By Category: New Business Tools/Resources
What procurement does and why it exists - from the client's perspective
by Todd Knutson | published on April 19, 2012
Many a new business person's blood pressure increases when you start talking about procurement. Frustration is natural when attempts to "persuade the unpersuadable" are unsuccessful - as in trying to communicate creative or subjective value to a person who's really only interested in getting the cheapest price.
Like it or not, procurement is here to stay.
Think about this: at a recent ANA event procurement reps outnumbered VPs of marketing! You might take that as a bad sign, or you might conclude that it's good news: representatives of procurement departments are trying to educate themselves about marketing and advertising. If this is even partially true, it should make every ad agency new business person who works with procurement want to better understand the function.
David Wilson, President of Stirling Consulting, provided an in-depth look at procurement during the recent 2010 New Business Conference. Here's a summary of my notes from the session.
Procurement is often looking for new suppliers to introduce to their internal client (the marketing team). Dont' be afraid to get to know them and develop a relationship. They're not the enemy.
Why does procurement exist? It's driven by the needs of the organization, which is usually to reduce expenses and increase working capital (the latter is usually accomplished by collecting amounts owed faster and paying vendors slower).
What is procurement's internal reputation? In a 2009 survey, 78% of Chief Financial Officers viewed procurement positively. Why? They're achieving 5%-20% annual cost savings and helping companies better manage risk. So, the trend to use procurement will continue.
Definition of a good procurement process: "An ongoing process of decreasing overall costs and managing supplier risk, while improving internal and external processes."
Principals of a good procurement process:
Focused on total cost (not just price), quality and service
Have clear objectives
Make objective decisions
Be grounded in strategy
It's important to note that within "the big corporation", procurement departments are at varying stages of their own evolution and maturity:
Competent (e.g. are very knowledgeable about marketing, savvy about developing innovative partnerships)
Lagging (e.g. "siloed" from the rest of the company, just focused on reducing costs, short-term oriented, ignorant about marketing)
As an agency new business person, you need to be prepared to deal with all three types.
What's procurement's decision criteria? For a "competent" department, they will consider quality, technology, strategic value, service, innovation and cost. When considering agency selection, "cost is significantly down the food chain".
Important things to recognize about procurement:
Agencies must understand client decision making
Harness the client's self-interest [as discussed in numerous posts, your proposal needs to be all about them, not you]
Identify the additional value your agency brings to the table
Recognize the cards that you hold - you're likely smarter about your subject area than anyone inside the prospective client
Hope this helps you crack the procurement nut!
TED brings them together
by Todd Knutson | published on April 04, 2011
One of the most satisfying aspects of working in the ad industry is knowing some of the people and companies that create ads that move you. Sometimes, those ads appear together. The folks at TED did this with the ten winners of their recent "Ads Worth Spreading" competition.
These ads "run longer than the TV-standard 30 seconds. And that's the key! In 2-3 minutes, there's enough time to really tell a story, share an idea, make an authentic human connection, become unforgettable."
This is really good stuff if you're an ad agency new business person -- you know how the phone rings when it's your agency that creates work like this.
So, sit back, relax, and click here to view ten inspiring ads. And, another fourteen honorable mentions, if you're so inclined.
by Todd Knutson | published on March 23, 2011
With Salesforce.com's acquisition of Jigsaw, you can now easily export contacts from Salesforce.com to Jigsaw. (For more on crowd-sourced data sources like Jigsaw, click here.)
However, ad agencies, as well as any other Salesforce.com user, must now recognize the significant intellectual property issues presented by this merger. Most importantly:
Whose contacts are in your current Salesforce.com account, or your internal database?
Do you have the right to export these contacts to a third party? If so, under what circumstances?
May that third party sell them?
This is important as your agency may be opening itself up to potential legal liability. Consider:
If you export contacts, purchased from a third party, into Jigsaw, what is your potential liability for violating the third party's license agreement?
If you import contacts from Jigsaw that belong to a third party, what is your legal liability for doing so?
Here are extracts from the license agreements of popular providers of new business prospecting information to ad agencies:
You are specifically prohibited from: (a) using or permitting the use of Information to prepare an original database or a comparison of the Software to other databases that are sold, rented, published, or furnished in any manner by or to a third party; (b) using or permitting the use of Information for the purpose of compiling, enhancing, verifying, supplementing, adding to, or deleting from any mailing list, business directory, or other compilation of information that is sold, rented, published or furnished in any manner to a third party.
The Content on this Web site is for use by the Subscriber and its Users only and not for commercial exploitation. A User may not decompile, reverse engineer, disassemble, rent, lease, loan, sell, sublicense, or create derivative works from either this Web site or its Content. A User may not use any network monitoring or discovery software to determine the site architecture or extract information about usage, individual entities or users. A User may not use any robot, spider, other automatic software and/or devices or manual processes to monitor or copy this Web site or its Content without the Provider’s written consent. A User may not copy, modify, reproduce, republish, distribute, display, or transmit to third parties outside the User’s agency network for commercial, non-profit or public purposes any or all portions of this Web site without the Provider’s written consent. A User may not use or otherwise export, or re-export, this Web site or its Content pursuant to the export control laws and regulations of the United States of America. Any unauthorized use of this Web site or its Content is expressly prohibited.
Redbooks (Lexis Nexis):
The Content on the Site is provided solely for your personal use and not for commercial exploitation. You may not decompile, reverse engineer, disassemble, rent, lease, loan, sell, sublicense, or create derivative works from the Site or the Content. Nor may you use any network monitoring or discovery software to determine the site architecture, or extract information about usage, individual identities or users. You may not use any robot, spider, other automatic software or device, or manual process to monitor or copy our Site or the Content without our prior written permission. You may not copy, modify, reproduce, republish, distribute, display, or transmit for commercial, non-profit or public purposes all or any portion of the Site, except to the extent permitted above. You may not use or otherwise export or re-export the Site or any portion thereof, the Content or any software available on or through the Site in violation of the export control laws and regulations of the United States of America. Any unauthorized use of the Site or its Content is expressly prohibited.
The Services are licensed for Customer's internal use only and subject to any restrictions set forth in the Order. Customer will not provide Information, or other Services to others, whether directly in any media or indirectly through incorporation in a database, marketing list, report or otherwise, or use or permit the use of Information to generate any statistical or other information that is or will be provided to third parties (including as the basis for providing recommendations to others); use or permit the use of Information to prepare any comparison to other information databases that is or will be provided to third parties.
As you can see, if you've purchased information from one of these third parties, and have exported or plan to export it to Jigsaw, you are clearly violating their license agreement(s). For these third parties, the natural next step is legal proceedings. It remains to be seen if it's against Salesforce.com, their clients, or both.
My recommendation is to go back and re-read the applicable license agreements - your legal obligations - if you've purchased data from a third party anytime in the last few years. And then, be very careful to document what you export to Jigsaw, if anything.
Better yet, just don't do it.
The Lure of Free
by Todd Knutson | published on March 17, 2011
What a great sales pitch: take your in-house prospecting list, upload it to a crowdsourced-based website like Jigsaw or NetProspex, and then download an equal number of "clean" contacts - for free.
I can hear you thinking about it..."I can have twice as many contacts with just a couple of clicks of my mouse." It sounds too good to be true!
Before you take the plunge, however, I suggest you think through a few important questions:
- What will you upload? Will you upload:
- Current clients?
- Networking contacts?
- Friends of the firm?
- Contacts you've painstakingly found on your own?
- Lists you've acquired from 3rd party vendors?
- Has your management team thought through the consequences of sharing this information with the world? Once you upload it, it's gone and can't be retrieved or taken back later. Do you really want your valuable contacts in the hands of your competitors?
- If you want to upload a list you've acquired, are you legally allowed to do so? Have you reviewed "the fine print" - license agreement - from the list provider? Most, if not all, restrict you from sharing data with anyone outside your firm. Other providers allow you "single-use"; if you share you are clearly violating their agreement.
- What will you get in return? We've heard many stories about people uploading their old, out-of-date information, with the hope of exchanging it for new, clean information. Think about this for a minute: if you (and a few hundred or thousand people) upload their garbage, what are you going to get in return?
We at The List have heard so many stories about inaccurate information that we recently decided to do a test on 2,500 contacts that we purchased from one of the two providers whose logos appear above. We called every contact we received, and tabulated every duplicate contact, contacts no longer with the company, incorrect titles, incorrect gender, and contacts listed as being in the U.S. but actually located in another country.
In all, we found that 71% of the information was in some way incorrect.
The flip side is that 29% of the contacts were correct (725 contacts). But, that means if we'd exchanged 2,500 contacts one-for-one, we'd have only recieved 725 in return!
So, my recommendation is to consider a data-exchange with eyes wide open. If you're okay receiving some good titles and many wrong ones; if you're okay giving away your clients, friends of the firm, etc.; if you're okay risking legal liability, then this type of service is perfect for you.
Sparkfly personalizes offers to influence shopper behavior and drive maximum margins
by Todd Knutson | published on July 14, 2010
One of the "if only we could" wishes of B2C Chief Marketing Offers is delivering highly personalized, one-to-one offers to customers - offers that result in increased brand loyalty and higher profit margins. I've come across a company that now delivers on that wish.
This is a way for your advertising agency to bring new technology and significant value to your current clients.
Here are some of the technological innovations now taking place in the sales promotion industry:
- Personalization is now possible in real-time - while customers are present in-store.
- Retailers are focused on customer loyalty and retention more than ever before.
- Personalization tools and processes are being integrated at the Point of Sale (POS).
- Post-promotion analysis can now be done in hours, not months.
Technologies that integrate real-time promotions into the POS deliver:
- Much better customer targeting
- Much higher redemption
- Tighter segmentation
- Greater market share
- Reduced traditional media spend
- Revenue gains
According to a white paper published by Retail TouchPoints,
The new paradigm makes possible a 1:1 relationship between seller and buyer that was inconceivable a few short years ago.
Besides new technology, what makes all this possible is that "the consumer is absolutely willing to sign up for personalized loyalty and rewards programs on the Web", says Sahir Anand of Aberdeen Group.
According to Retail TouchPoints, Sparkfly has "emerged as a leader in the transformation of existing POS systems, smarter CRM data integration, and a vastly improved consumer experience."
Sparkfly CEO Catherine Tabor adds this tantalizing summary of her company's solution:
Imagine a world where you know exactly which of your products an individual consumer is purchasing; when and where they're purchasing; and based on that behavioral purchase history, you can then communicate a very tailored and personalized offer to the individual consumer that will drive them back into the store, the restaurant, or to your product, at no incremental cost.
Without mentioning the Fortune 100 companies that Sparkly is now working with, after visiting the company's offices and seeing their clients' results, this may be a technology you want your clients to implement. It can and will benefit them, their customers, and further solidify your relationship.
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.
Aviod the pitfalls
by Todd Knutson | published on May 27, 2010
My prior post details six building blocks to create an effective mentoring program to help build new business bench strength. As not every mentoring relationship is a good one, prior to establishing a program it's important to understand how it can go sour.
If we assume that 'knowledge is power', hopefully you'll either avoid these pitfalls altogether or at least recognize them before they become a problem.
Five ways mentoring relationships can go wrong
Drs. Dawn Chandler and Lillian Eby detail ways to establish an effective mentoring program in a May 24, 2010 Wall Street Journal report:
- Oil and water. The more the protege and mentor have in common, the greater the likelihood of a successful relationship. Example of a bad fit: a mentor who works long hours, and a protege who likes to leave the office by 5:00 pm.
- Neglect of protege. If a mentor is too busy or too preoccupied, a protege can feel neglected. "Mentors must show an active interest and act in a positive way to advance their (protege's) career and personal learning."
- Mentors who manipulate. The key to avoiding manipulation is to never have the protege's mentor also be their supervisor. There are three types of manipulation:
- Tyranny: the mentor manages by intimidation. For example, a mentor threatens to demote a protege unless the protege pulls an all-nighter to fix a problem that the mentor caused.
- Inappropriate delegation: the mentor has the protege do work that the mentor should be doing; or, the mentor withholds assignments to keep the protege from getting ahead.
- Politicking: the mentor sabotages the protege's work or takes undue credit for work the protege performs well. Mentors may also criticize their proteges behind their backs, blame them for mistakes they made themselves, or steal their protege's ideas.
- Sabotage against mentor. When things go sour, a protege may try to get back at their mentor for a real or perceived injustice - in other words, revenge. However, "The reason may have been sub-par performance. But rather than take personal responsibility, some proteges blame the mentor for not providing adequate support."
- Jealous protege. Imagine two long-time employees who have worked and competed against each other for year: one is "promoted and becomes responsible for the development of his or her former peer." It's easy to see how this can become a problem.
All of these potential pitfalls can be avoided through the set-up and management process described in the prior post. Most importantly, avoid making a supervisor the mentor of one of their employees.
Set it up right to begin with
by Todd Knutson | published on May 25, 2010
One of the ways to develop new business bench strength is through a well set-up mentoring program. A protege can learn quickly from a mentor with broad and deep knoweldge of the ad agency. The mentor will benefit from the teaching process and may enhance their career as their protege advances.
Drs. Dawn Chandler and Lillian Eby detail ways to establish an effective mentoring program in a May 24, 2010 Wall Street Journal report.
Six building blocks for an effective mentoring program.
- Give it structure. Formalize goals, expectations, training, feedback, the conflict resolution process, and how to handle the end of the relationship ahead of time. Involve HR.
- Recruit carefully. "Try to match mentors and proteges who have things in common, as those relationships are more likely to succeed."
- Training and orientation. Set expectations for how often to meet and what each side is looking for. Teach proteges how to accept candid feedback from mentors; the importance of trust and effective communication skills; discuss danger signs and dangerous patterns of behavior; and, teach conflict-management skills.
- What does success look like? Each side needs to understand and communicate what they want out of the relationship, and - critically important - "what will be required to make the collaboration worthwhile. Then they should either commit wholeheartedly or opt out."
- Feedback. Mentors may give appraisals to their protege's manager to help accelerate their growth. Note: if there are problems to report, involve HR.
- Prepare for the end. Every mentoring relationship comes to an end, so talk about the end in advance and plan for it.
In my next post, learn about the pitfalls of mentoring from Drs. Chandler and Eby.
Predicted to be a game-changer
by Todd Knutson | published on March 09, 2010
The editor of Wired magazine, last week at the 4As Transformation 2010 conference, predicted that tablet computers will replace laptops. He also predicted a new era for the print publishing industry. My question, "How might tablets impact new business?"
First, some of his other predictions on how things will change:
- Tablets are going to be very personal devices: you're going to want to cradle it, lean back and interact with it.
- It's going to be a rich media device: think of it as a large "app platform".
- Look to the success of the Kindle as a predictor of the future, with a multiplier effect on usage once full color and connectivity are widely available.
- We will be interacting with applications living in The Cloud, which means we'll individually need less computing power than we do using laptops today.
For advertisers and ad agencies:
- A higher degree of interactivity with ads than ever before.
- New software will measure everything, making it the most measurable medium available.
- Measurement will be able to take place when users are online and offline.
- The interactive nature of the tablet is going to allow consumers to play, touch and roam through content and ads - seamlessly.
Tablets will become a new presentation platform, offering the attraction of print and digital interactivity and measurement.
So how might tablets impact new business? Here are some wild guesses:
- You may travel with your phone and your tablet, but no laptop.
- You might deliver a presentation on your tablet, in portrait or landscape, or both.
- Presentations might allow prospective or current clients to envision a campaign in a way that current digital capabilities and interactivity don't.
- Might apps be developed to provide innovative ways for clients to find and experience potential agency partners?
- Your agency's 360-degree digital presence will become even more important and easily accessible.
I'm sure I haven't even scratched the surface of the changes that are coming, and would love to hear your thoughts on this new medium. Regardless, I think tablets will offer a host of opportunities for innovation with current clients, as well as in your new business efforts. This should be an exciting couple of years as we all learn about and experiment with this new medium.
How hard are you willing to work, and for how long?
by Todd Knutson | published on January 22, 2010
Most ad agency new business people are competitive, and want to be the very best they can be. What separates the average from the great? The experts from the "wannabes"? I was struck by a section of Outliers, by Malcolm Gladwell, that provides a very simple answer.
Gladwell relates a study by psychologist K. Anders Ericsson and two colleagues at Berlin's Academy of Music. In the study, the school's violinists were divided into three groups: those who were stars; those who were good; and, those who were unlikely to ever play professionally.They were all asked the same question:
Over the course of your entire career...how many hours have you practiced?
What the researchers found is that everyone started off playing at about the same age - five or six years old. They all practiced about the same amount: two to three hours a week. But after about three years of study, those who ended up being best in their class started to increase the amount of practice time: "six hours a week by age nine, eight hours a week by age twelve, sixteen hours a week by age fourteen, and up and up until by the age of twenty, they were practicing - that is, purposely and single-mindedly playing their instruments with the intent to get better - well over thirty hours a week."
In fact, by the age of twenty, the elite performers had each totaled ten thousand hours hours of practice.
Gladwell goes on to say that the researchers couldn't find any "naturals" who were able to perform at a high level with little effort. What they found, instead, was that:
...the thing that distinguishes one performer from another is hard work. That's it. And what's more, the people at the very top don't work just harder or even much harder than everyone else. They work much, much harder.
He then reports that study after study has confirmed that 10,000 hours of practice is the qualifying line for world class talent - whether in music, sports, chess, or even to be a master criminal.
So, what does 10,000 hours of practice represent to a new business person? Let's say you work 40 hours a week and work forty-nine weeks a year. Ten thousand hours is equivalent to:
- More than 5 years of dedicated, focused effort at improving your skills - assuming you work at it full time.
- More than 10 years of dedicated effort if you work at it half-time.
- And, if you're like many agency principals who dabble at it for five hours a week: it will take you 41 years to master new business.
This should be sobering. If your agency doesn't have a full-time new business person, and a team of people who practice really hard at their craft, can you ever (realistically) hope to be really, really good at new business?
Or, if you're younger or relatively new to the new business game, are your expectations realistically set? Are you willing to work really hard, full-time, for at least five years before claiming to be good at new business?
These findings resonate with me - as a still-competitive athlete and a business person with enough years in the seat to recognize that knowledge really does comes from practice and experience.
It takes a lot of hard work, making mistakes and overcoming them - over many years - to be good at something. You've got to be in it for the long term, with a desire - and a serious commitment - to be the best you can be.