New Business Intel

» New Promotions Technology Builds 1:1 Relationships, Increases Revenue, Organic Growth

Sparkfly personalizes offers to influence shopper behavior and drive maximum margins

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.

» Save Time and $ Using Jigsaw-like Services for Ad Agency New Business?

Look before you leap, and measure carefully

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:

Pros

• Wide variety of contacts
• Inexpensive
• Exchange out-of-date contacts with another
• No long-term contract

Cons

• No industry focus - you'll sort through lots of companies and titles to find good prospects
• Inaccuracy
• 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.

» Procurement Snapshot for Ad Agency New Business

What procurement does and why it exists - from the client's perspective

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:

• Rigorous
• Ethical
• Cross functional
• 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)
• Emerging
• 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!

» New Business Mentoring To Build Agency Bench Strength: Part II

Aviod the pitfalls

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:

1. 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.
2. 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.
3. 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.

» New Business Mentoring To Build Agency Bench Strength: Part I

Set it up right to begin with

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.

» Tablets: A New Era for Clients and New Business?

Predicted to be a game-changer

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.

» What It Takes to be a World Class Ad Agency New Business Person

How hard are you willing to work, and for how long?

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.

» A Tablet to Cure Magazine Ad Sales Blues?

Wonderfactory prototype is an exciting development

The Wonderfactory, in collaboration with Time, Inc., helped design the prototype of what Sports Illustrated magazine might look like on a tablet computer.

Revealed on December 2nd, this innovation could allow magazines and other periodicals to charge for content on tablet computers, and give advertisers data on who’s seeing their ads.

Stephanie Clifford of the New York Times broke the story. A few highlights:

• Apple, HP and other computer manufacturers are expected to offer tablet computers sometime next year.
• "The general guess is they’ll be like big iPhones, with interactive touch-screens. The larger size makes it feasible to put a magazine page on a tablet."
• The functionality is anticipated to let readers interact with the magazine stories, ads, and content, watch videos, see additional photos, get live updates, and particpate with what's going on in the story.
• Readers will also be able to email, print, save, and share stories and content with friends via social media channels.

From an ad sales perspective, this should create opportunities for media departments across the country. It's anticipated that readers will be able to use the touch screen to interact with ads, view video clips, product comparisons, prices, and purchase directly from a story. In turn, this should open up a whole to way of thinking about ads that will lead to increased innovation.

From a new business perspective, you have to think that this type of take-it-with-you technology - a tablet that's bigger than your i-phone but much more portable than a Kindle - will open up a another vehicle for innovative apps and offerings. Ad agencies and other marketing services firms should be able to leverage innovative offerings to generate both organic growth and new business.

While I'm generally not an early-adopter, the thought of being able to do most of my "required reading" on a highly portable tablet computer that provides online interactivity, is really exciting.

» New Digital TV Service Can Help Generate New Business

Introducing Leap Media

Small and mid-size advertising agencies can now offer their clients Digital TV services. A low-cost, turn-key solution, which you can offer as your own, is available to drive new business.

Leap Media Group, founded by TV industry veterans, was created expressly for "smaller, and mid-size agencies looking to develop an interactive TV capability", reported Joe Mandese in MediaDailyNews at the end of September.

Mandese describes digital TV advertising as, "any ad unit on TV beyond the traditional commercial spot. Some examples include interactive TV spots, video on demand messaging, and program guide ads." (Full disclosure: Leap became a client of The List after the article was published, but we have no stake in their business.)

Says Leap co-founder Chris Pizzurro:

"Wouldn't you just love to have something on the TV set where the consumer can just press a button and enter your sweepstakes or make a request for more information?"

Leap offers agencies free planning, buying and executing interactive TV campaigns. Leap generates fees "directly from acquiring advertising inventory from cable and satellite operators and from other interactive TV platform providers", so agencies don't have to bear the cost.

When I read the article in MediaDailyNews, I immediately thought of ways that agencies can offer this service to help generate new business. First, you'll need to work out a deal with Leap so you can "white label" their service, i.e. brand it as your own. Next, your new business and account services staff will need to bone-up on digital TV: educate yourselves about what's going on, what the future holds, and what's in it for your clients.

Once you have the service in-house and fully understand it, here are three ways that offering a Digital TV capability may help you drive new business:

1. Include digital TV in prospect conversations. If you've done your homework (as described above) and fully understand what's in it for your prospect, ask them smart questions to reveal their potential interest in digital TV, and then match their need with your new capability.
2. Enhance your next pitch. Digital TV may provide some powerful benefits to those you're pitching, and this capability has the potential to differentiate you from the competition.
3. Generate organic growth. As a small to mid-size shop, many of your clients won't expect you to have this capability. This could be a new service to enhance an existing relationship, or perhaps even help you retain one that's looking for new ideas. For flat-fee clients, this represents a way to charge for an additional service.

Additional insight: Chris Pizzurro provided me some additional information about how consumers and digital TV are evolving: Video On Demand (VOD) and Digital Video Recorders (DVRs) are expected to penetrate 50% of U.S. households by 2011. Consumers with digital TVs now know that their TV remote can do more than just change the channel. For example, consumers use their program guides many times a night, and banner ads are appearing on the guides. Same for VOD, where consumer usage numbers are growing year-over-year. Consumers are exposed to :30 second ads, but fewer than on traditional TV, so many prefer it.

I hope some of you see this as an opportunity. If you pursue it, I'd love to hear how it goes.

» A Hint of New Business Team Conflict = No Win

Good chemistry means learning how to have difficult conversations to maintain harmony

You've seen it happen: two members of your team aren't getting along. You've tried to repair the damage, but everyone knows it's there. While everyone tries to cover it up in the pitch, it still shows. You don't win (instead, you come in "second"). The VP Marketing cites "chemistry" as what made them choose your competitor.

Hopefully, you hear "chemistry" as the reason why you lost.

Discord in a marketing services company is felt by everyone around those who are out of sorts. It's therefore critical that we all know how to skillfully and effectively diffuse and repair relationships.

As I was faced with one of these situations recently, I gravitated to a Harvard Business Publishing article by Peter Bregman called "The Martial Art of Difficult Conversations". Peter emphasizes the importance of really listening to those who are upset until you completely understand the issue.

He suggests Three Things to Do to Communicate Listening:

1. Ask questions. Ask open ended, exploratory questions, such as who, what, when, where, how, why, etc. These will clarify what the other person is saying and feeling. Stay away from leading questions and statements that pretended to be questions but won't fool anyone, like "You don't actually believe that, do you?"
2. Actually listen. Shut up and hear what the other person has to say. Avoid thinking about anything except what the other person is saying. Try to hear what they're NOT saying, but are implying: the desires, fears, and assumptions behind what they're saying.
3. Repeat and summarize. Recap what you heard, trying to use the same words they did, and check to be sure you understood them correctly. If you didn't get it, ask the other person to repeat what they said so you hear the whole thing again. What you really want to know is what you got wrong. Ask what you missed. Once they've told you, repeat that part again and ask them if you got it right this time.

This sounds easy, and like most things it's harder to do than it is to write or say. But it works, so it's worth the effort. If you try this approach, I think you'll find that you develop the habit of asking questions instead of jumping in and suggesting what should be done to fix the problem.

We all want to be heard. Once we know that we've been heard and understood, we're generally much more willing to compromise and find a solution that works for everyone involved.

For new business teams, getting back to a stable state of affairs is critical, since chemistry is a critical ingredient to winning new accounts.