that we can leverage with related industries? Which industries?
- Company size: What size company is in our sweet-spot? Specify a revenue range.
- Geography: How far away do we want our clients to be, where we are confident we can work effectively with them?
- Titles: What are the titles of the influencers and decision-makers who hire us?
By answering these questions you’ll narrow your audience to prospective clients it makes sense to approach.
Once you have this information, you’ll need to subscribe to a reliable data resource for marketing decision makers.
Starting an agency any time is difficult; succeeding today is even more challenging. Tips for success from a venture capitalist
by Todd Knutson | published on March 27, 2009
I stumbled upon a post by Paul Graham, venture capitalist, titled "How Not to Die". It's the notes from a talk he gave at a dinner for the leaders of companies his firm had invested in. As someone who has been intimately involved in four start-ups, I find his comments right on the mark, and highly applicable to any agency or marketing services company trying to get started today, as well as any agency fighting for survival in the recession.
When we haven't heard from, or about, a startup for a couple months, that's a bad sign. If we send them an email asking what's up, and they don't reply, that's a really bad sign. So far that is a 100% accurate predictor of death.
Do you or your founders have an advisory board? Investors? Who do you report your progress to? One of the benefits of having your own company is being the boss; however, the biggest drawback is not having someone to report to. The act of reporting to someone is accountability, and accountability spurs the activities that drive results. If you don't have someone to report to and don't have investors, create an advisory board, join Vistage or some other group that will act in that role.
Another approach is to schedule regular lunches or dinners with business associates. Perhaps you have 3-4 people you know who will agree to each meet with you once a month for the next year. Report your progress to them as a group, or to create a faster pace, meet one-on-one on a specific day of the 1st, 2nd, etc. week of every month. Consider each meeting a board meeting and drive activity during the week to meet specific objectives of the meeting.
Paul also suggests staying in touch with other startups. Find others in your city or town and meet with them monthly. Business challenges are shared challenges, regardless of the industry. You will learn as much or more from someone outside your industry as you will from someone in it.
His last two points really hit home.
The underlying cause [of failure] is usually that they've become demoralized.
How many agencies are suffering from low morale as a result of the recession, overdue accounts receivable, or lack of new business? Whether you're in a start-up or mature agency the leader's role today is to lead their troops successfully through the challenges of the current environment.
Founders are more motivated by the fear of looking bad than by the hope of getting millions of dollars.
All you've got is your reputation. Put yourself out there and say to the world that you're going to be successful. Keep evolving your services until you land a few clients who are true believers. Provide superb customer service. Most importantly,
Don't give up.
Right-size your agency instead of eliminating your sales and marketing effort
by Todd Knutson | published on March 17, 2009
The day before yesterday a Midwest agency CEO called and told us that they cut all new business spending at their 40-person full-service agency. I cringed when I heard the story.
What would you say to your packaged goods client who called to tell you that they were firing your agency and eliminating their sales and marketing staff? Hopefully, it would be that they were ensuring their company's demise.
Is eliminating all spending on agency new business any different?
Here are 11 ways to NOT CUT new business spending and grow during the recession:
- Conservatively forecast your revenue from existing accounts for the next 6-12 months.
- Identify your fix expenses (leases, etc.), and then forecast how much you can reasonably cut them.
- Identify your variable expenses (payroll, contractors), including benefits costs.
- Determine the expense level you can afford to maintain at a profit margin that will allow you to make payroll.
- Determine the number of people you need by department to service your existing accounts.
- Rank your top-performing people by department, and note which of them has grown new business organically.
- Identify the new business people, tools and resources you need to guarantee new business growth with a solid ROI.
- Build your recession-proof business model, and note key milestones that must be met.
- Immediately cut the people and expenses in order to meet your targets.
- Establish the activities that will need to be done on a daily basis to reach your milestones and ensure organic and new business growth.
- Measure your progress weekly and adjust as necessary.
I completed just such a review yesterday with a company president. While cuts are painful and can be difficult to make, it is far better than the alternative.