2008 survey forecasts a rough 2009 for agency new business efforts

If you operate an advertising agency or a public relations firm, the following should be as unexpected as the news that we were in a recession: business development is getting tougher and 2009 looks to be even more of a challenge than 2008.

I can hear the groans already.

Thanks to Michael Gass and his 2008 New Business Survey (as reported on the New Business Hunter blog), we’re able to identify three key factors making ‘09 look more daunting than ever:

1. Prospects are harder than ever to find.  According to Gass’s survey, relying solely on referrals and networking won’t cut it any more.  Of course, you shouldn’t stop pursuing these channels for leads - but you should open additional ones.  Here are some options:

• Re-evaluate the way you stimulate referrals from existing accounts and other “allies” of your agency.  Do you have a formalized system for generating as many high-quality leads as possible?  A little strategic thought could go a long way here.
• Take an inventory of what you and your agency do (and have done) well.  Draw a profile of “perfect” accounts who need those services and then get to work doing the research necessary to identify the media, trade associations and other key influencers to serve a similar profile.  By studying those non-competitive sources, you’ll be able to identify prospects worth calling upon.
• Invest in services like AgencyFinder who provide objective, fact-based search-and-selection services to clients to help them find agencies.  For starters, you may want to subscribe to the AgencyFinder PitchCast RSS feed or newsletter to see what kinds of searches they’re running.  In order to participate in those reviews, you’ll need to register and create a profile.  There’s a fee for the AgencyFinder service (because the service is free to clients), so make sure you check out all the details first.

2. Nobody is committed to new business at the agency.  Gass points out that just over half of the agencies surveyed had a full-time, new business director.  Our experience is that new business directors are often burdened with additional “billable” duties in order to help cost-justify their position.  Sometimes, their responsibilities are shifted to other senior managers and/or an admin person to create a “committee” who eventually becomes responsible for new business.

The cold, hard truth of the matter is summed up by Gass very effectively: “If “everyone” is responsible for new business, no one will be.”

Here’s what you need to do:

• If you’re the owner/manager of an agency or in a position of leadership - you make the call: either you are the “new business guy” or you’re responsible for finding one.  In either case, “new business guy” needs to do new business 30-40 hours a week.  No lie.  It’s a full-time job.
• Concerned the result won’t justify the expense?  Look at it this way, if you expand your new business channels as we’ve outlined in point number one and then dedicate two hours a day to making productive, strategic cold calls (check out Jacques Werth’s High Probability Selling system), you should be able to generate the increase in prospect pitches your firm needs to continue growing in a down economy.
• Promote, promote, promote.  You need to get your agency’s message and portfolio circulating outside the four walls of your office.  Show it off.  Share it.  Pimp it.  Do what it takes to get it noticed and road-tested.  Feedback on your book and your pitch – even if the feedback is negative – will just make you stronger the next time you get in front of a prospect.
• Remember to talk numbers in your meeting.  Don’t be coy.  In this economy, no one can afford to waste time or money and avoiding a discussion of budgets or “investments in your solution” wastes both.  Don’t kill yourself with your prospect and your agency staff by bringing back an opportunity created by setting unrealistic expectations on the client side only to face pushback from your in-house team for a lack of information, perceived lack of budget and overall ignorance of the marketing/advertising/publc relations process.  (This is why new business work must be headed by either the agency owner/manager or a senior level person who has her/his act together.)

3. Pitch more.  Sounds simple enough, doesn’t it?  But as Gass points out in his survey, agencies are winning less than half the pitches they make and those are to pre-qualified, “warm leads” generated through networking and personal referrals.  As times get tough, the successful agency is going to have to be more agressive pitching ideas to new accounts. 

Here are some things we do to increase the number of pitches and not neccessarily see a commensurate amount of increased work inside the firm as a result:

• Through your research, try to find prospects who are not conducting a formal agency review and then get an opportunity to pitch a “piece” of the account - this means you can bypass the RFP process and sidestep the possibility of spec creative (as well as a lengthy decision-making process that could be subject to shifts and delays due to economic challenges).
• Remember that as hard as the economy hits you, it’s hitting your competitors too.  Keep an eye on personnel changes and take advantage of opportunities that might open up to step into the breach created by the loss of a creative team or leading account person on a specific account.  Remember, creative sizzle might win accounts – but it’s performance and personality (chemistry) that keeps the account with the agency.  Dramatic or sudden shifts in personnel can create a rift in what was once a solid agency-client relationship.
• Pitch on a more conceptual level and use speed to your advantage.  Sometimes getting some rough ideas back to the prospect (in the form of rough sketches or a written description) within 24-48 hours of a meeting is all it takes to create an opportunity in the form of a first project.
• Ask a prospect what the largest problem neither he nor his agency have the time or resources to address is and then pitch a solution to that.  Create an opportunity where no one else is looking and you can open a door no one even knew was there.

Good luck.  Let us know how it goes.