New Business: No Magic
Let's start with a few agency facts of life.
What exactly are the rules of this game anyway?
One more fact: There aren't any uninfringeable rules. That's why it's essential you get as many things arranged in your favor as possible. The place to start is to eliminate being a victim of circumstance.
Choose your clients before they choose you
You'll dramatically improve your chances for success - and make your agency healthier and your life easier in the long run - by ruthlessly qualifying each prospect at the earliest possible stage of the romance.
Too often agencies, like people, end up with exactly the wrong partner. Many firms go astray because they're temporarily blinded in much the way a lovesick teenager loses touch with reality, except in our world the notion of additional billing is what bedazzles. Sound judgment flies out the window and the chase itself becomes the goal, taking on a life of its own.
You can avoid much unnecessary expense and heartbreak pursuing only those prospects which are right for your agency. You'll need a cool head and a systematic objective approach we call Client Profiling.
Building a Client Profile
Do you know exactly what the proper client is for your agency?
To find out, create a Client Profile by listing the ideal client's attributes. Down the left column of a piece of paper write all the positives of your most loved account. What exactly makes it so great? Down the right column list the issues which make your more difficult clients undesirable. Be brutally frank - if you're going to enjoy terrific business relationships you've got to know exactly what you're looking for.
Keep your Client Profile handy and always reread it before chasing after a prospect. You must know what works and what doesn't if you're gong to stock your agency with non-toxic new clients.
Otherwise it's too easy to get seduced when a potential new customer calls. And that's exactly the right word, isn't it? Seduced. You're flattered, excited, and maybe not thinking all that clearly when an out-of-the-blue prospect makes contact. Knowing exactly what you want is the best way to avoid making a decision based solely on emotions and ego.
Let's get more specific. Before you start buying too many meals, doing spec creative, or taking them to New York for a weekend of shows, you need to clearly understand a prospect's:
Level of Need
How urgently does the candidate need your services? How serious are they?
Sometimes prospects casually shop around because they like being schmoozed and fawned over. You know the type. Can you afford to spend a lot of time and money on these folks?
On the other hand, some situations require a long courtship. Understand up front what kind of need the prospect has. You want serious players, clients with a genuine requirement for your services now.
This is not the time to be shy! Ask what their specific intentions and needs are. They won't be offended when you want to hear their expectations - you'll flatter them and in the process learn if they're live ones.
It's more important at this early stage to qualify them than for them to qualify you.
Type of Need
Precisely what do they need?
Do they want a new AOR (agency of record) or just a fresh idea for a small project? Is this a big rebranding push with ongoing work? Or do they just want an invitation designed for an open house and that's it. You gotta' know!
This is serious stuff and often where fatal delusions begin. Steel yourself to make an executive decision based on how well they fit your Client Profile template.
Here's an example. If someone wants dealer communication packages for the aftermarket truck parts field but your strengths are consumer radio and TV, it might be prudent to decline gracefully. Don't be like the bunny rabbit who excelled at scampering but suddenly tried to swim like a frog - it isn't going to be easy and it could be dangerous.
Stay with what you do well. Notice I didn't say want to do well. Agencies get in a lot of trouble pretending they're good at something they have no experience in. Someone get a towel for that rabbit please.
The best reason to understand the prospect's real need is so you'll know whether you'll make or lose money servicing them.
Rate them high if they need something you normally provide with healthy margins. If it's something you could do but usually don't, rate them lower. Sure, there may be occasions when it would pay to create specialized services if they come aboard, but you'll make more profit faster with less heartburn if you're already equipped to profitably do the kind of work they require.
Obvious? Of course. But when we get called to diagnose misaligned relationships and inquire if the agency considered these elementary issues, there's often a lot of foot-shuffling and finger-pointing.
Type of Client Business
Years ago in a mid-Atlantic agency we landed a major regional grocery store account. Problem was the agency had a long list of corporate business and had never had a price-change-a-minute retail client. The rumor was we lost more money in the first 90 days on that one account than the entire agency generated the previous 6 months. We simply weren't able to pump out down 'n' dirty inserts, print, and radio that had to be changed daily. . . and still make a profit.
So the next question to answer before running after another logo for your client list is, Is this a business or market we really know?
You may be comfortable in banking or hospitality but not so at ease in automotive TBA, cosmetics, or packaged goods. . . even though these are desirable as you stretch to grow your experience base. Generally, if you don't have the experience and track record in a client's industry, it will cause problems later on.
Not saying here you shouldn't safari into new territory - agencies do that successfully all the time, but be prepared to spend a lot of money learning an industry and maybe even paying handsomely for ignorance (like the agency which won an ag account and in its first ad referred to livestock hide as "fur").
Always pause to reflect before jumping into water of uncertain depth.
Client Purchasing Power
Will they need supplemental oxygen when they get your bills?
What's important here is if they are accustomed to paying the kind of money you charge so your invoices aren't an unswallowable surprise.
Obviously those who can barely afford your fees are going to be troublesome - they'll flinch when they get your bills no matter how great the work is, questioning every charge, sending invoices back, and slowing up payment. Soon the relationship grows adversarial and begins to crumble.
This is an even bigger problem with a client that's never had a real agency before. Think twice about taking on a marketing virgin because training a greenhorn may drive you nuts and devastate margins. Let your competitor down the street pay the initiation dues.
And while we're on the subject of money, don't overlook who OKs the bills.
Always know where you are in the client food chain.
Will you be doing business with the decision maker - the person who signs the checks? Or does everything have to be reviewed two or three levels above your daily contact. Buying power and inside clout should rate high - lower your assessment of a potential account if there's a long chain of approvals for minor expenditures. All too often agencies enter potential client organizations way below the decision-making waterline.
You need to know and understand buying authority protocols up front so you can accurately calculate operating costs and service dynamics. The best advice here is have contact with the true decision makers from the get-go.
OK, managing the numbers is pretty much black and white, but there's a much more imprecise area to explore.
When an agency continually comes in second ("It was a tough decision but in the end we picked the other agency…"), we sometimes interview the client to uncover mistakes the runner-up may have inadvertently made. Guess what? There are very few categorical errors. Instead almost always we hear that the "chemistry" was wrong.
Save yourself a lot of trouble by asking early on, Are these our kind of folks?
You know "your" kind of people. But if you rationalize that if they spend what they say they will you can learn to LOVE these jerks, well, you could end up being cursed by getting exactly what you wish for.
Don't ignore the flashing lights and sirens shrieking in your head if you feel uncomfortable about the people who may become your next account. Those signals are part of an ancient process of threat alert designed to keep your backside out of the jaws of mammoths. Take heed!
Selecting the kind of accounts best suited for your firm is like buying clothes - know your size, the style you like, and the cost. And whenever possible choose a truly durable fabric.
Create and use a Client Profile and discuss with your executive group or new business team how the candidate client fits before you saddle up. Remember, you're always better off picking your clients than working only for the ones who pick you.
Joe Grant is President of Grant Consulting Associates - a firm focused on helping marketing agencies and service-oriented companies grow. Since 1992 he has helped dozens of mid-sized companies sharpen management team focus, improve client services, develop better new business approaches, intensify employee commitment and tighten organizational efficiency and profitability. He has personally interviewed over 1700 agency clients about their expectations, and is the author of Understanding and Protecting Agency/Client Relationships, in association with the American Association of Advertising Agencies. You can subscribe to his monthly e-newsletter - Grant's Client Brief - by visiting the website at www.joegrantconsulting.com or by calling Grant Consulting at (239) 394-8220.
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