Do You Have An Effective New Business Plan?

July 28, 2009

 Effective new bus

 

Does your new business plan read just like every other ad agencies’’? Is it agency versus client focused?  Lacking any glimmer of business development innovation? Void of any differentiation and full of the same old service offerings and descriptions?

 If all or any of the above sounds familiar, your agency is probably in desperate need of a more effective new business plan!

 One of the most common failures of a typical new business plan is the assumption that all new business is the same – no matter where it comes from, or how it comes into the agency.

Ideally your plan should break new business down into at least three different categories or sources. The reason being, that each source has different dynamics, objectives and success rates. Each source also requires a fundamentally different approach and in most instances, different resources to adequately support them.

 Here is a brief outline of the three fundamental sources:

 Organic Growth. This source is all about educating your client service teams to be problem solvers. They should be constantly looking for every opportunity to help their client solve their business and marketing challenges. Teams focused on organic growth also need tools to help them succeed. Tools that help them engage the client and find actionable insights at the same time.

 New Business Prospecting.  This source is all about generating leads and filling a pipeline full of them. It requires keen targeting and segmentation skills. Custom research against each of the key target categories, which will help identify compelling insights to lead with when approaching the prospect. The skills to set up and deliver compelling initial client meetings, and the tenacity to stay the distance, and ability to ultimately convert the lead.

 Competitive Pitching & Formal Reviews.  For this source, relationships with the pitch consultants are of paramount importance. While they do not get all of the pitches by any means, the consultants still play a meaningful role. Pitching is all about understanding the process and the psychology related to each step. It’s about listening, discovery, storytelling and well executed theater. If that’s not enough to deal with, it’s also about the team and their performance on the day in that particular situation. Pitching is a real crap shoot no matter which way you look at it.

 All three of these sources require different resources and staffing, and have vastly different budget implications. They also materially impact your new business and agency growth plan, depending on the mix across all three of the sources.  

 Does your current plan take all of these variables into account?   

 

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Creative arrogance can both help win and lose business. There’s a fine line!

June 4, 2009

Creative arroganceThe creative mind never ceases to both amaze and inspire me. Their innate ability to see everything in such a unique way and to come up with creative ideas that so effectively build brands, engender customer loyalty and drive sales. In so many ways we as agencies would not be anywhere near as effective without them. 

This posting however, is a rant about the dark side of the creative psyche. When their incredible self esteem and undaunting belief in their talent takes them into the arrogance zone. I was recently exposed to such an episode and it ultimately cost the agency the business.

The agency received a new business pitch brief from one of the largest consumer brands in the world. This was their opportunity to make an impact, show the client what they were capable of, and earn their place on the clients agency roster. Not to mention that if they won the pitch, it would probably have been their second or third largest client!

Because this was a re-launch of a previous campaign the brief was very specific about what the client wanted and expected. They specified which of the previous assets they wanted to keep, as well as the media in which they felt it should be delivered. Not the perfect clean slate for the creative mind, but an incredible opportunity none the less.

During the early days of developing the creative strategy the team started to veer sharply away from the clients briefing – disregarding many of the suggested guidelines and expectations contained within. I reinforced the need to go back and address the brief with the initial concepts, and then once that was achieved we could share an alternative strategy – one that the agency believed was the correct way to approach it.

The response from the team was arrogant to say the least, and sheer stupidity from a business perspective. In essence their response was:

We think that most clients are stupid and have no idea what they really need. We as an agency will not present work that supports an approach that we don’t agree with. We are only going to present work against the strategy we feel is right and ignore the client’s guidelines.”

To make a long story short. The agency lost the pitch. Client feedback was that work did not address the brief, was confusing, did not appear to support their go to market strategy, nor did it reflect the personality of the brand. No surprise given the circumstances!

The agency team response, wait for it…..”The client is just not very sophisticated and did not ‘get’ the work”. I guess sometimes agencies just cannot get out of their own way.


Existing clients, the cornerstone of growing a profitable advertising agency

December 18, 2008

MoneyTree2There is a way to deliver significant new revenue growth at a fraction of the cost of going after new client revenue.

When you enthusiastically sit down to develop your agency growth plan for the year, do you spend as much time talking about existing clients as you do new business development? Probably not as often as you should!

The analysts who cover the public agency holding companies know just how important existing clients are to growth of a successful and profitable agency. Not only do they look at recurring revenue but also at what level of organic growth did the agency deliver from those existing clients. And should they not adequately deliver, they penalize the holding company accordingly.

It is impossible to grow and be profitable without a stable client base that is also delivering increased revenue on an annual basis. Without it you just do not have the intrinsics to support a robust new business strategy. Yes in a few words, existing clients help you fund new business strain. Without it you need generous investors that are not concerned about returns.

Having said this, one of the major issues most agency principals face today is the fact that many of the key client service executives are accomplished farmers and poor hunters.

Agencies do a great job servicing the clients but are less skilled at identifying and growing new opportunities.

The result can be summed up in a client comment like this:

“Most agencies…. do not listen, do not seem to care about our business, lack creativity, get stale quickly and in general are not moving as fast as consumers and technology”. (Large beverage client)

More so than ever before our clients are looking to us to not only help them grow and be successful, but in many instances just survive the current economic firestorm. They are looking for new ideas and new approaches but they want to know that the accompanying risk is small and that you have done your homework. In my experience, what you do not plan against and measure does not get done. Every year we plug in a number for “Organic New Business Growth” and just hope that it happens.

You may have already found out the hard way but that’s just not going to cut it. If you are serious about delivering profitable organic revenue growth then I recommend that you:

Create an organic new business strategy for all key clients from which you have identified possible growth. This should include elements like;

  • Organogram of the company, including all divisions, key leaders with responsibilities and products etc.
  • Marketing/Advertising budgets, target markets, channels etc
  • Current agency relationships, key contacts both agency/client plus any legacy relationships etc.
  • Company performance status, competitive environment, key issues etc
  • Referral strategy using existing client’s contacts.
  • Assignment of agency responsibilities’ by person, action and time.
  • Monthly client team meetings to review progress.

An organic new business growth strategy will deliver significant new revenue growth, at a fraction of the cost of going after new client revenue.