New Business Intel

» New Business Face-to-Face or Virtual?

Study reveals execs prefer face-to-face

According to a recent Forbes Insights study, business executives prefer face-to-face meetings and conferences over virtual meetings, and overwhelmingly agree that they're necessary to build deeper, more profitable bonds with business partners. While web-, video- and teleconferencing have their role, it takes human interaction to accomplish certain business objectives.

Some new business people will readily accept a conference call in lieu of an in-person meeting. This survey of 760 business executives may give you added incentive to secure that in-person meeting whenever possible.

Survey highlights:

59% of executives say they will use virtual meetings (teleconferences, video or web conferences), and stated that their use has increased in the recession due to their lower cost and reliability.

However, 84% of executives said they prefer face-to-face over virtual meetings.

Those that prefer face-to-face meetings believe they facilitate:

• Building stronger, more meaningful relationships (85%),
• The ability to “read”another person (77%), and
• Greater social interaction (75%). 

Those who favored virtual meetings took a bottom-line approach, saying they:

• Saved them time (92%),
• Saved them money (88%), or 
• Offered greater location flexibility (76%).

Executives prefer face-to-face meetings when give-and-take is required. They prefer virtual meetings when disseminating data, or when time is a concern. Notice that the former is perfect for the agency-hiring process, but the latter is certainly not.

Many executives expressed concern that attendees did not give their full attention to virtual meetings.

• 58% admitted that they “frequently” surf the web, check their email, read unrelated materials and do other work during virtual meetings.
• 64% of those who prefer virtual meetings like them because they allow them to multitask (i.e. they're not paying attention to you). 

87% agree that there are tangible business benefits to in-person, face-to-face meetings that outweigh the cost savings of alternative, technology-based meetings.

Executives also believe that face-to-face communication:

• Is necessary for effective teamwork (80%),
• Builds stronger bonds (81%).

It may be "old school" to prefer face-to-face meetings, but as this study indicates, they're important and effective, so keep them coming!

If you'd like to request a copy of the study, click here. Forbes Insights is the custom research arm of Forbes Media, publisher of Forbes magazine and Forbes.com.

» Benefits of a New Business Referral System

The lifeblood of most agencies

When you analyze the cost of acquiring a new client, generating new business from referrals is usually the least expensive. Realizing this, the natural question to ask is, "How do I get more?"

I've been thinking about this and did some research to help me put together a fairly simple referral-building plan. Here are some ideas that I hope will be useful for you. If you have additional ones to add, I'd love to hear your suggestions.

Define Your Referral Network

• Identify and categorize your prospective referrers: these should include past and present clients and co-workers, partners, affiliates, friends and family, vendors, etc. You might list them in column one of a spreadsheet.
• In column two, indicate how fresh they are. You might use a letter or number system: for example, an A could be very fresh and a D 'haven't talked to them in five years'. The resulting groupings will help you focus on nurturing the freshest ones and reacquainting yourself with the stale ones.
• In column three, segment them by industry, region of the country, or target companies. How you do this is best determined by how you plan to prospect.
• In column four, prioritize who you want to approach when, and then assign responsibility to specific people, with due dates and milestones.

Determine What's In It for Them

Get your new business team together and create a value proposition that's interesting and meaningful for each person you plan to approach. It needs to be clear what's in it for them. (Once you figure out what's valuable for them, the quality of your referrals should improve dramatically.) Answering these questions should help you define your message or offer:

• Why should they want to help you?
• What will they get out of it?
• How will doing so help their company or them individually?
• How will you help them in return?

Invest Time To Get a Personal Introduction

The most common referral is getting permission to use someone's name to open the door. While we'll all take this type of referral, the real "golden key" is a personal introduction. How do you do this? Your best chance is to help them first so that they'll be much more willing to help you in return. As you do this you want to:

• Get to know them really well, and they you.
• Truly understand their needs so you can refine your "what's in it for them" (when the time comes).

The only way to get a personal introduction is for your prospective referrer to really know you, and even better for them to know you and your firm.  This process requires patience, so be careful not to put your hand out too early! You have to earn the right to ask for a referral.

Stay in Touch

The game isn't over when you get a referral. Those who open a door for you want to know the result of their introduction, so follow up and tell them what happened. Don't ask for more help, but recognize that once they know you'll do well by those they introduce you to, they'll be likely to help you again.

Thank Them!

Make sure your referral network knows how much you appreciate their effort on your behalf. Thank them in a meaningful way. For example,

• Write a hand-written thank you note.
• Take them to dinner, a ball game, to play golf - make it something they like to do.
• Include them in the celebration after winning an account.
• Introduce them to someone you know that they'd like to meet.
• Offer them help or free service on an important project they're responsible for.

If multiple people in your agency each have and carefully nurture a well-thought out, small referral group, it should help you create a long-term new business pipeline.

» New Business Prospecticide

Add value so you don't kill your prospects

Pros-pec-ti-cide  [pros-pek-tuh-sahyd]

-noun

1. The act of killing prospects.

What a great word! I came across it in an article by Paul McCord. He raises valuable issues and recommendations that I'm passing on below. I've edited it down and oriented it towards new business (to read the full article click here).

The more timely and pertinent the message, the more value it adds. The more value you add, the more valuable you become. The more valuable you become, the more you ease competition out of the way.

You commit prospecticide when you kill your prospects through communication that trains them to avoid you - because you’re focused on your needs, not theirs. You're doing it when your phone calls, e-mails, voice mail messages, and other communications are designed to advance your cause, not theirs.

Every communication you have with a prospect trains them either to:

• Pay attention to you because you bring value to them; or,
• Avoid you because you waste their time.

In a long sales cycle, which is typical of ad agency new business, prospect communication is crucial.

• Each time you send something, call or leave a voice message, you're telling your prospect what you think their time and attention is worth.
• You’re telling them whether you’re concerned about them - or about yourself.

With every call, you're also telling your prospect a great deal about you and your agency: What you think is important, and whether you have anything of value to say.

Before sending anything to a prospect, picking up the phone or leaving a voice message, ask yourself a few questions:

1. Would I want to hear from me?
2. Would I want to receive this?
3. Does it represent me well?
4. Does it add value to our relationship?
5. Is it designed to benefit the prospect - or me?

If your answers don't indicate that the communication is prospect-centered and adds value, why deliver it?

Inexperienced new business people may not pay attention to the communications they deliver to their prospects. The objective, they figure, is to keep their name in front of them and let them know they're interested in working with them.

The issue isn’t with the objective, but with the way it's done. Examples of poor follow-up communication include:

• The “How ya doin’?” call.
• The “Is there anything I can do for ya?” call.
• The “Did you get my package?” call.
• The “I couldn’t reach you, but I wanted to see if you need anything” e-mail.
• The  “Here’s our information again in case you misplaced it” package.

These communications are time-wasters for your prospects: They teach them to avoid you. Your future calls are likely to be screened and your messages not returned.

What can you communicate to add value?

• Articles or white papers relating to aspects of their company or industry that may impact their business, that they're unlikely to have read.
• New agency services that enhance your ability to meet their needs.
• Awards your agency has won - if they're relevant to their business.
• Articles relating to an interest your prospect has outside of work (providing you know them well enough to send it) - from a source they're not likely to discover on their own.

To reach your prospect, have your calls returned and separate your agency from the competition, your opportunity is to stop teaching your prospects to ignore you and begin teaching them that you're the new business person who adds value to their day.

If they determine they need you and that you add value to them and their business, you’ll have far less difficulty gaining their attention.

» 5 Reasons New Business Change is Hard, And How to Avoid The Common Traps

Real change requires real effort

A recent Harvard Business School article addressed why it's so hard to change, which is a good follow up to my last post on the need for constant change and improvement in ad agency new business.

The authors of the article, Marshall Goldsmith and Dr. Kelly Goldsmith, outline five reasons why change is difficult. What follows is their research in their words, to a great extent, though I've reduced the amount of copy and made a number of edits.

1. Ownership. For your effort to change to have a chance of success, you have to take personal ownership and have the internal belief that "This will work if, and only if, I make it work. I am going to make this work."

2. Time.  Most of us set goals and then underestimate the time needed to attain them. We have to learn to be realistic about the time we need to change habits. Those that have taken years to develop won't go away in a week. Set time expectations that are 50% to 100% longer than you think you'll need to see results — then add a little more.

3. Difficulty. Not only does it take longer to achieve our goals than we think it will, but it also requires more hard work than we anticipate. It's important to accept the fact that real change requires real work. Plan for change to be more difficult than you think it should to help prevent the disappointment that can occur when challenges arise later.

4. Distractions. We have a tendency to underestimate the distractions and competing goals that will invariably appear. Plan for distractions in advance. Assume that crazy is the new normal. You'll probably be close to the reality that awaits.

5. Maintenance. Once you've put in the effort needed to achieve a goal, it can be tough to face the reality of what's needed to maintain the new status quo. If you don't, however, all your effort will be in vain.

Real change requires real effort. The "quick fix" is seldom a meaningful one. Distractions and things that compete for your attention are going to crop up — frequently.

» Perfection in Ad Agency New Business Is…Change

A call to action

You've probably heard the expression, "Change or Die". Winston Churchill had another take on it that, to me, is even more powerful:

To improve is to change; to be perfect is to change often.

A speaker I heard last week talked about this quote in the context of leadership. In particular, that change is critical to organizational growth and development.

Many ad agencies and marketing firms are quite good at innovation when it comes to marketing - most likely because it's a requirement for client retention. It therefore makes sense that they're comfortable with this type of change.

However, as the speaker continued it occurred to me that you really don't see that much experimentation and change in new business. And, even when you do, what appears to be a new idea is often just one that's been recycled or re-purposed from what worked 10, 20 or even 30 years ago.

And this thought raised two questions:

1. What does new business improvement look like?
2. What change is necessary?

The low-hanging fruit of new business change and improvement for most advertising agencies includes:

• Developing a one-page new business plan with both proactive outreach and reactive marketing objectives and tactics.
• Working the proactive outreach plan every week.
• Implementing planned marketing tactics every week.
• Measuring activities weekly and summarizing results weekly, monthly, and quarterly.
• Making changes as soon as results don't meet plan, and then measuring the impact of the change(s).

If your agency implements these five steps, your new business process will show significant change and improvement. However, rather than striving for perfection, first aim for continuous improvement that is both manageable and measurable.

» To Defend or Not To Defend - It’s a New Business Decision

And it needs to be a sound business decision

A few years ago I was faced with a decision about whether or not to file a lawsuit. As I considered my options, an old friend related to me what his even wiser lawyer once counseled him about lawsuits:

You have to decide if this is about business or about pride. Because if it's about business, the cost outweighs your potential return. But, if it's about pride, then I'll happily take the case and you'll help put another one of my kids through college.

I thought about this advice after reading a recent article in Ad Age, which reported that only 5-10% of incumbents successfully defend an agency review. And yet, as Judy Neer of Pile and Company estimates, incumbents are asked to participate in nearly 50% of their reviews, and most of the time they do. (Which means that those agencies are losing a lot of money.)

Let's turn that statistic around:  Your agency has a 95% chance of losing a review.

Before making a decision about whether or not to participate in a review, I encourage you to do two things:

1. Determine the following numbers: your average cost per per pitch? Your win rate? Your cost per win? You need to know these numbers so that you can make a smart business decision about what you'll likely spend defending the business - before you're faced with the emotion that comes with actually losing a client.
2. Decide as an agency: do you want to set a firm policy about whether you will or won't defend? The Ad Age article cites examples of how agencies like Crispin (won't defend) and the Richard's Group (usually won't defend) handle it.

When to participate?

• Mandated reviews (e.g. government contracts; rules set by procurement or purchasing departments).
• Roster reviews.
• Agency consolidation reviews.
• When you have very strong, deep relationships and the results to back them up (and there's been no change in management).

When not to participate?

• When there are serious concerns (from either side) about the agency relationship or business performance.
• Management changes, particularly when you know that the incoming leadership has successfully worked with other agencies.
• Announcement of an unscheduled review.
• Announcement of a non-roster review.

Like the emotion of wanting to get even, defend yourself, or inflict equivalent harm that you might feel when thinking about sueing someone, it's easy to get caught up in the emotion of wanting to fight and "spend whatever it takes" to keep your hard-won or long-tenured client. However, the smart new business decision may well be to spend the money winning a new piece of business.

» $40,000 Off Our Fees. Your Next New Business Pitch?

($ Canadian, that is.)

How many of us are willing to offer $40,000 off agency fees to bring in a client? Well that's what The BrainStorm Group did at the end of May. And it worked.

Ron Telpner, chairman and CEO of the independent Toronto-based agency, was asked by a reporter from Canada's National Post newspaper (read interview here), "Have you won any clients?" and he responded,

Yes, and we exceeded the other, equally important objectives we established for this campaign -- increasing the number of RFP invitations, dramatically increasing visits to our new website, and generating increased exposure and awareness through media coverage, which we saw in Canada, the U.S. and even in Japan.

They also did what he calls Walking The Talk:  they advertised.

Telpner refers to the "inherent hypocrisy of an agency that would recommend advertising to its clients as a strategy while not having enough belief in the power of advertising to use it for themselves." So, they ran their $40,000 off coupon in newspapers and online, and it worked exactly as intended.

At first I thought this was just a terrific promotion, and then I thought about it from an ROI standpoint. Consider this (and mentally add to the list or feel free to comment, below):

• How many RFPs do you respond to each year?
• How many pitches do you participate in?
• How many of them do you win?
• How much do you spend on submitting RFPs? On pitching?
• What's your average cost per RFP submission? Per pitch? Per win?

If you do the analysis, my guess is that a $40,000 off offer isn't as expensive or outrageous as it first might seem.

While it has now been done, what other innovative ways might you generate new business leads, publicity, and buzz - that really aren't that expensive?

» Do Retainer or Project Clients Build an Agency’s New Business Pipeline?

What's the right mix?

Ad agency clients regularly ask us this question, "What's the best mix of retainer vs. project work?" I think the answer can determine how successful you are at creating a sustainable new business culture and a healthy revenue pipeline.

Retainer-driven agencies

Most agencies strive to land retainer clients for many good reasons, not the least of which is that they represent a predictable revenue stream. A sufficient retainer helps to cover overhead, allows you to hire good people, plan for the future, and hopefully do good work. Having a handful of retainer clients normally equals profitability. However, it may help you be lazy about new business, and it can be risky.

Case study: a family friend was, until recently, the chief creative officer at a 40-person, well-regarded regional agency. They'd had one big retainer client for 10+ years and felt very confident about keeping them. This client represented 70% of their agency's revenue. About 18 months ago I started pushing him to get his team to start prospecting for new business, but they never did. Of course, we can all guess what happened next: CMO turnover, new agency hired. His former agency is now a small fraction of its former size, my friend is out of a job, his family had to move in with his in-laws, and they and their many former coworkers are struggling.

The sad part is, while the client loss may have been unpreventable, an active new business program could have kept the team intact and avoided the massive upheaval that impacted dozens of lives.

Project-driven agencies

Most agency principals I know who run project-driven shops are always trying to land retainer-based clients. They dislike not being able to predict revenue more than a few months out. They also dislike the constant hunt for new clients, and the never-ending need for talented account managers to grow existing clients. That said, they're often very good at new business. They're good networkers, aren't afraid to pick up the phone, and understand that there aren't any "silver bullets" or quick fixes. As one such principal said the day before yesterday,

New business is a numbers game, and it takes time.

The ideal mix

From a strictly new business perspective, I think the ideal client mix is something like this:

• 50% retainer-based clients, with no more than 20% of your revenue from any one client.
• 50% project-based clients, representing as many clients as you can handle above your minimum project size.

My rationale is this: having 50% of your revenue coming from project work requires that you're constantly prospecting for new business. If you are, some percentage of your projects clients are likely turn into retainer clients, which will allow your agency to grow. When this happens, however, resist the urge to alter the 50/50 balance, as that will reduce your "hunter mentality", which is the lifeblood of your agency.

I'd love to hear if this balance makes sense to you.

» 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!

» Ad Agency New Business is a Marathon, Not a Sprint

One benefit is time to think and plan

In a recent post I wrote about the importance of getting away from ad agency new business to get refreshed and re-energized. But there's more to it: it's taking a long-term view of the work you do.

As a former long distance runner, I often describe work as a marathon, not a sprint. This metaphor helps me to pace myself, set goals, train properly, set realistic deadlines, and think.

Here's what I mean:

• Pace: Unless you're an elite runner, you can't sprint a marathon. If you do, you'll burn out. The same applies to work. If you work seven days a week as hard as you can, before too long your productivity will plummet.
• Goals: Runners set many goals: total miles per week, time per mile, miles for long runs, short runs, etc. Goals for new business might include calls per day, conversations per day, hours spent researching; number of networking meetings, first meetings, RFPs submissions per month; wins per quarter; win rates, etc.
• Training: Marathon runners often train 5-6 days a week. They run in the rain, snow, heat and wind. Nothing stops them. Do you train that rigorously at work? Most of us do initially, but then settle into our routines. Are you creating new challenges weekly? Monthly? Are you training for your next job, and training someone to replace you?
• Realistic Deadlines: Runners plan to run a marathon in the future, because they know it takes time to prepare. At work, think about setting deadlines for yourself and your team that are challenging, yet realistic. Occasional sprints can be great for team building, building your culture, and overall morale. However, too many "invented crises" will wear you out.
• Time to Think: Beside the endorphin rush, for me the best part of running was letting my mind go. I would often head out for a run when faced with a difficult problem. By the time I got back, I'd figured it out. You can't do this when you're sprinting. Similarly, at work, you if you're always head-down sprinting - fighting fires, or dealing with client or employee issues - you won't have time to think. Perhaps you can block quiet time off on your calendar, or go for a walk at lunch or schedule workouts a few times each week.

Success comes in many forms, but one thing is certain: if you burn out early any success will be short-lived. You may find that thinking about work as a marathon will build your endurance and productivity.