There are some pervasive misunderstandings about agency new business which we regularly encounter in the course of our work. Here, I put together a list of five of the most common ones. Is your agency holding on to any of these dated notions, even though you (probably) know better?
#1. Agency New Business is Not Sales
It is. Sure, we can split hairs about the nuances between business development, sales, and new business, but we are basically talking about the same thing. “Sales” is shorter; it fits better in blog headlines, email subject lines, and AdWords headers. But if we use the “sales” language instead of “new business,” agencies will mostly assume we aren’t talking to or about them.
When they hear “sales,” it’s as if advertising professionals envision some thirsty hustler selling used cars in a bell bottom polyester suit. But if we talk about marketing, the first thing that comes to mind is not the worst possible category example, like spam emails from a car dealership where you test drove a car in 2001. I wrote a whole blog about the advertising industry’s aversion to the word “sales.” Sure, sales can be horribly executed, but it can also be done very well. The benefit to acknowledging this quirk of semantics is that it opens the door to information and training that can help your “business development” and “agency new business” people get better at selling (a.k.a. “growing your agency”). With sales training.
#2. More Pitches = More New Business
Pitching is a game of strategy, not odds. You can’t win more new business by chasing every single opportunity to pitch that you can find. Only 30% of agencies indicated they won greater than 60% of their pitches in a report Hubspot published last year. Most agencies were winning 20-60% of their pitches. With the amount of time and effort that goes into a pitch, that is not a sustainable way of generating new business.
Marketing research consultant Cubeyou has estimated that it takes 150 hours just to respond to a single RFP, at a cost of $15-20,000 each. They also found the typical agency sales funnel has a churn rate of 52% between RFP and final pitch. The total agency cost for the final pitch, according to Cubeyou, averages around $45,000. You can’t beat these numbers without a strategy.
Instead of focusing on the pitch itself, and before you invest tens of thousands of dollars worth of work into it, first be sure that you have done these two important sales tasks:
- You have defined your agency’s target clients; who your most profitable, best clients are and aren’t.
- You have articulated a qualifying process, and are using it.
Do not proceed to waste time on RFPs or pitches until you have qualified your prospect. I laid out some questions you should be asking before you respond to an RFP in this post.
#3. More is Better When it Comes to Services
Like other common myths on my list, I think this one is fairly well known. And yet, positioning still hasn’t changed (for many agencies); it seems people just aren’t ready to believe it. A simple Google search reveals the hundreds of agencies that still claim to specialize in lists on lists on lists of services. To be clear, it's not enough to simply say you specialize in something. Rather, you have to identify areas of specialization that can be supported by your work and experience. And then deliberately grow new business with clients who are consistent with the area/s of specialization that you want to project for future business.
I want to point out that bigger is also not better when it comes to either the size of your agency or the size of the client. None of that necessarily influences the quality of the work, the relationship, or the profitability of the account. Maybe it’s human nature to think in those terms, or maybe it’s part of the American cultural “supersize me” phenomenon, but resist the temptation. More is not more. Bigger is not more. What really matters when it comes to new business is sales process and strategy. Find the prospects who will be interested in what you have to offer, be able to demonstrate it, and have the sales skills necessary to close.
#4. More Leads = More New Business
And now…. more about more not being more. Some agency lead generation services capitalize on the perception that more leads are better. It pacifies agency owners for a while; it makes them feel like “things are happening,” and they are on the path to ROI. And months later, they are explaining to me how they paid all this money to another service for a bunch of crap leads and lots of wasted time in meetings with prospects who weren’t even qualified.
When you understand the sales process and can clearly identify your ideal clients, then you will realize that one or two of the right leads are infinitely more valuable than 36 “leads” that aren’t going to amount to anything but wasted resources. I suggest — counterintuitive as it may seem — that it is more worthwhile to focus on questions about process (how are these leads being selected, why are they being targeted, what is the approach, how does this connect to my ROI?) versus speed and quantity (how many leads can you get me by next week?). If that is your priority, you just may get what you ask for...and it’s almost certainly not what you need.
Focus on leads that can help your business grow — ones more likely to result in a closed deal, ones your agency is more likely to retain, ones more likely to be profitable, and ones which make sense to add to your repertoire for future business.
#5. Agency New Business Can be Solved by [ _____ ]
Marketers are a creative lot, and we’ve already established that “sales” is regarded as a four-letter word. The door has been left wide open for all sorts of creative, non-salesy solutions to generate sales new business. Unfortunately, none of them are very effective in that respect. I’ll run down a few of them here:
- Blogging — has never and will never actually close a deal...these days you are lucky if people even have time to read your blog. There are valid reasons to blog, but in 2017, blogging should not be your primary method of trying to generate new leads.
- Social Media — not a magical solution for sales or lead generation. As far as sales are concerned, it’s best use is as another venue to connect with people, not especially unlike other venues both on and offline. However, most people use social networks to spew out streams of posts, which is not very effective for lead generation or new business, and is not a required step to make actual connections on those channels.
- Making Tons of Friends — popularity isn’t the same thing as sales ability. It can help to have a lot of connections, and it can help to have great communication skills and charisma. But none of those things mean you can sell. You don’t have to an extrovert or even likable to be good at selling. And trust me, the people you need to speak with at many of the big brands you may aspire to pitch to aren’t interested in being BFFs with the dozens of salespeople who reach out to them every day. Even the super cool ones. More likely, they will regard your attempts to befriend them early in your sales process as amateurish.
- Incredible Presentation Skills — sure, great presentation skills can only help you in pitches; however, let’s not confuse what they can do. Obviously, presentations skills will not compensate for underwhelming creative. But more importantly, you may have lost the pitch before you even walked in the room. If you didn’t do your due diligence on the client, the opportunity, and your odds of getting it before you got there, nothing else matters.
- More Talking — is actually a hallmark of poor sales ability. Sometimes people (incorrectly) think they are engaging in the “art of persuasion” when they are doing too much talking. Lots of talking means lots of not listening, lots of not problem-solving, and lots of wasting your prospect’s time and wearing on their nerves. I have written about how less talking can lead to more sales here.
In short, there is no magic bullet to crack the code of agency new business other than having a solid sales strategy, using a defined sales process, doing the sales activities that will lead to meetings with your defined targets, and having the skills to close.
Need a boost to get your Agency New Business on track? Explore outsourcing:
- 9 Reasons Why Your Agency Isn’t Getting New Business
- If You Can’t Sell, How Can Your Agency Close New Business?
- 6 Reasons Why Your Agency Needs a Sales Process Right Now
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