By Category: New Business for CEOs
Are you committed?
by Todd Knutson | published on June 22, 2010
It may be the result of losing a client, reading a book, article or blog, attending a conference or meeting, or perhaps just having a conversation with someone: every so often an ad agency CEO will say to him or herself, "We've got to do a better job of going after new business."
What comes next varies from agency to agency, but generally there's a flurry of activity, followed by (hopefully) a new business win, and then everything settles back to "normal", as in, no consistent new business effort.
Can you break the cycle and develop a consistent approach to new business?
Sure, but it may be easier said than done.
In this two-part post I'll help you create your annual new business plan. It's broken into two parts for a very important reason: Many "new business initiatives" are unsuccessful because management is not fully committed to the effort.
To avoid this common result, I encourage you to "take a time out" after reading this post. Think about what it says. Discuss it with your management team. Together, determine if you have the collective will to change your agency's new business culture. Without it, going on to Step 2 will only guarantee mediocre success (at best) or failure (more likely).
Step 1: Commitment
An annual new business plan is more than creating a PowerPoint deck, producing a brochure, and assigning a junior account executive responsibility for new business (or perhaps creating a new business committee).
To really move forward and create a sustainable and successful new business effort, you - the CEO - need to affirmatively answer these four groups of questions:
- Are you willing to change the agency to one that's prepared to proactively pursue new business over the long-term? Is your management team fully committed to this effort? If not, why not? How are you going to motivate them to change?
- Are you fully prepared to treat 'New Business, Inc.' as a client? To invest the non-billable resources necessary to ensure that they remain a client for, say, 10 years?
- Are you prepared to create annual plans with objective, measurable, transparent goals? Are you prepared to promote, hire, or outsource 100%-dedicated new business people to the team? Are you prepared to hold them accountable for results on a monthly, quarterly and annual basis?
- Do the internal changes you'll need to make to ensure the success of New Business, Inc. mean that you need to make other changes to the agency? What are they? Are you prepared to make them, too?
With four 'Yes' answers you're ready to move on to Step 2 (the topic of my next post). If not, I encourage you to either keep doing what you're doing, or make the internal changes necessary to answer these questions affirmatively.
Case Study: Cinquino & Co.
by Todd Knutson | published on May 05, 2010
Was your agency able to win new business from 71% of your first meetings in 2008? How about 60% in 2009? That's what one small agency in New Jersey accomplished after being on the brink of closing its doors in 2007.
Crisis often creates opportunity, which is what happened for John Cinquino. His agency won zero accounts after 34 first meetings in 2006-07. As he and his team faced the possibility of losing their agency, they decided to things differently.
They made a pact to put the quality of first meetings before quantity. And they vowed to learn how to win.
Here's what they learned:
- Start with a hard target list that's focused on specific categories.
- Develop key case studies for each category.
- Hire a strong new business hunter.
- Your new business hunter is responsible to prospect and set up first meetings.
- Your new business hunter also preps the prospect for a "10-minute qualification call"with one of the ad agency's principals, who will be the only person at the first meeting.
- The agency principal uses the qualification call to identify the prospect's pain points and needs. When it goes well, this call may last 20-30 minutes (and the prospect will NOT be looking to get off the phone).This call:
- Establishes rapport between principal and prospect.
- Helps the principal understand, "What hurts?"
- Provides specific areas for the agency to research to prep for the first meeting.
John's recommended questions to ask the prospect:
- What did you do in the last year that didn't work?
- What issues are you having with your competition?
- What issues are you having with your brand?
The key is that you identify their pain points quickly, and then move on to the next question. You want to get just enough information to be able to connect the dots. This will enable you to do your research on the prospect's competitors, distributors, and the brand itself prior to the first meeting.
- Conduct meaningful research based on what the agency principal learned on the qualification call. Keep top-of-mind that every prospect wants to know more about:
- Their customers
- Their competitors
- The agency principal goes to the meeting prepared to take charge. Share your research and talk about the prospect's business. Try not to let them ask about you; when they do, answer briefly and then move on to something else you learned, or ask them another question.
- The agency principal leaves the meeting with very clear next steps. By now you should have a very good idea what the prospect needs. Before you leave the meeting, agree on a date for you to return to present a proposal to solve one or more of their issues three (3) weeks later.
With this approach, Cinquino & Co. closed 71% of their first meetings in 2008 and 60% in 2009. They now have three new business hunters instead of just one...out of a total staff of eighteen people.
John has proven that these nine steps work and is now in rapid-growth mode - and did so right through the recession.
In the words of Rishad Tobaccowala
by Todd Knutson | published on March 03, 2010
Marketing is understanding and meeting customer requirements. In order to survive, companies must meet their requirements; technology is going to allow agencies to understand customers' requirements; and, new marketing tools will allow us to meet them. So argued the cerebral Rishad Tobaccowala, CEO of Denuo Group, at the 4As conference in San Francisco.
Here are his thoughts on how ad agencies can thrive in the next ten years:
To meet customer requirements, ad agencies must first overcome three challenges - internally and then ultimately with your clients:
1. The future does not fit in the containers of the past.
In other words, you have to think differently. Consider...
- Digital linkages are changing the way we do everything, and will continue to do so.
- Your people are analog - they operate based on feelings. The biggest driver - your incentive plan.
Show me your incentives and I will show you what will happen.
- Lack of speed kills. The biggest impediment to speed is your organizational structure. Push decision-making down to the lowest levels possible in the organization (see # 2).
2. Talent Scales.
- Top companies are fixated on talent, passionate about talent. All companies have to be that way if they are going to thrive.
- To create a renaissance in marketing and advertising, we need to hire builders - talented younger people who want to create something.
- Incentive systems typically incent seniority; don't forget to incent your builders or they will build elsewhere.
- Builders will embrace accountability - if it aligns with what they want to do.
- Builders want skin in the game - a purpose for being there.
Understanding and meeting customer requirements = purpose.
3. "Us" the leaders.
Your people are curious about where you're going to take them. Do you know? Do they know?
- Audacity and dreams make a difference. They attract builders.
- If you want to know your culture, talk to the people at the bottom of the organizational chart; they may tell you if they trust you.
As CEOs, getting it right inside your agency will position you to meet the ever-changing needs of your clients.
The glue in the marketing organization
by Todd Knutson | published on February 24, 2010
The marketing organization inside many of your larger prospects or clients is becoming increasingly fractured and siloed, creating a big opportunity for agencies to exercise leadership and vocally represent the voice of the customer. So argued Larry Light, President and CEO of Arcature yesterday at the 4As Transformations 2010 conference in San Francisco.
Larry is a management consultant credited with helping to turn around McDonalds and Nissan.
He made the case that in a big client's marketing organization, you might find a CMO and various chiefs of insight, analytics, merchandising, strategy, branding, and maybe more. Each has turf they're trying to protect and grow, and each is firmly entrenched in their own silo. From his experience, Larry has found that silos only serve to decrease accountability and increase the ability to blame others when there's a problem.
What's the opportunity for ad agencies, and new business people in particular? Become the voice of the customer. In many of the companies he's worked with, Larry said that no one truly represents the customer. That's a leadership role agencies are perfectly suited to assume.
Agencies shouldn't just be coordinators of marketing communication - not when the real prize is to be the glue that holds the client's marketing organization together.
Assuming the mantle of "the voice of the customer" would put your agency in the role of saying to your client,
"What kind of exciting future can we create for your business?"
Here are two important ways that Larry says you can do this:
- Come up with a real insight. Before you state that it's an insight, though, you'd better be surprised by what you learned. If your insight is that "people like food that tastes great", keep digging.
- As a result of your insight, how will behaviors change? If the insight doesn't cause you and your client to change the way you do things, then you only created an "interesting insight". You need a business-changing insight.
There are clear opportunities here for new business pros to use insights to crack open prospects' doors. Likewise, for agency management to think about the roles you play in your clients' organizations, and how you can better represent the voice of the customer to assume a greater leadership role.
Thought-provoking stuff; hope it generates an idea or two.
Objectives and Key Results
by Todd Knutson | published on February 02, 2010
Two days ago I was introduced to a management technique that's widely used at Intel and Google, about which I was previously unaware. The idea is to get everyone in the company focused on the three most important priorities that matter most, and no more.
Managers who use this technique call it O.K.Rs, which is short for Objectives and Key Results. An interview in Sunday's New York Times with Mark Pincus, CEO of Zynga, a provider of online social games, describes it this way:
...the idea is that the whole company and every group has one objective and three measurable key results...it's a simple principle that keeps everyone focused....
Pincus credits John Doerr, the well-known venture capitalist, with the idea; he's pictured above.
Here's how Pincus puts it into action:
On Sunday night or Monday morning, everyone writes down their three (3) priorities for the week.
On Friday, we see how they did against them.
He's found that:
...this is the only way people can stay focused and not burn out.
This simple management technique should be very effective for any ad agency that has had to cut staff due to the recession. While a smaller group may not get as much done as a larger group, the key question to ask yourself is, "Are we getting the right things done right now?" This approach will keep everyone focused on the getting the most important things done - this week.
It should be especially effective for new business people. For example, staying focused on nurturing a long-term prospect, completing the RFP that's due on Thursday, or making twenty calls every day this week.
It's easy to get caught up in all the little things that need to be done, putting aside for a while the big things that matter most. The little things do need to get done; however, it's getting the big things done that has the most impact on individual performance, and the agency as a whole.
How hard are you willing to work, and for how long?
by Todd Knutson | published on January 22, 2010
Most ad agency new business people are competitive, and want to be the very best they can be. What separates the average from the great? The experts from the "wannabes"? I was struck by a section of Outliers, by Malcolm Gladwell, that provides a very simple answer.
Gladwell relates a study by psychologist K. Anders Ericsson and two colleagues at Berlin's Academy of Music. In the study, the school's violinists were divided into three groups: those who were stars; those who were good; and, those who were unlikely to ever play professionally.They were all asked the same question:
Over the course of your entire career...how many hours have you practiced?
What the researchers found is that everyone started off playing at about the same age - five or six years old. They all practiced about the same amount: two to three hours a week. But after about three years of study, those who ended up being best in their class started to increase the amount of practice time: "six hours a week by age nine, eight hours a week by age twelve, sixteen hours a week by age fourteen, and up and up until by the age of twenty, they were practicing - that is, purposely and single-mindedly playing their instruments with the intent to get better - well over thirty hours a week."
In fact, by the age of twenty, the elite performers had each totaled ten thousand hours hours of practice.
Gladwell goes on to say that the researchers couldn't find any "naturals" who were able to perform at a high level with little effort. What they found, instead, was that:
...the thing that distinguishes one performer from another is hard work. That's it. And what's more, the people at the very top don't work just harder or even much harder than everyone else. They work much, much harder.
He then reports that study after study has confirmed that 10,000 hours of practice is the qualifying line for world class talent - whether in music, sports, chess, or even to be a master criminal.
So, what does 10,000 hours of practice represent to a new business person? Let's say you work 40 hours a week and work forty-nine weeks a year. Ten thousand hours is equivalent to:
- More than 5 years of dedicated, focused effort at improving your skills - assuming you work at it full time.
- More than 10 years of dedicated effort if you work at it half-time.
- And, if you're like many agency principals who dabble at it for five hours a week: it will take you 41 years to master new business.
This should be sobering. If your agency doesn't have a full-time new business person, and a team of people who practice really hard at their craft, can you ever (realistically) hope to be really, really good at new business?
Or, if you're younger or relatively new to the new business game, are your expectations realistically set? Are you willing to work really hard, full-time, for at least five years before claiming to be good at new business?
These findings resonate with me - as a still-competitive athlete and a business person with enough years in the seat to recognize that knowledge really does comes from practice and experience.
It takes a lot of hard work, making mistakes and overcoming them - over many years - to be good at something. You've got to be in it for the long term, with a desire - and a serious commitment - to be the best you can be.
Making sure you and your new business director are on the same page
by Todd Knutson | published on January 19, 2010
Every now and then you learn a management technique that's so easy and powerful that you can't believe you didn't know about it before. I learned one of these tactics recently from an executive coach who helps develop executive teams, and thought it would be worth passing along.
The technique is this: After you meet with one of your direct reports, ask them to send you a confirmation email summarizing what they heard.
As you can see, this is far from rocket science. However, think about what it does:
- Ensures that you and your new business director, or any other direct report for that matter, are on the same page.
- You immediately know if they heard what you said; and, if you implied things but didn't come right out and say them, did they "read between the lines"?
- You receive a written summary of what will be done, by when.
Making a request like this after routine communication meetings may be overkill. I find that the time to use it is when you've just covered a lot of important details, or if there's a problem that you need to get resolved.
Too often, we assume that what we've said was 100% understood. However, the truth is that the percentage may be considerably less. A fellow CEO reported to me that one of his employees repeatedly understood less than 50% of what was communicated during one-on-one meetings. This technique saved that employee's job, helping him to take better notes and effectively prioritize his work.
So, as you're working on your ad agency's new business plan this year, you might try this technique, and then be sure to let me know how it goes.
The good news is that everything is measurable
by Todd Knutson | published on December 15, 2009
A reader recently wrote me, saying that he's a new ad agency CEO, but has never managed a new business department. What objectives should I set, he asked? What should I measure? As many agency principals are thinking about next year, now's a good time to make plans for a successful new business process.
In our reader's small agency, the biz dev department consists of one full-time person, which is pretty common. Let's look at the numbers he'll need to build a new business funnel:
- How many clients do you want or need to win in the next 24 months?
- What percent of your initial client meetings result in a win?
- What percent of prospects you target do you meet with?
Let’s assume that your numbers are the following:
- 2 new clients needed.
- 10% of initial meetings result in a win.
- 10% of the prospects we target meet with us.
You can create a sales funnel to illustrate what you need to do:
- 2 new clients / 10% win rate = 20 initial meetings needed
- 20 initial meetings / 10% of targets = 200 prospects needed
Your next step is to identify the resource you'll use to identify your potential prospects. Rather than repeat a prior post that addresses this, click here to read more. The one thing I'll emphasize, though, is to be sure you pick a resource that will allow you to make calls without having to do further research, not one that requires you to wait while they try to find what you're looking for.
At the same time that you're selecting your business development database resource, determine the activities that your new business person needs to do in order to secure 20 meetings. Using a CRM system, I recommend that you track all the outbound activities between your new business person and potential clients, which are typically the following:
- Emails Sent
- Emails Received
- Quick Chat (example, "I'm sorry I've caught you at a bad time, I'll call you tomorrow.")
- Good Conversations (this is a substantive conversation that moves the prospect down the sales funnel)
- VM (left voicemail message)
- DNLVM (did not leave voicemail)
- Received VM (received a voicemail from a prospect)
- Meeting Set (set up a meeting with a potential prospect)
- Meeting Held (meeting was held with a potential prospect)
- Business Won
With these activity measurements, you can create metrics that will allow you to determine what's working and what's not. Here are those I find to be the most valuable:
- Total outbound activities = emails sent + quick chat + conversations + VM + DNLVM. You should use this daily, weekly, monthly, etc. to measure and ensure that activity is taking place.
- Activities per day = total outbound activities for the month / # work days in the month (or week, quarter, etc.). How much is enough? Someone in new business who's charged with outbound prospecting to a significant number of potential clients should make at least 30 outbound calls per day.
- Calls : Conversations = total activities / total conversations. This is a measure of how many total activities it takes to have a good conversation with a prospect. These days, having one substantive conversation out of every five or six calls is good.
- Meetings per Conversation: Total meetings set / total conversations. This tells you how many conversations it takes to secure an initial meeting. The lower the number the better your new business person is able to establish rapport, ask relevant questions, and establish a reason to meet. I think you should aim for a 1:2 ratio, or one meeting from every two good conversations. If you find that the ratio is higher, I recommend doing role practice to improve your new business person's skills.
- Meetings Held % = meetings held / meetings set. This is a measure of the quality of the meetings that are set. Over time, you should aim for nearly 100%, as this will mean that your new business person is doing an excellent job of identifying a need and establishing your agency's relevance to satisfy it. If meetings regularly don't take place, then they weren't quality meetings in the first place.
- Business Won% from meetings held = business won / meetings held. This will tell you how well you convert initial meetings generated from proactive outreach. Recall that in the above funnel, we used 10%. You should be able to do better. However, a note of caution: I can't tell you how many agency CEOs have told me over the years, "Put me in front of a prospect and I'll close the business." The exact same number have been terrible at moving an initial meeting along the process to actually winning. The objective of a first meeting is...a second meeting. Don't try to win on the first meeting. For more on this, read here.
These steps should help you measure and manage your business development process. Please let me know if you have questions or comments.
Introducing Leap Media
by Todd Knutson | published on November 19, 2009
Small and mid-size advertising agencies can now offer their clients Digital TV services. A low-cost, turn-key solution, which you can offer as your own, is available to drive new business.
Leap Media Group, founded by TV industry veterans, was created expressly for "smaller, and mid-size agencies looking to develop an interactive TV capability", reported Joe Mandese in MediaDailyNews at the end of September.
Mandese describes digital TV advertising as, "any ad unit on TV beyond the traditional commercial spot. Some examples include interactive TV spots, video on demand messaging, and program guide ads." (Full disclosure: Leap became a client of The List after the article was published, but we have no stake in their business.)
Says Leap co-founder Chris Pizzurro:
"Wouldn't you just love to have something on the TV set where the consumer can just press a button and enter your sweepstakes or make a request for more information?"
Leap offers agencies free planning, buying and executing interactive TV campaigns. Leap generates fees "directly from acquiring advertising inventory from cable and satellite operators and from other interactive TV platform providers", so agencies don't have to bear the cost.
When I read the article in MediaDailyNews, I immediately thought of ways that agencies can offer this service to help generate new business. First, you'll need to work out a deal with Leap so you can "white label" their service, i.e. brand it as your own. Next, your new business and account services staff will need to bone-up on digital TV: educate yourselves about what's going on, what the future holds, and what's in it for your clients.
Once you have the service in-house and fully understand it, here are three ways that offering a Digital TV capability may help you drive new business:
- Include digital TV in prospect conversations. If you've done your homework (as described above) and fully understand what's in it for your prospect, ask them smart questions to reveal their potential interest in digital TV, and then match their need with your new capability.
- Enhance your next pitch. Digital TV may provide some powerful benefits to those you're pitching, and this capability has the potential to differentiate you from the competition.
- Generate organic growth. As a small to mid-size shop, many of your clients won't expect you to have this capability. This could be a new service to enhance an existing relationship, or perhaps even help you retain one that's looking for new ideas. For flat-fee clients, this represents a way to charge for an additional service.
Additional insight: Chris Pizzurro provided me some additional information about how consumers and digital TV are evolving: Video On Demand (VOD) and Digital Video Recorders (DVRs) are expected to penetrate 50% of U.S. households by 2011. Consumers with digital TVs now know that their TV remote can do more than just change the channel. For example, consumers use their program guides many times a night, and banner ads are appearing on the guides. Same for VOD, where consumer usage numbers are growing year-over-year. Consumers are exposed to :30 second ads, but fewer than on traditional TV, so many prefer it.
I hope some of you see this as an opportunity. If you pursue it, I'd love to hear how it goes.
Good chemistry means learning how to have difficult conversations to maintain harmony
by Todd Knutson | published on November 04, 2009
You've seen it happen: two members of your team aren't getting along. You've tried to repair the damage, but everyone knows it's there. While everyone tries to cover it up in the pitch, it still shows. You don't win (instead, you come in "second"). The VP Marketing cites "chemistry" as what made them choose your competitor.
Hopefully, you hear "chemistry" as the reason why you lost.
Discord in a marketing services company is felt by everyone around those who are out of sorts. It's therefore critical that we all know how to skillfully and effectively diffuse and repair relationships.
As I was faced with one of these situations recently, I gravitated to a Harvard Business Publishing article by Peter Bregman called "The Martial Art of Difficult Conversations". Peter emphasizes the importance of really listening to those who are upset until you completely understand the issue.
He suggests Three Things to Do to Communicate Listening:
- Ask questions. Ask open ended, exploratory questions, such as who, what, when, where, how, why, etc. These will clarify what the other person is saying and feeling. Stay away from leading questions and statements that pretended to be questions but won't fool anyone, like "You don't actually believe that, do you?"
- Actually listen. Shut up and hear what the other person has to say. Avoid thinking about anything except what the other person is saying. Try to hear what they're NOT saying, but are implying: the desires, fears, and assumptions behind what they're saying.
- Repeat and summarize. Recap what you heard, trying to use the same words they did, and check to be sure you understood them correctly. If you didn't get it, ask the other person to repeat what they said so you hear the whole thing again. What you really want to know is what you got wrong. Ask what you missed. Once they've told you, repeat that part again and ask them if you got it right this time.
This sounds easy, and like most things it's harder to do than it is to write or say. But it works, so it's worth the effort. If you try this approach, I think you'll find that you develop the habit of asking questions instead of jumping in and suggesting what should be done to fix the problem.
We all want to be heard. Once we know that we've been heard and understood, we're generally much more willing to compromise and find a solution that works for everyone involved.
For new business teams, getting back to a stable state of affairs is critical, since chemistry is a critical ingredient to winning new accounts.