New Business Intel

» The Agency New Business “Busy Paradox”

"Busy-ness" abounds in good times and bad...

Not long ago I had to let someone go who was always the first to arrive and last to leave. She willingly put in time on the weekends without complaint. And when she was at work, she worked; it wasn't like she was playing video games or surfing the web.

The problem was, the important stuff wasn't getting done, or wasn't getting done nearly fast enough.

That's the paradox: very busy, unproductive people.

When it comes to new business, you may have seen evidence of "busy-ness" in action:

• The New Business Committee
• Doing lots of research before picking up the phone
• Re-doing the agency's marketing collateral, website, email templates, etc., etc. before 'being able to start' proactive new business efforts

I liken these activities to being back in college, feeling that I needed to clean my dorm room before starting to write a 25-page paper. For whatever reason, I thought I was doing something important, when all I was really doing was procrastinating.

In results-driven agencies, however, the only important thing is your productivity - the value you add in as little time as possible. Three great questions to periodically ask yourself are,

1. Is what I'm doing right now adding immediate value to the agency?
2. To our clients (or prospects)?
3. To my reputation/career?

I'd love to get your input on this: Are busy, unproductive people more common

• Among Gen X or Gen Y?
• Limited to certain departments? 
• Why do you feel this occurs in certain people?
• How do you prevent it?

I hope you'll post a comment or send me an email, as it's really no fun letting a great person go.

» Agency New Business Killer or Promoter: Your Director of First Impressions

You are judged on first impressions

A recent survey reveals that only one in three agency receptionists meet the characteristics of a Director of First Impressions. Staffed well and you'll have another new business weapon in your arsenal.

Prospects start evaluating your agency on their first interaction, which is often the person who answers your phone.

Done well, in the eyes of your prospect or client, your agency may gain a competitive advantage over anyone else they're talking to. Done poorly, and well...they may dread the idea of calling, and won't.

Personally, I've been struck by the rudeness of receptionists at certain agencies. To get a better feel for how widespread the problem is, I asked eleven of our sales and new business people to give an overall grade to the receptionists they speak with at agencies all over North America. Now, these eleven speak with about 35 agencies a day, so that's about 385 per day, 5 days a week, 50 weeks a year. That's a lot of agencies, so while not scientifically based, it's a decent sample.

In answer to the question:

What percent of agency receptionists fulfill the role of a good Director of First Impressions? Only 34%.

There were some highs and lows (e.g. New York agencies: 5%), but even accounting for them the average was the same. This is not good news for ad agency new business.

What to do to fix the problem?

Below are some suggestions. I'd like to thank Jann Driscoll from Catapult New Business who significantly contributed to the list. She used to work at Cox Communications and for a time was in charge of training people in this critical role.

1. Evaluate how you're doing. Call in from a phone your receptionist won't recognize, or ask a friend to do it for you. Evaluate how they handle the call.
2. Think about the skills you want in the role. A director of first impressions needs to have a passion for the agency and also be able to do a tough job - be the gatekeeper, research director, operator, friend, and of course the first impression anyone has with your brand.
3. Teach them your brand. No one off the street can possibly step in on day one and understand the history of your agency, its culture, positioning, etc.
4. Set expectations. They need to know that their job is making a superior first impression with every human interaction….never just passing someone off, always exuding empathy, courtesy, and confidence, and always demonstrating that they are a true resource for the person on the other end of the phone.
5. Train them in customer service. This means both internal and external customer service. How you want them to treat employees is as important as how they're to treat prospects and clients.
6. Broadcast their title. Put it on their business card, on their employee file, on your website. Let them know that their role is critical to your future business success.

The challenge for most agencies is that the "front desk" job is often taken for granted, and perhaps even considered a necessary evil. If senior management makes sure that your Director of First Impressions is welcomed into the business, treated well, and provided ongoing coaching and encouragement, you'll have created another member of your new business team.

So, you must be asking yourself, "Who does it well?" Well, here's one agency that does: Brains on Fire. if you want to hear what a great Director of First Impressions sounds like, give them a call. If you want to see what one looks like, click here!

» 10 Things MBA Schools Won’t Teach You About Managing Your Agency

Input from entrepreneurs on management, marketing and sales

If your ad agency is new or entrepreneurial, you're in a start-up marketing services company, or you're a CEO, you'll relate to this list of 10 things MBA schools won't teach you and the follow-on comments from street-smart entrepreneurs.

This list was culled from two posts on Dharmesh Shah's OnStartups.com, plus reader comments. I've picked the ten I liked most, that I thought were applicable to anyone thinking about new business or managing your agency. 

From the original post, "10 Things MBA Schools Won’t Teach You":

• There are an infinite number of ways to spend money on marketing.  You have no idea what’s actually going to work.  The idea is to experiment broadly and learn lessons cheaply.  On a related note, no amount of MBA marketing classes will prepare you for the day that you have to produce leads in order to close sales.  As it turns out, marketing is about more than product feature matrices and the right shade of blue for your logo.

• No amount of strategic planning will ever substitute for managing your cash flow.  Financial statements are great.  The most important one is your bank account statement.

• There’s a lot of value to being likable.  Good things happen when people like you.  When people like you, bad things have less of a chance of being fatal.  I advise being likable. 

And from the follow-up post, "37 Pithy Insights from Street-Smart Entrepreneurs":

• Infect employees with pride of ownership. If the employees feel like they are part of something bigger than themselves, then they'll work that way.

• Ritualize the work atmosphere -- every time a contract comes in, ring a bell or gong and let everyone celebrate. There's a reason Survivor has rituals.

• Leave your ego at the door and hire people without big egos that can understand how to look at a problem and be open to solutions no matter where they come from.  Keep those people.

• How are you continuing to invest in your customers and their experience after they have purchased your product? Value relates to the entire customer experience

• Ultimately, the CEO's position is to simultaneously lead and serve others.

• It is important that you like your customers. If you do not like your customers you will by design not do the best you can for them because they annoy you.

• A big lesson for me was SALES. There's very little coursework in MBA curricula around how Sales works... Can be a rude awakening for freshly-minted MBAs who know all about Porter's Forces, and nothing about how the Sales mind, the Sales organization, and Sales processes work.

What are some of the lessons you've learned?

» Ad Agency CEO Skill: The Right Way to Manage Your Business

Think discipline.

Too often, creatively-driven firms forget the business discipline that's required to achieve financial success.

A consultant recently reminded me of this. He's the product of the financial and management discipline learned at Fortune 500 companies, and now helps smaller companies, including a few ad agencies, implement management systems designed to increase accountability and profitability. He said that with a bit more discipline, many agencies could significantly increase profitability - even in a recession.

And then on a recent flight, I noticed the following quote from Jamie Dimon, CEO of J.P. Morgan, in Fortune magazine:

Our management team, 15 to 30 people, talk every day at 7:30, 12 Noon, and five o'clock - what's going on, sharing information, making some decisions on the spot, reviewing facts and information. I'm always surprised at companies that don't have discipline - they don't have business reviews, they aren't looking at their competitors.

If you know what you should be doing, but just aren't doing it, take heart: you're not alone. However, a bit more discipline can yield significant rewards.

If you need help, look for a consultant who focuses on the systems described above. If you need a recommendation, feel free to reach out to me.

Let's say, though that you just want to become more educated about business. You can start a simple continuing education program next week by subscribing to business magazines like Inc, Fast Company, Forbes, and Fortune. I've read each of these since I left college and learn at least one new thing from every edition.

What other business magazines add to your knowledge and expertise?

» An Ad Agency’s Rationale for Not Doing Proactive New Business

Lack of ROI is usually caused by one of four things

It's not uncommon to hear that an ad agency (or other type of marketing services company) is suspending their proactive, outbound new business efforts due to low Return on Investment (ROI).

In our company, this might sound like the agency head who recently told us that, "I'm too wrapped up in my business to get ROI from The List." Or, you might hear a CEO say, "We tried proactive new business for three months and didn't close any business."

I propose that positive ROI from proactive new business efforts is determined by four things:

1. An information resource that gets you to the right person
2. Creative or product excellence
3. Strong sales skills
4. Significant time invested in the process 

Let's briefly address each one of these.

Information Resource: An information resource, by definition, can't award you new business. It is designed to get you to the right person, saving you time and increasing the odds that you'll have productive conversations with decision makers. Only if you purchase a leads-driven resource - like DailyVista (full disclosure, this is division of my company) - will you know that your prospect may have a need when you approach them.

Creative or Product Excellence: Your product or service needs to be of the best quality possible in order to win new business. And, the more sophisticated the buyer, the better it needs to be. I've seen lots of small shops with mediocre creative aspire to work with the top brands in the country. If that's you, you're likely to experience low ROI.

Strong Sales Skills: A really good sales person can overcome just about all obstacles, so this is a critical ingredient for positive ROI. Keep in mind that the person setting appointments and the people attending first meetings need good sales skills. For more on the importance of the latter, check out this post.

Invest time: This is the single most important ingredient for positive ROI. Without the investment of time in proactive new business, the effort is doomed from the start. A great database, show-stopping creative, and superior sales skills will only be valuable if you consistently put them to good use.

As you can see, once you have a good information resource, your proactive new business ROI is determined by internal factors. I believe that if you challenge your agency to consistently invest the time you know you should in proactive new business, you'll get the ROI you've hoped for.

» Keep Proactive New Business on Track and Avoid “The Pinto Effect”

The single best way to improve results is to measure activity

Those of us of a certain age remember the Ford Pinto. It had problem: hit it in the rear-end and the fuel tank might explode. This was a rather nasty surprise that drivers wanted to avoid, which presented a sales problem for Ford.

I've seen a similar, though self-inflicted, effect with ad agency new business teams. Performance often isn't regularly measured and then all of a sudden someone in senior management realizes there's a problem, raises hell, and the next thing you know the team is blown up.

Having wrestled with this challenge over the years, I've finally realized that there is one way to avoid surprises by non-performers. CEOs can use this to manage their proactive new business team, and new business people can use this to manage themselves, improve their skills, and demonstrate this improvement over time.

Manage activities.

Most of us manage to results. By this I mean, we look at reports that show meetings held with prospects, meetings held with search consultants, number of pitches, pitches won, dollars of new revenue generated. The problem is that all of these are results; what you want to measure are the activities that caused these things to happen.

Instead, you might want to look at:

• Number of calls made - sales is a numbers game - without the calls, you won't generate new business. Track this by hour, by day, by week.
• Average length of call (use your phone system's call reporting software) - indicates how often you are able to engage with prospects and have substantive conversations. Track this by week and month.
• Number of "good conversations" (of a certain length and quality) - indicates your ability to ask good questions and develop rapport with your prospect. Track this each day and set expected minimums and goals.
• Number of meetings set - indicates your ability to demonstrate the value of meeting with your agency. Track this by day, week and month and set expected minimums and goals.
• Ratio of good conversations to total calls made - measures your ability to engage. Track by day, week to show improvement in this skill, as well as efficiency.
• Ratio of meetings set to total calls made - measures overall sales ability. How effective are you at getting the person to the table? Track this by week and month.
• Ratio of good conversations to meetings set - once you have a good conversation, how effective are you at establishing value and a reason to meet? Track by day, week, month.
• Ratio of meetings held to meetings set - measures how good a meeting is being set. If meetings are regularly cancelled, you aren't demonstrating the value of meeting with your agency. Track this by month.

There are other activity measures that you can employ, but these are a great start. Best of all, if you set up your spread sheets and create a few graphs from your data, you'll be able to show - in picture form - exactly what's taking place.

Even better - once you have pictures of what you're doing, you'll be able to see where you're falling short. For example, let's say that you have a 30% close rate from "good conversations" to first meetings. This means that you're really, really good and demonstrating value once you get that prospect into a lengthy conversation. You're probably asking good questions, and demonstrating value (if you want to learn more about questioning, search on "good questions" on my blog and you'll find a variety of relevant posts).

However, let's say that you're only able to convert 1% of your total calls to good conversations. Your opportunity to improve is therefore to learn to better engage with prospects. The best remedy for that is role practice.

Hopefully, you get the idea from this how to measure and improve your results. I've found that if you measure and track your activities, you'll avoid The Pinto Effect: you'll see early-on what the problems are, with plenty of time to take corrective action and avoid an explosion.

» New Business Skill Development: Convert More Meetings to Revenue

10 steps to win more new business from first meetings

Too often ad agency principals and new business people approach their first meeting with a prospect as an opportunity to "show up and throw up". I've seen it happen repeatedly over the last ten years, with the result that a hard-won meeting is a bust, the opportunity lost. The good news is that a more successful approach is within reach.

All it takes is practice.

As I mention in my post on converting more calls to meetings (read it here), The key to improvement is practice, and the easiest way to do it is "role practice". I spoke to an agency new business person yesterday who, when we touched on role practice said, "So it's like practicing my Yoga positions!" I've never thought of it that way, but I've read that some Yoga practitioners claim perfection is illusive, which is a good description of a first meeting with a potential client.

Perfection may be hard to achieve, but you can dramatically improve your conversion to new business projects or accounts won if you practice.

Here's how to conduct a first meeting role practice:

1. Set up a one-hour meeting twice a week for three weeks to improve your skills, and then at least twice before each first meeting.
2. Conduct the practice session in person, in an office environment similar to what you"ll encounter meeting a prospect.
3. Ideally, you should have three participants, each of whom regularly attends first meetings. During practice, one person will be the prospective client, another will represent the agency, and a third will be an "observer" (this is a key role).
4. During each role practice session, the participants trade roles, each playing each role once.
5. As the new business person, identify questions you want to ask your prospective client. Focus on questions that will engage them, build rapport, and help you learn about their company. This is not a time for you to present your credentials! It is about you identifying opportunities for your agency.
6. As the prospective client, identify who you are before you begin (e.g. VP Marketing for 3M), and then play the role that's been assigned to you. Be sure to vary your degree of "toughness". For example, sometimes be nice and let the agency representative engage you in open, comfortable dialog; other times, be more elusive. Your goal is to replicate the type of marketers you've encountered, making the practice session as real as possible.
7. Initiate each practice session. I like to have the agency representative enter the office just as they would a prospective client's, shake hands, and begin.
8. The practice conversation should last about 15 minutes, and then you should switch roles.
9. After each 15-minute role practice, the person in the new business role should critique their own performance, the prospective client should critique the new business person, and then the observer should critique both. Focus your critique on what was done well (e.g. How the agency representative quickly established rapport and chemistry), and where they can improve (e.g. What questions should have been asked, but weren't).
10. The observer is in the best position to critique the overall dialogue, to push the agency and prospect players to try new approaches, to suggest different types of questions, and to point out where the new business person missed key details due to not listening carefully. Improving your listening skills is the fastest way to improve your win ratio.

If you think about it, six hours isn't much time to dedicate to practice, but it's enough to bring your skills up a level. And, if you're disciplined and practice before every first meeting, you'll both get in your prospect's head (remember you'll each play the prospect during practice), and identify really good questions to ask.

As always, let me know if you have questions or other ideas about how to improve your first meetings.

» New Business Success Starts With Your Ad Agency Setting High Expectations

A homeless man provides a life lesson

My son got a powerful dose of wisdom from a homeless man yesterday. When I heard the story, I couldn't help but think about the applicability of what he said to business in general, and to ad agency new business in particular.

Here's the background. In Atlanta, as in many other cities, if you want to get better at a sport you need to play on a club team. My son has been playing soccer with a particular team for about seven years. This year, though, he decided to try out with another club that's known for attracting some of the best players and coaches.

On the way home from the first tryout, he was very pessimistic about his chances of making the team, complaining that everyone was better than him. My wife would hear none of it, and being the calm, demur person that she is (not!), and being up to her ears with his 13-year old attitude, she gave him a piece of her mind. The central theme was setting high expectations for yourself and never giving up. Much of this took place at a stop light; neither of them realized that someone was listening.

The next thing they knew, a homeless man was at my son's window saying,

Son, listen to your mother, like I should've listened to mine. If I'd set high expectations like she told me to, I wouldn't be homeless today. And son, you don't ever wanna be homeless.

What a statement, and what a lesson! Both son and wife were speechless.

I've been around many an agency or new business person who have set really low expectations for themselves or their agency. Perhaps it comes from the way they were raised, maybe from insecurity about the sales process, or perhaps lack of confidence in their creative product. But in any case, it's demotivating. Do you want to work where "same old, same old" is okay?

Contrast that with the CEO who has a vision and sets big hairy audacious goals for every department in the agency, and gets everyone to believe that together they can win.

Setting high expectations is the difference betwen maintaining the status quo or going backwards versus experiencing growth and opportunity. Which do you want in your business life? Are you challenging yourself and your agency's new business process? Are you setting stretch goals? Are you striving to learn and grow as a person so you can contribute more in your current role and create opportunities for yourself in the future?

» Ad Agency New Business Starts with Confidence

To be successful, a good new business hunter needs to feel their boss' confidence

Faye Hyman died six months ago after losing her battle with cancer.

I met Faye in 1997. When I took my new position, Faye was on probation, facing the loss of her job if her numbers didn't improve.

In this new role I had 40 direct reports in a severely under-performing sales organization. I had to quickly determine who was good, and who wasn't. Anyone on probabtion was on my short list to be fired.

One thing I knew, however, was that the easiest way to determine if a sales person is any good it to listen to them. If they prospect over the phone, record their calls and listen to them; if they network in-person, join them at their meetings, soley to watch and listen. (You'll be amazed at what you learn.)

So, I listened to Faye's sales calls and in-person meetings. I saw that she:

• Established rapport with her prospects
• Asked open-ended questions to determine their needs
• Identified and discussed ways we could help
• Set a next action, or asked for the sale - as appropriate

In a word, she was excellent. Her process was consultative sales by-the-book, flawless. The only thing she was missing was self-confidence. The look on her face and the way she carried herself made you feel that she was beaten down, almost like a dog that's been repeatedly kicked by it's owner. I immediately took her off probation.

Just two years later in 1999, Faye became a President's Club member. I believe she was then ranked #3 out of more than 200 sales colleagues. She continued that run for years, and then became a national sales trainer, teaching hundreds of others how to be truly professional sales people, in the best sense of the word.

I spoke to Faye for the last time a few days after a group of friends, colleagues and former colleagues held a party in her honor. She expressed optimism in her full recovery, and then said,

All that I achieved I owe to the confidence you showed in me.

Everything Faye achieved was the result of her own ability; she just needed to be released from the chain attached to her by her former boss so she could live up to her full potential.

What a lesson for all managers of ad agency new business people!

A good salesperson is always striving for attention; if you beat them down they will almost always underperform. The confidence you show in them, and they feel, may be the boost they need to achieve their potential.

» SAT Question of the Day Can Improve Ad Agency New Business

Measuring and graphing trends over time will show whether your new business process is improving, or not

If you have kids between 7th and 10th grades, you should know about The College Board's The Official SAT Question of the Day. It provides a daily question that is a fun and challenging way to learn about the types of questions asked on the SAT and how to answer them. As a parent, you will also be challenged (and happy that you don't have to go through that process again!).

The question on Saturday, May 30th made me think about how important metrics (measuring your activities) are to a successful new business process.

Here's the question that was asked:

In the figure to the left, "the large rectangle is divided into six identical small squares. If the perimeter of the large rectangle is 30, what is the perimeter of one of the small squares?" And your choices of answers:

• 5
• 8
• 9
• 10
• 12

To create the new business metaphor, think of each small square representing one of the activities of a well-developed new business program. They might be:

1. Direct marketing
2. Prospecting
3. Networking with colleagues, past clients, search consultants, and friends of the firm
4. Responding to RFPs
5. Organic growth
6. Agency public relations

If the perimeter of each small square represents the sum of the activities in the square, the individual activities you might want to measure for "responding to RFPs" might be:

• Number and average number received per month
• Number and average number of man-hours required to complete each
• Average and total number of days from receipt to submission
• Cost and average cost to complete each
• Ratio of "on to next round" divided by the number of submissions
• ROI: Pre-tax profit from wins that involved an RFP divided by total cost of RFP submissions

I'm sure you can add other metrics to the above list. If you break down each of the 6 major new business activities into what needs to be measured for each one, and then measure and graph trends over time, you'll soon know whether your new business process is improving, or not. With that information, you will be able to make the right decisions to improve your process.

So, the answer to the SAT question is 12. Whether you got it right or not, hopefully you now see how weekly (best) or monthly (at the least) measurement of your new business activities will improve your ad agency's new business process.

In any case, good luck with your daily Question!