For CEOs: Creating an Ad Agency New Business Plan (Step 2)
Build your plan
Creating an advertising agency new business plan is a step-by-step process. With the outline of ingredients necessary to create a new business plan provided in this post, you'll be able to make the decisions necessary to put your plan together in a matter of days or weeks.
Important note: Many "new business initiatives" are unsuccessful because management isn't fully committed to the effort. To avoid this common result, I encourage you to read the prior post (Step 1) and then "take a time out". Think about what it says. Discuss it with your management team. Together, determine if you have the collective will to change your agency's new business culture. Without this commitment, implementing the suggestions in this post will only guarantee mediocre success (at best) or failure (more likely).
Step 2: Build Your Plan
Before we begin, I'd like you to put yourself in the right mindset. Creating a new business plan is creating a marketing and sales plan for your agency. You know how to do this for your clients; now you need to do it for yourself. Perhaps rename your new business plan 'New Business, Inc.' - this might help you give it the client-oriented importance it deserves.
Who Are You; How Are You Different?
Every agency thinks they're unique, while clients think most agencies are alike. Everyone in your agency needs to know who you are, and how you're different. If you say, "We're a retail agency that delivers our big-box retail clients 15% annual year-over-year growth", you'll probably get a number of potential clients to meet with you pretty quickly. On the other hand if you say, "We're a full-service agency" and you only have 10 employees, there's going to be a disconnect.
What's your most effective approach?
Every agency needs to choose how they want to get noticed. What has worked best for you in the past, or how do you want to go about it in the future?
- Are you best when you do your own category research, and offer it as "bait" to a prospect?
- Are you most successful when you purchase research from 3rd parties and draw insights and conclusions from it?
- Or, are you best when you lead with your create work?
If you need help or are unsure about the most effective apporach, or the approach you're considering, you might ask an expert who works with agencies every day. People to consider include a friendly agency search consultant, consultants like Ignition Group, Robb High Consulting, Michael Gass, or Mirren Business Development, or one of the outsourcing companies like Linkergy or Catapult New Business.
Define Your Objectives
- How much new revenue do you want this year? Write it down.
- How much do you want to come from organic growth? From proactive new business? From passive new business (e.g. relationships with consultants, RFPs that "just show up")? Break down your revenue growth into these categories, and others if you have them.
- Now, turn your revenue growth numbers into a discreet number of wins by category. For example, how many clients do you need to land to hit your proactive new business number? Your revenue from review consultants or RFPs?
Turn Your Objectives Into Achievable Goals
Once you have your top-line numbers for each of your categories, determine how you're going to hit each of them.
- Proactive new business: using metrics from your recent past, create your sales funnel. This will show you how many prospects you need to target to have the meetings you need in order to win a new client. Extrapolate these numbers based on how many wins you want this year. These become your new business team's proactive sales goals, to which you will hold them accountable monthly, quarterly, and annually.
- Organic growth: using metrics from last year, determine the rate at which you win new business from current clients. Determine what you've done to achieve this growth. Ask yourself how you can do better this year. Assign revenue growth goals to each account team, communicate those goals to them, and incorporate them into their monthly, quarterly and annual goals, and hold them accountable to hit them.
- Passive new business: Your agency may have a "nurturing strategy" with various search consultants, or, "friends and family", among other groups that you keep in regular touch with. Set goals for each of these channels, communicate them to your new business team, and hold them accountable to hit them.
Note about accountability: we've all heard the expression, "What gets measured gets done". The great thing about this one is that it's true. If you don't know what you want to achieve, you won't achieve what you want. So, set goals ahead of time, and then make your team responsible to hit them.
Too many ad agency new business plans fail because the agency doesn't have a 100% dedicated, talented new business person who is regularly measured, and held accountable to the effort.
The challenge for many advertising agency CEOs is that dedication means the new business person can't work on client business, and won't be billable. I encourage you to look at this situation as you would one of your clients: do they have billable sales reps? Or, are those sales reps 100% dedicated to revenue generation? You know the answer to the question.
So, the decision you need to make is either:
- Will you appoint an internal person to be responsible for new business (if so, who?)?
- Will you hire someone from the outside?
- Or, will you outsource to a 3rd party expert, who will focus on proactive new business (only).
Whichever option you choose, your next step is to define the job description, how you're going to find them, and when you want them to start. Then, initiate the search. As an aside, if you're considering a recruiter, you might want to speak with Mirren Talent.
Target criteria and segmentation: Decide on the criteria you want to use to target prospective clients.
- Are there specific companies you plan to pursue?
- If not, what industries, company size (by revenue and/or media spend) are best for you?
- In what geographical area?
- What are the titles of the decision makers you're best talking to?
- Are there particular brands you want to work with?
- Or, are there particular brand demographics that are best - e.g. brands targeting seniors or Gen X?
Data: Once you know who you want to target, you need to choose a new business database that will provide what you need. Be sure that the one you choose provides everything you need. There are a range of services available at various price points, starting with "free" and going up from there.
One thing I regularly hear from clients is this: "You get what you pay for". So, think before you go for the lowest price.
Five or ten years ago, direct mail was useful as a branding vehicle. Today, it may take doing things a bit differently to get noticed. However you do it, think about what you can do yourself, as well the leverage you can get from others. For example, there are websites on which you can post your work, testimonials, clients (and much more), that will essentially market your agency to prospective clients at an affordable monthly cost (one example is Marketing Mine - full disclosure, this is a sister company to The List).
How do you want your agency to reach out to clients? For example, do you like the idea of someone making cold calls, or not? Decide, as a management team, what type of outreach you want to take place before you finalize the new business person's job description. Questions to consider include:
- Do you want them to make cold calls?
- Do they need to be an email expert?
- Will they network with search consultants?
- Will they interact with current clients to help drive organic growth?
- Do you want them to be a pitch specialist? (Are you willing to pay top dollar for this expertise?)
- Will they attend initial prospect meetings? If so, on their own or with someone else? Or, do you want them to stay focused on new business while others attend meetings?
- Or, do you plan to outsource your proactive outreach, and if so, what skills and responsibilities will be needed on the inside?
Once you define how you want your new business person or team to do outreach, you'll need to define the touch points they'll employ and goals you expect them to hit:
- If you use email, will you follow up with telephone calls? If so, what frequency do you expect? Do you want someone who sends a few targeted emails a day, or 50?
- If you're cold-calling, do you want someone to make 5 calls per day or 40? (Hint: not everyone who's comfortable making 5 a day will be able to consistently make 40.)
- What's your plan to use voicemail? Do you have a voicemail strategy?
- If networking is your preferred tactic, how do you plan to pursue it? How many connections do you expect per week, month and year?
- Or, perhaps you're best when you have a referral. How many referrals do you expect per week, month, year?
No matter your tactic(s), be sure that the person you appoint or hire is good at the approach you want them to use. If not, you'll experience a big disconnect and subsequent employee turnover.
Metrics and reporting
You also need to decide the following ahead of time:
- How are you going to measure the effectiveness of your efforts? What reports do you have to do so, or do you need to develop?
- Who's responsible to create them? Who's responsible to run them?
- Who will review them, and when? (I recommend at least monthly.)
As you think about metrics and reports, I encourage you to measure as many aspects of your new business performance as possible. Here are a few posts that may be of assistance: a simple call-tracking system; converting leads to opportunities; and, measuring your new business activity. There are quite a few others within this site. You might try using the search option on the home page. If you get stuck, don't hesitate to get in touch with me directly.
Filter Your Opportunities
What's your process going to be to review leads that you receive, as well as RFPs? Not every lead is a good one, and you probably don't want to pursue every RFP that comes in the door. Decide what you want to pursue ahead of time. Set the rules for your team so they know how you want them to respond when the moment arrives.
Here are three ways you might categorize opportunities:
- Core criteria: fits your pre-determined size, geography, category, discipline(s), etc.
- Strategic opportunity: Gives you the opportunity to move into a new category, geography, discipline, etc.
- Opportunistic: falls in your lap; represents something quick and easy to do; or, is a good source of cash.
When you've made your decisions about each of these new business plan ingredients, it's time to put your plan on paper. You now have a choice: do you want to create a document than sits on a shelf, or one that's a living, breathing guide to your agency's new business future? The former will probably become a binder and get distributed to key players throughout the agency, and end up on their bookshelf. The latter might be a one-page plan printed on colored paper that people bring with them to weekly new business meetings.
My favorite plan is the short version - overall objectives, specific numerical goals and tactics on one page. How you go about pursing outreach, marketing, job description(s), opportunity categories, etc. might become your "standard operating procedures". They should be written down, printed and distributed, but the team won't have to refer to them very often (once they understand them). Your metrics/reports will be a work in progress; as long as they're reviewed weekly or monthly, they'll become part of how you do business in no time at all.
A final thought...
The Little Things Really Matter
We sometimes forget the little things that make a big impact on a prospective client. Things like hand-written notes and welcome gifts. For best results, these should be thought-through ahead of time, included in your new business plan and made part of your agency culture. Little things like those noted in these posts, as well as the ideas you and your team come up with, are an easy way to differentiate your agency.