By Category: New Business Strategies
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?
by Todd Knutson | published on May 20, 2010
How valuable is it to hear directly from three CMOs to learn how they like to be contacted, what you need to know about them before you do, how to pitch, and how smart you need to be about their business? If that's of interest, read on.
The current and former CMOs of Wyndam Hotels, Capital One Retail Marketing, and Cablevision sat down at the recent New Business Conference to discuss ad agency new business. They spoke candidly about how to prospect them. Their insights are similar to those expressed by the CMOs of large and small companies alike.
Here's what they said, written from the perspective of the CMO:
What you need to know about me:
- Understand my business.
- Understand my industry.
How to interact with me:
- Have an idea about how to apply your expertise to my business.
- Share your insights on my business. Tell me how we're doing. If you think we're doing something wrong, tell me so (respectfully).
- Listen to me as we get to know one another. Respect me. Demonstrate that you were listening.
What you need to recognize about big companies:
- I'm trying to stay one step ahead of other executives on the senior management team. How can you help me be smarter?
- I'm the only voice of marketing on the team.
- The board of directors is interested in ROI. Know how you're going to drive sales.
How to succeed working with big companies:
- Educate procurement. Many procurement groups want to reduce the cost of agencies. The more educated they are about agencies, the better decisions they'll make.
- When there are product groups in a company, make sure you're talking to both marketing and the product group(s).
What to remember when you're going to pitch me and my team:
- Demonstrate results.
- Show your emotion and passion.
- Remember: the agency needs to be smarter than the client - that's why we're hiring you.
The best way to get on my radar:
- Get referred in by someone I know; or,
- Have something to say that's really relevant to my business.
This is great stuff. Hope you can put it to good use.
Laurie Coots on growing your agency
by Todd Knutson | published on May 18, 2010
Laurie Coots is the global CMO for TBWA/Chiat Day. She's one of the smartest ad agency new business execs you'll ever meet. When she speaks, people listen. Laurie shared her thoughts on how to grow your agency at this year's New Business Conference.
I took away four simple and compelling points:
- Pick up a crumb and run with it. Pursue clients you want to work with. Incubate the small projects, as well as any other small clients you attract. Do great work. Great work will lead to more work. Crumbs Laurie pursued and grew last year created $11M in new revenue for TBWA.
- "Productize". Take what you're doing and put a price on it. Avoid charging by the hour. Consulting firm McKinsey and Co. does it this way; why not your agency?
- Learn to Sell. Quantify the opportunity. Get the decision makers in the room. [I'd add: ask smart questions, listen carefully, propose a solution, ask for the business.]
- Reinvent your behavior. Decide how you want to be, not how you think you should be.
Nurturing your crumbs is a perfect strategy to generate consistent revenue growth. In good economic times and in bad, focusing on smaller projects with growth potential gets you in the door early.
One of the great differentiators between agencies and their new business leaders is their ability to sell. If you really learn to sell, you'll stand out from the thousands that don't do it well.
I learned the power of "productizing" as a teenager. I had an odd-jobs business with two employees. When I charged by the hour, I knew how much money I'd make. However, once I created a product, I was able to charge my customers a flat fee and make much more. The technological capabilities of many agencies position them perfectly to charge a flat rate for certain services, and generate significant profits.
My last post about Alex Bogusky echoes Laurie's call for reinvention. Alex referred to it as "breaking the rules". However you choose to think about it, clients are looking for agencies that stand for something. You have the ability to choose who you want to be.
Cheating is okay
by Todd Knutson | published on May 13, 2010
If you've ever had a dog, you'll recognize this: talk to them using a certain tone of voice and they'll cock their head to the side and look at you expectantly. They know you're talking to them, and they know it's important that they try to understand. Of course, understanding is hit-or-miss.
So it was for me listening to Alex Bogusky in April. I've read about Alex and Crispin Porter Bogusky and seen him quoted over the years, but this was the first opportunity to hear him speak, and his topic was new business. Remember, he's a creative guy and not every creative guy speaks new business. Which, of course, was one of the first things out of his mouth..."Why the f__k did I accept an invitation to speak at a new business conference?"
Perhaps I'm not the only one in the audience who felt a bit like the dog. My analytical, logical brain was trying to wrap itself around the words coming from the mouth of someone who's probably more creative in a day than I'll be in a year.
That being said, I did boil his remarks down to something that's thought-provoking to me. Here goes: Alex Bogusky on New Business in 50 words or less.
Definition: Cheating = Breaking The [Unwritten] Rules
Crispin Porter Bogusky's success in new business was breaking the rules that the previous generation created to protect what they'd created. Don't cheat if you don't want to win. Cheating is breaking the rules. If you break the rules, clients will think you're smart.
How do you cheat?
- Identify the rule(s).
- Break them.
As one of the rule-followers, implementing advice like this is hard. So I'll be looking for more creative people to help identify the unwritten rules that should be broken.
How can you break rules to help your agency be more successful?
"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!
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.
Only if you get paid?
by Todd Knutson | published on April 22, 2010
Five year-old hot-shop Droga5 now only pitches new business if they get paid. Why? They know they win 60-70% of the time when they are, versus only 20% when they're not.
Other agencies pitch and do spec work for free.
Given the pressures on agency new biz directors to generate revenue, what's a new business person to do?
A series of speakers at the 2010 New Business Conference weighed in on the issue of pitching. I tracked the range of opinions on the subject; here's what I heard:
- Be selective - only pitch when you believe you have a greater than 50% chance of winning (this has been a recurring theme over the years, voiced by numerous speakers whose agencies have very high pitch-win rates). Further, multiple speakers who carefully tracked their agency's performance over time, reported that they only win competitive pitches 20% of the time.
- To win a pitch, at least one of the agency principals should be passionate about the brand or company.
- You increase your odds of winning if you only pitch when you're paid. (How much should you charge? As one person said, "charge enough to make the client feel it and take you seriously".
- Don't do spec creative unless you get paid. (Think about it this way: if you give away your agency's product, you're saying it has no value, and what does that say to your creative team?)
As I read this list I immediately think, "chicken and egg". Which came first? Did these successful agencies start off only pitching if they were paid, or, did success allow them to establish these rules?
For the agency with average creative work, or those in a highly competitive market, it could be a tough decision to limit potential opportunities by adopting these principals. On the other hand, if you have great confidence in your work and your talent, clearly establishing how you'll work with prospective clients is likely to set you apart from your competition, and create a air of exclusivity and "eliteness" around your agency.
Another even more compelling point is this: if every agency demanded to be paid to pitch or to produce spec creative, it would become the industry norm. Of course, that assumes that there are no (and never will be) agencies out there who are desperate for work....
My two cents: if you can confidently place a stake in the ground and always get paid to pitch, go for it. I think you'll be better, and more profitable, for it.
Latest information from research firm Mintel
by Todd Knutson | published on April 21, 2010
Krista Faron, Lead Innovation Analyst at research firm Mintel, gave an inside look at the industry categories predicted to experience growth in the coming year during the recent 2010 New Business Conference. And here are the contenders...
- Vitamins and dietary supplements.
- Luxury goods - on the high-end, companies like Tiffany, Williams-Sonoma and Hermes, as well as 'entry-level exclusive' brands.
- Private label goods.
- Sub-premium beer (e.g. Pabst Blue Ribbon).
- Craft beer - those positioned as artisan products.
- Anti-aging skin care.
- Electronics - those with special features (e.g. 3D), offered at a price-premium, with cool technology.
- Retail - dollar stores are growing at the low-end, as are exclusive "members-only" online retail sites offering deals in fashion, travel, beauty, home decor, etc.
- Green - if there's a financial benefit to consumers. For example, you'll buy something that's going to save you money over time.
- Pet food and pet services (e.g. insurance).
- Teen market - any products that appeal to this demographic.
- Out of Home entertainment - concepts like Cinebarre are a good example.
Filters you might consider as you evaluate categories:
- Find products that are special, unique or well-differentiated - that's what people will pay for.
- If there's a choice of companies with equally appealing products, pursue the company with smart management.
Trends to keep in mind:
- Three of five males between the ages of 18-24 are now living at home.
- 20% of Baby Boomers have a parent living with them. This is creating a "multi-generational" market in households, which offers a big opportunity for marketers who can find ways to effectively tap into it with appropriate products. (Think about how this trend will impact how and what these consumers will cook; the type of car they'll drive; what type of home they'll purchase; what type of household goods, furniture, etc. they'll need, etc.)
- Full-service dining should also experience growth as more consumers choose to eat out with greater frequency - rather than preparing meals at home for larger, multi-generational family members.
There are lots of prospecting categories to consider, above, not to mention those in a recent post. So, fire up your prospecting database and start investigating companies that meet your criteria!
How does it make you feel?
by Todd Knutson | published on March 31, 2010
I received two thank you notes in the last month that were different from all others: neither was sent via email. One was an "old-fashioned", hand-written note from a friend. The other was from a prospective vendor, typed on personalized business stationary, personally signed. Both made a lasting impression. Both have implications for ad agency new business.
The note from a friend came after I made the effort to visit him, his wife and 9-month old daughter in Seattle, on the way to the 4As conference in San Francisco. While it wasn't exactly on the way for me, it was at least on the same coast, as I was flying West from Atlanta.
His hand-written note expressed his appreciation for my visit and what my friendship means to him. But more importantly, and this is the new business implication, here's what it said about him:
- I care enough to take the time to write a really well-written note, by hand (not dashing it off in an email);
- I care enough to say really heartfelt things - on paper - even if (as a typical man) I may not verbalize it.
The note from a vendor came from a potential landlord. We tend to outgrow our office space every four or five years, and I've been through two moves in the last 10 years. Never before has the owner of a building taken the time to write and express his personal interest in our becoming a tenant.
At the time he wrote the note, his building was one of six properties we'd narrowed down into a consideration set. It took this owner just a few minutes to separate himself from dozens of other commercial real estate people we'd been interacting with. Here's what he did:
- He showed that as the owner, he cared enough about his building (i.e. his business) to meet prospective tenants.
- He discovered that we live in the same neighborhood, though had never met, and related that in his note - i.e. he personalized it, revealing a connection that neither one of us previously knew was there.
- He made himself available to answer any questions as we proceeded through our selection process.
I kept his note and commented on it to others. His thoughtfulness made an impression. In fact, we're going to have lunch together in a couple of hours and his building is one of our two finalists. Is that just a coincidence?
You may fall into the "it's far easier to send an email thank you note" trap as easily and often as I do. Note to self: get out of the trap!
Taking the time to think about and craft a well-written thank you note can be an incredibly powerful new business tool. It can quickly separate you and your firm from everyone else who doesn't bother to write, as well as from those who do, but who will resort to email.
If your note strikes the right cord, you have the opportunity to elicit the ideal response: "I'd like to do business with this person. They care. They have good manners. They'll do good work on my account."
Interview with Victors and Spoils' John Winsor
by Todd Knutson | published on March 25, 2010
Brent Hodgins of Mirren recently interviewed John Winsor of Victors and Spoils, which calls itself the "The world's first creative (ad) agency built on crowdsourcing principles." John is a serial entrepreneur: Victor and Spoils is the fourth company he's started and the eighth he's invested in. He most recently worked in a very senior position at Crispin Porter & Bogusky in Denver.
What is Crowdsourcing? John defines it as:
The act of taking tasks traditionally performed by an employee or contractor, and giving them to a group of people or community, through an "open call” asking for contributions. Hence, provide all of the services that a traditional agency does, from brand strategy to creating TV spots and branded digital tools.
How is it used? Does it work?
John cites two examples of crowdsourcing advertising from this year's Superbowl:
- "Doritos and Career Builder both outsourced their ads from a crowd of consumers", cutting agencies out of the process.
- Google in-sourced their ad from their employees.
- The Doritos and Google ads were rated among the highest.
Victors and Spoils is applying crowdsouring to the way they work:
We feel like an ad agency. But we work like a crowdsourcing platform. At the core of our agency is our creative department. A creative department made of everyone from art directors and copywriters to strategists and producers who come together to solve strategic problems. A global digital community that will not only be rewarded for the solutions they develop (both individually and as a group) but also for participating in the community itself.
Why create an agency like this, and why now? In John's words:
- The business of marketing and advertising is in the midst of a massive cultural shift.
- While crowdsourcing is certainly the buzzword of the moment, there’s actually a much bigger and deeper change going on with the way work gets done that is changing not only marketing but many other industries.
He continues...To me, there are three disruptive forces [at work]:
- The expectation of transparency;
- The further digitization of the workforce; and,
- The rise of the curator class.
John believes that:
Companies need an alternative to both current ad agencies as well as current crowdsourcing platforms. One that offers the strategic direction, engagement and relationship management that agencies deliver today, but one that also delivers the engagement, cultural relevance, results, and return on investment that crowdsourcing (if managed and directed well) can deliver.
John will be providing his insights on Crowdsourcing at the Mirren New Business Conference 2010. I've attended the conference since its inception and recommend it. If you plan to go and haven't registered yet, you'll receive a discount if you use this code: LIST2010. [Neither I nor The List have any financial interest in the conference.]