By Category: New Business Metrics & Management
Be the guest
by Todd Knutson | published on November 16, 2011
You fly into a strange city. Your flight is delayed. It's raining. You manage to find a cab that takes you to the hotel in a car that's sorely in need of new shock absorbers. The hotel restaurant is closed and there's nothing open nearby. It's midnight, so that's no surprise. You're irritated and tired. What a great way to start your trip to visit a prospective ad agency whose work you really like. Strike one.
In the morning, you find that the "continental breakfast" is hard boiled eggs, over-ripe bananas, mealy apples, and tepid coffee. Cabs are nowhere to be found, but the front desk person manages to call one...it's 20 minutes late. Strike two.
You arrive at the agency, only to find that no one's at the front desk. The meeting is scheduled for 8:30 am. In fact, there aren't many people around at all. Is this the right day, you ask yourself? You walk around the office and find someone back in a corner, ear buds in place. They have no idea you're there until you touch them on the shoulder and scare them half to death. They have no idea what to do with you. Strike three.
Contrast that hands-off approach to this one, using the same storyline:
The agency has arranged for a car service to take you, comfortably, to your hotel.
Knowing the potential for a late arrival, they've provided you with a basket of food. There's a hand-written note inside welcoming you and saying how much everyone is looking forward to meeting you in the morning.
One of the agency principals picks you up for breakfast at 7:15 am. She's taking you to the best breakfast spot in town.
The front desk person is at his desk when you arrive, and has been on the lookout for you ever since he got a text saying that you were 5 minutes away.
Lots of employees are around when you arrive; there's a buzz of activity.
Before the meeting, as the principal told you would happen over breakfast, you're taken on a brief agency tour with a really fun, effervescent employee who makes you feel completely welcome. In fact, you start thinking to yourself, "This is a fun place to work - I'd like to work with these people." She makes a point to introduce you to the creative team, since that's the reason you're there in the first place.
Home run? Maybe not, but at least you're still in the game.
Followed up with a thank you note...priceless.
When new business success is right in front of you
by Todd Knutson | published on May 17, 2011
Back in 1989 Larry King had been doing Larry King Live for about four years. His contract was just about up, so he started looking around for another network. He found that by moving networks he could double his annual salary, from $800,000 to $1.5M.
He told his agent, Bob Woolf, to make it happen. Here's what happened, as described in a Bloomberg Business Week article.
Ted Turner called Larry at 6:30 am, while Larry was in L.A. Ted had Larry's agent, Bob, in the office with him.
"I hear you want to leave," Ted says to me. "Say it to my face." I hear Bob behind him saying, "That's unethical." But Ted says, "Screw the ethics. Tell me goodbye to my face."
That's when Larry recalled a conversation from the night before, when he was asked, "Are you unhappy, is that why you're leaving?" "If you take all that money, the moment you're unhappy you're going to say to yourself, 'Why the heck did I make the change?'"
Larry told Ted that he was going to stay, and it turned out to be the right decision. His show took off and he was soon making a lot more money. And he learned an important lesson: Sometimes you don't need to make a change to succeed. Sometimes success is right in front of you.
It's not uncommon for an employee to seek greener pastures somewhere else. Sometimes they find them, and sometimes they don't.
In ad agency new business, it's pretty common for good biz dev folks to regularly get calls from recruiters and agency presidents offering "a great opportunity." It may well be. But the question you need to ask yourself is, "Am I unhappy." If the answer is yes, the next question is, "What needs to change here for me to be happy?"
It's quite possible that you can change the situation at your current agency, so you don't have to take the risk of moving, on the hope that what you find at the other end will be better than what you left.
Size doesn't matter
by Todd Knutson | published on August 17, 2010
Some ad agency CEOs would rather not spend money on a new business prospecting database. So it's not surprising that the decision to do so (or not) often comes down to a choice: spend money on an external resource or use an internally-developed and maintained database.
Before making this decision, though, it's important to consider the health of your internal database. Why? Two reasons:
- You might be spending more money building and maintaining it than it would cost you to subscribe to a superior product; or,
- You might not be spending enough money on it.
In the first case, choosing an external resource may make good business sense. In the latter, if you aren't spending enough, you'll likely be giving your new business team a resource that's old and out-of-date. They'll have to spend their time cleaning it, rather than generating new business.
Here are some questions to ask and answer in order to evaluate your internal database:
- How many companies do you have in it? Are they the right companies, in the right industries for your agency?
- How many of the right contacts do you have at each one? What's the average number per company?
- What titles do you have? Are they the right titles for your agency? If not, which ones do you need?
- What contact information do you want to have at each one (e.g. email, direct dial, proper title, assistant name, etc.) How many of your contacts have that depth of information?
- When was the last time you sent an email to everyone in your database? What was the bounce rate? Was it greater than 5-10%?
- When was the last time each contact name was telephone-verified for accuracy? How many of the contacts were gone? Was a replacement contact found?
- How much do you pay (including salaries and benefits, IT costs, software licenses, etc.) to maintain your database?
- What other information do you like to have to assist you in your new business prospecting efforts?
- What services do you subscribe to in order to gain access to this additional information? How much do you pay for these services?
Finally, after you have all this information at your fingertips:
- What's the total annual cost of maintaining your internal database?
- How happy are you when you weigh the accuracy and depth of information of your internal database in relation to what it costs you to have it?
Lastly, be cautious if you hear the argument (internally) that, "We have a really large database that we've built up over many years; therefore, we should use it."
The size of a good prospecting database has no correlation to anything. It's all about having the right companies and the right contacts and contact information.
If you're like most agency principals, you'll be surprised at what you learn. If you have questions when you're pulling this information together, don't hesitate to get in touch.
Look before you leap, and measure carefully
by Todd Knutson | published on July 07, 2010
It's really tempting for an ad agency new business person to look at inexpensive data sources (call them "Jigsaw-like") and get enticed by their low-price business models.
We get asked about services like this all the time, so I thought it might be helpful to provide a framework to review them.
Of utmost importance: Accuracy. These services usually claim an accuracy rate of around 75%. Taking this number at face value, they're admitting that 25% of the data is wrong.
Now, the reality of measuring accuracy. Unless these services are actually cleaning their data themselves, they really have no idea how clean it is. The questions to ask yourself are, "Am I okay knowing that one out of every four contacts I get is inaccurate?" And, "Am I okay wasting 25% of my time?"
When you're purchasing data from a service that relies on users to keep it clean, be cautious about data accuracy claims.
Why does this matter? When you think of accuracy, think of this formula: accuracy = time savings. The more accurate your data provider's information, the faster you'll reach your intended decision-makers. The less accurate it is, the more time you'll spend researching, trying to find your intended prospect.
With this in mind, here are some Pros and Cons of "Jigsaw-like" services:
- Wide variety of contacts
- Exchange out-of-date contacts with another
- No long-term contract
- No industry focus - you'll sort through lots of companies and titles to find good prospects
- No research support
- Highly competitive - millions of people are going after the same people
- Value of your time - if you have a minimal amount of time to spend prospecting, how quickly you can get to decision-makers is critical
The best way to evaluate various data sources is to do some measurements. For example:
- Out of 100 contacts, how many are incorrect information? More than 10 incorrect data points and you're dealing with inaccurate information.
- How long does it take you to find the contact you're looking for? How does this compare to your current data provider?
- Once you have your desired contact, do you have the (correct) email, direct dial, address? If not (or it's incorrect), how long does it take you to get this information? Does your current information provider have it? Is it accurate?
- What's the value of your time? Calculate it as follows: (annual salary+bonus)x1.3 / 2080. This will show what it costs your agency to employ you, and takes into account taxes and benefits. If you apply this rate to the time it takes you to do what you've identified above, and extrapolate it annually, you'll have a true measurement of what your data really costs.
With this information in hand, you'll be able to decide whether a "Jigsaw-like" service is right for your agency.
It's tough to improve if you don't know how you're doing
by Todd Knutson | published on June 29, 2010
How do you measure the performance of your new business team? Is it just number of wins and revenue generated? If those numbers are good, do you know what they're doing well? If those numbers aren't good, do you know where they're falling short?
If you consistently measure the right things, you'll have all the information you need to hire, fire, train, and retain a high performance advertising agency new business person or team.
Measuring how you're doing is only effective if you're measuring against something. You first need to set an annual goal for each item. Then, break the goal down into monthly increments, and if appropriate, weekly and daily. With the goal, you can then measure your performance against your target. In addition, you want to measure yourself against how you did for the same period last year, and perhaps last quarter.
Social media: On your blog, measure followers against your goal. Review posts that get the most reads (and be sure to write more of them). Identify which ones don't get read and adjust accordingly. Track how many reads you get per day and per week against your goal. Identify steps to improve reads based on how they're trending (up or down). Measure traffic sources - where does your traffic come from - and track it against plan.
Events you host: How many guests do you expect to attend; how many show - that's the show rate, which you need to predict future attendance. How much did the event cost? What's the event's cost per attendee? How many new business meetings do you get from each event? What's the event's cost per new business meeting held? How many pieces of new business do you win as a result of an event? What's the cost per new account landed? Over time you'll have enough numbers to evaluate whether to continue hosting events or perhaps to increase the number of events, and it'll be based on a true ROI.
Events that you attend: What's your cost to attend? How many new business meetings do you secure from each one? What's the event's cost per meeting held? How many pieces of new business do you win as a result of each event? What's the cost per new business account landed? Over time you will have enough numbers to evaluate whether to continue attending certain events and perhaps if you should increase the number of events you attend. That decision will also be based on a true ROI.
Branding Email: If you use email as a branding vehicle - measure how many emails you send with each blast. What's the overall cost per blast, and per email? How many opens do you get? What's the cost per open? How many inquiries do you receive? What the total cost per inquiry? What new business do you win from emails? What's the email cost per new business account landed?
Branding/direct mail: If you use direct mail as a branding vehicle - measure how many pieces you send with each mailing, and the mailing's total cost. What's the cost per piece? How many inquiries do you receive (if any)? What's the cost per new business inquiry received? What new business do you win from direct mail? What's the direct mail cost per new account landed?
As you can see, if you measure all of your marketing activities, you'll soon have metrics on the marketing cost per new business inquiry, per new business meeting, and per new account win. This is incredibly valuable information for your future planning.
Networking / referral program: If you employ a networking and/or referral strategy, how many meetings or requests does it take for you to get one referral? How many new business meetings do you get for every 10 referrals? How many of these turn into new clients? You want to know these ratios so that you can determine how many referrals it takes to generate one new piece of business. Then, you can extrapolate and plan for the future.
Search consultants: If part of your new business strategy is to keep in touch with various search consultants, I encourage you to track your efforts and the ROI. How many consultants do you keep in touch with? How often do you do so? What does it cost (in terms of time, travel expense, mailings, etc.) to stay on their radar? How many RFPs do you get from them? How many do you respond to? How many do you win?
RFPs: How many RFPs do you receive (separate from search consultants)? From whom? Be sure to track the source of each RFP (i.e. how did they hear about your agency) so that you can better target your future marketing efforts. Track the cost (in terms of time, out-of-pocket expense, mailings, etc.) to submit an RFP. How many RFPs do you get from each source? How many do you respond to? How many do you win? What's the cost per submission? What's the cost per new account won?
Directories: Many agencies submit their creative work and other information to websites that cater to corporate marketers. You should measure these sources as well. Capture the cost of each directory, the number of times your profile is viewed by a corporate marketer, and the conversations, meetings held, and new client wins from each directory. Then, calculate the cost per profile viewed, per new business conversation or meeting held, per account won, etc. This way you'll be able to evaluate whether the particular directory you choose is providing you ROI. [Note: some of these sites may be considered "branding sites" - i.e. the cost is relatively minimal and you just need to be there. That may influence your decision to maintain a presence on the site.]
The most important metrics with outreach activities is the cost per win and the cost per source. You need to be able to answer the questions, "What does it cost us to land a new piece of business? And, "What are the least (and most) expensive sources of our new business wins?" One of the best ways to do this over time is to rank your sources by the number of accounts won from each.
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.
With the information discussed in this post, you'll have all the information you need to allocate your resources to the sources and activities that drive the most new business for your agency.
Build your plan
by Todd Knutson | published on June 24, 2010
Creating an advertising agency new business plan is a step-by-step process. With the outline of ingredients necessary to create a new business plan provided in this post, you'll be able to make the decisions necessary to put your plan together in a matter of days or weeks.
Important note: Many "new business initiatives" are unsuccessful because management isn't fully committed to the effort. To avoid this common result, I encourage you to read the prior post (Step 1) and then "take a time out". 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 this commitment, implementing the suggestions in this post will only guarantee mediocre success (at best) or failure (more likely).
Step 2: Build Your Plan
Before we begin, I'd like you to put yourself in the right mindset. Creating a new business plan is creating a marketing and sales plan for your agency. You know how to do this for your clients; now you need to do it for yourself. Perhaps rename your new business plan 'New Business, Inc.' - this might help you give it the client-oriented importance it deserves.
Who Are You; How Are You Different?
Every agency thinks they're unique, while clients think most agencies are alike. Everyone in your agency needs to know who you are, and how you're different. If you say, "We're a retail agency that delivers our big-box retail clients 15% annual year-over-year growth", you'll probably get a number of potential clients to meet with you pretty quickly. On the other hand if you say, "We're a full-service agency" and you only have 10 employees, there's going to be a disconnect.
What's your most effective approach?
Every agency needs to choose how they want to get noticed. What has worked best for you in the past, or how do you want to go about it in the future?
- Are you best when you do your own category research, and offer it as "bait" to a prospect?
- Are you most successful when you purchase research from 3rd parties and draw insights and conclusions from it?
- Or, are you best when you lead with your create work?
If you need help or are unsure about the most effective apporach, or the approach you're considering, you might ask an expert who works with agencies every day. People to consider include a friendly agency search consultant, consultants like Ignition Group, Robb High Consulting, Michael Gass, or Mirren Business Development, or one of the outsourcing companies like Linkergy or Catapult New Business.
Define Your Objectives
- How much new revenue do you want this year? Write it down.
- How much do you want to come from organic growth? From proactive new business? From passive new business (e.g. relationships with consultants, RFPs that "just show up")? Break down your revenue growth into these categories, and others if you have them.
- Now, turn your revenue growth numbers into a discreet number of wins by category. For example, how many clients do you need to land to hit your proactive new business number? Your revenue from review consultants or RFPs?
Turn Your Objectives Into Achievable Goals
Once you have your top-line numbers for each of your categories, determine how you're going to hit each of them.
- Proactive new business: using metrics from your recent past, create your sales funnel. This will show you how many prospects you need to target to have the meetings you need in order to win a new client. Extrapolate these numbers based on how many wins you want this year. These become your new business team's proactive sales goals, to which you will hold them accountable monthly, quarterly, and annually.
- Organic growth: using metrics from last year, determine the rate at which you win new business from current clients. Determine what you've done to achieve this growth. Ask yourself how you can do better this year. Assign revenue growth goals to each account team, communicate those goals to them, and incorporate them into their monthly, quarterly and annual goals, and hold them accountable to hit them.
- Passive new business: Your agency may have a "nurturing strategy" with various search consultants, or, "friends and family", among other groups that you keep in regular touch with. Set goals for each of these channels, communicate them to your new business team, and hold them accountable to hit them.
Note about accountability: we've all heard the expression, "What gets measured gets done". The great thing about this one is that it's true. If you don't know what you want to achieve, you won't achieve what you want. So, set goals ahead of time, and then make your team responsible to hit them.
Too many ad agency new business plans fail because the agency doesn't have a 100% dedicated, talented new business person who is regularly measured, and held accountable to the effort.
The challenge for many advertising agency CEOs is that dedication means the new business person can't work on client business, and won't be billable. I encourage you to look at this situation as you would one of your clients: do they have billable sales reps? Or, are those sales reps 100% dedicated to revenue generation? You know the answer to the question.
So, the decision you need to make is either:
- Will you appoint an internal person to be responsible for new business (if so, who?)?
- Will you hire someone from the outside?
- Or, will you outsource to a 3rd party expert, who will focus on proactive new business (only).
Whichever option you choose, your next step is to define the job description, how you're going to find them, and when you want them to start. Then, initiate the search. As an aside, if you're considering a recruiter, you might want to speak with Mirren Talent.
Target criteria and segmentation: Decide on the criteria you want to use to target prospective clients.
- Are there specific companies you plan to pursue?
- If not, what industries, company size (by revenue and/or media spend) are best for you?
- In what geographical area?
- What are the titles of the decision makers you're best talking to?
- Are there particular brands you want to work with?
- Or, are there particular brand demographics that are best - e.g. brands targeting seniors or Gen X?
Data: Once you know who you want to target, you need to choose a new business database that will provide what you need. Be sure that the one you choose provides everything you need. There are a range of services available at various price points, starting with "free" and going up from there.
One thing I regularly hear from clients is this: "You get what you pay for". So, think before you go for the lowest price.
Five or ten years ago, direct mail was useful as a branding vehicle. Today, it may take doing things a bit differently to get noticed. However you do it, think about what you can do yourself, as well the leverage you can get from others. For example, there are websites on which you can post your work, testimonials, clients (and much more), that will essentially market your agency to prospective clients at an affordable monthly cost (one example is Marketing Mine - full disclosure, this is a sister company to The List).
Many agencies also utilize their CEO's blog to get noticed. This is a very powerful form of social networking. For more information about creating an agency blog, call Michael Gass.
How do you want your agency to reach out to clients? For example, do you like the idea of someone making cold calls, or not? Decide, as a management team, what type of outreach you want to take place before you finalize the new business person's job description. Questions to consider include:
- Do you want them to make cold calls?
- Do they need to be an email expert?
- Will they network with search consultants?
- Will they interact with current clients to help drive organic growth?
- Do you want them to be a pitch specialist? (Are you willing to pay top dollar for this expertise?)
- Will they attend initial prospect meetings? If so, on their own or with someone else? Or, do you want them to stay focused on new business while others attend meetings?
- Or, do you plan to outsource your proactive outreach, and if so, what skills and responsibilities will be needed on the inside?
Once you define how you want your new business person or team to do outreach, you'll need to define the touch points they'll employ and goals you expect them to hit:
- If you use email, will you follow up with telephone calls? If so, what frequency do you expect? Do you want someone who sends a few targeted emails a day, or 50?
- If you're cold-calling, do you want someone to make 5 calls per day or 40? (Hint: not everyone who's comfortable making 5 a day will be able to consistently make 40.)
- What's your plan to use voicemail? Do you have a voicemail strategy?
- If networking is your preferred tactic, how do you plan to pursue it? How many connections do you expect per week, month and year?
- Or, perhaps you're best when you have a referral. How many referrals do you expect per week, month, year?
No matter your tactic(s), be sure that the person you appoint or hire is good at the approach you want them to use. If not, you'll experience a big disconnect and subsequent employee turnover.
Metrics and reporting
You also need to decide the following ahead of time:
- How are you going to measure the effectiveness of your efforts? What reports do you have to do so, or do you need to develop?
- Who's responsible to create them? Who's responsible to run them?
- Who will review them, and when? (I recommend at least monthly.)
As you think about metrics and reports, I encourage you to measure as many aspects of your new business performance as possible. Here are a few posts that may be of assistance: a simple call-tracking system; converting leads to opportunities; and, measuring your new business activity. There are quite a few others within this site. You might try using the search option on the home page. If you get stuck, don't hesitate to get in touch with me directly.
Filter Your Opportunities
What's your process going to be to review leads that you receive, as well as RFPs? Not every lead is a good one, and you probably don't want to pursue every RFP that comes in the door. Decide what you want to pursue ahead of time. Set the rules for your team so they know how you want them to respond when the moment arrives.
Here are three ways you might categorize opportunities:
- Core criteria: fits your pre-determined size, geography, category, discipline(s), etc.
- Strategic opportunity: Gives you the opportunity to move into a new category, geography, discipline, etc.
- Opportunistic: falls in your lap; represents something quick and easy to do; or, is a good source of cash.
When you've made your decisions about each of these new business plan ingredients, it's time to put your plan on paper. You now have a choice: do you want to create a document than sits on a shelf, or one that's a living, breathing guide to your agency's new business future? The former will probably become a binder and get distributed to key players throughout the agency, and end up on their bookshelf. The latter might be a one-page plan printed on colored paper that people bring with them to weekly new business meetings.
My favorite plan is the short version - overall objectives, specific numerical goals and tactics on one page. How you go about pursing outreach, marketing, job description(s), opportunity categories, etc. might become your "standard operating procedures". They should be written down, printed and distributed, but the team won't have to refer to them very often (once they understand them). Your metrics/reports will be a work in progress; as long as they're reviewed weekly or monthly, they'll become part of how you do business in no time at all.
A final thought...
The Little Things Really Matter
We sometimes forget the little things that make a big impact on a prospective client. Things like hand-written notes and welcome gifts. For best results, these should be thought-through ahead of time, included in your new business plan and made part of your agency culture. Little things like those noted in these posts, as well as the ideas you and your team come up with, are an easy way to differentiate your agency.
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.
Consultative selling at its best
by Todd Knutson | published on June 17, 2010
I was told a story a few month ago about a salesman and his son. They're not involved with ad agency new business, but their story and the lessons learned are 100% applicable to a successful hunter.
Howard Weisnberg is a master salesman of the old school - he believes sales is a numbers game. His approach is simple: make as many calls as possible while offering solutions in a consultative way to creatively get to the buyers' needs and budget. He often surprises his customers with packages and prices they never thought of. His deals range from a few hundred dollars to hundreds of thousands of dollars; on average he sells $50,000-$80,000 per month. His profit margin is the highest in the company's history.
Both of Howard's sons are gifted salesman. Last year his son, Adam, took a job selling B2B training courses that average about $1,500 each. At his company, all new hires are given "proving leads". Each of these leads has already been called 30-40 times by past new hires.
Adam closed three deals in his first week.
Okay, let's consider what's going on here:
- You have a talented father who passed on his skills to his son.
- You have a company that knows there is value in "old, dead leads" and recognizes that good sales people will find it.
- You have a son who is clearly able to find a buyer's need where others were not.
New Business lessons:
- Does your agency have a group of prospects that you consistently work over the long-term?
- Do you abandon efforts after the first rejection?
- Are you consistently working to improve your sales skills - to practice identifying needs and establishing value?
As Guy Kawasaki (former Apples exec and founder and managing director of Garage Technology Ventures) said in a NYT interview some months ago:
Success in business comes from a willingness to grind it out...
Response time is critical
by Todd Knutson | published on June 08, 2010
How would you react if you learned today that responding to a prospect within one minute of their inquiry could improve your ability to win new business by 391%? Similarly, if you help your clients improve their response time they could generate more revenue, and your agency could win more organic new business? Read on to learn more.
A leads management provider called Leads 360 recently published a fascinating study on the power of speed to influence new sales. In short, new business opportunities seized upon quickly convert at orders of magnitude better than those that languish - where "languish" means anything over about 24 hours.
- Leads called within one to two minutes of their being born convert 160% more often than the average.
- 88% of leads that close are those called within 24 hours.
But the real kicker is this:
When you call new leads in under 60 seconds, the study shows an astounding 391% improvement over average conversion rates.
Why do you suppose that speed is so important? Is this just another by-product of the Internet Age? Or, are most consumers impulse buyers who quickly lose interest? On the contrary, the study's authors suggest something even more radical. Leads contacted in the first 60 seconds may not close that day, week or month. However, the impression of that immediate contact is lasting and forms a "bond" that has real value.
That's a compelling insight that can positively impact your business.
Impact on New Business - Questions to Answer
- Does your agency have a website form that prospective clients fill out and submit? Who receives the form? How long does it take to respond to those forms with a phone call?
- What happens to incoming calls? Do they get answered by someone in all cases? Or, do some end up in a voicemail box? How long does it take to respond to those messages?
- Do you track your speed of response? Assuming you don't, how could you? Who can you put in charge of response time to ensure that speed prevails?
Impact on Organic Growth - Questions to Answer
- How do each of your clients (whether B2B or B2C) respond to incoming leads? Have you mapped - and timed - the process from web-form submission to customer service/sales rep (assuming they don't have an online direct-purchase option or call center model)?
- What changes can you recommend to increase response times?
- What metrics can you put in place to measure the impact of improved response time on new revenue?
- How will you communicate the benefit of improvements in response time and revenue growth to position your agency to work on more of their business?
This is such a simple concept, but one that isn't necessarily easy to implement. It will be impacted by your CRM software, perhaps your phone system, your existing work processes, and ultimately your culture.
Regardless, with the prospect of closing four times as many new leads as we do now, I promise you that this is something we're going to be working on starting today. How about you?
"Live Pitch" provides insights
by Todd Knutson | published on May 07, 2010
For those who attended the 2010 New Business Conference, the annual "Live Pitch Competition" provides an opportunity to participate in or watch a random group of agency new business people prepare and pitch a new product to an imaginary client - start-to-finish in four hours. That is, present to a group of search consultants...live...in front of 400 of your peers.
I'd guess that as the participants are preparing, a few wonder if they're going to come out on top, or end up feeling like a pig on its way to the slaughterhouse. The good news is that everyone survives and learns from the experience.
This year, Lorraine Lockhart of Rojek Consulting Group, summarized the session with six "lessons learned" that will be useful to review before any upcoming pitch. Here they are:
Build the Case. Make it well-structured so you don't lose your big idea. Everything must build on what came before.
Be Client-Centric. It must be all about the client. Formulate your pitch this way: 10-80-10, where you spend 10% of your time on introductions; 80% delivering on the brief and presenting your case in a way that's all about the client; and finally, 10% wrapping the presentation and closing the sale.
Money Matters. Be prepared to talk about it; choose your money-spokesperson ahead of time. If you're not prepared or comfortable talking about money, plan ahead of time how you're going to address the question.
PowerPoint as a Visual Aid. It should only be used as a prompt to create dialog.
Be Careful if you Challenge the Brief. It can be okay to challenge the brief, but if you do so, do it respectfully. Use data to back up your position. Challenge positively, showing how you can improve the client's opportunity. Definitely don't come across as attacking the client.
Speak with Conviction. Poor presentation skills distract from your content. Let the joy of what you do come through.
This is great advice for any presentation. Well said, Lorraine!