Being exposed to a single large client is well-known as a fundamental mistake for agencies. I had a consulting client who spent a year executing a new corporate identity for a UK Building Society Bank. Within 4 weeks of it’s launch and roll-out nationwide, the outfit had been bought by Santander Bank and was renamed. There was no repeat business, they’d spent over 80% of their energies on one client for whom there was no prospect of any more work = end of agency. and lost jobs.

So what should a modern agency to do?

1. The best answer is to have a range of clients, none of whom are over 20% of your monthly billing. Try to create contracts that don’t all end in the same month so you have overlap and won’t be very short of work all at one period if several clients don’t renew or projects don’t lead to more work. And also try to get longer contracts – aim for a year if you can; 6 months minimum. In this way your underlying revenues don’t change much month to month and you can take some uncertainty risk out of the business.
2. The second thing is look to get new revenue streams. There are two schools of thought about whether agencies should make money selling things that are unrelated to their core expertise. Some think it’s a good way to diversify and others think it dilutes the core skills of a creative agency.

A bad example of new revenue streams

For a while in the UK TV shows were paid for by “advertiser funded programming” i.e. brands paying TV companies to make the show. This wasn’t sponsorship or advertising, it was for product placements and other benefits. Both TV production companies and advertising agencies tried to get into this game. But few succeeded. The reason is that the skills to negotiate broadcast programme contracts and assess brand ROI are rarely found in the same people with the same experience. Many agencies spent a lot of time paying staff to chase these deals which didn’t come off and so ended up costing the agency a lot for no return on their investment.

A good example of new revenue streams

There are good ways to earn revenues from ancillary associated products and services.

How to find appropriate services to resell. The best way to appraise them is to ask two questions:

“ Are these products or services very close to the agency core skill set?”

“Are we using these services to deliver campaigns for our clients?”

And thus many agencies resell software licenses for cloud services which they use themselves

• Project/campaign management (Basecamp)
• CRM (Salesforce, Highrise)
• Email sending (Aweber, Constant Contact, Feedblitz)
• Web Content Management Systems (Hubspot, Contegro)
• Website hosting / domain management (eUKHost, Network Solutions)

Read the rest of the #FutureAgency series by following the category in our sidebar

Next time we ask, Is it appropriate to mark up services sold on to clients?

The RFP must die.

Or at least the way the process has evolved in today’s marketing world should. On the surface, it seems innocuous. A company or organization issues an request for proposal (sometimes masked as a ‘request for quote’) to several agencies, consultants for firms. They sometimes include ridiculous assignments jammed into even more ridiculous time frames and even sometimes have the audacity for the responder to commence work on creative concepts and ideas that solve the prospective client’s communications problem.

Then the company collects the RFPs, steals the ideas and doesn’t even change the account from the agency they were working with.

If you work in advertising and this hasn’t happened to you, how’s day three on the job?

RFPs from government agencies have spiraled out of control to a level that’s beyond even discussing. I recently received an RFP from a government agency that was 58 pages in length and somewhere along page 29 mentioned they wanted ideas to activate around (and I quote), “so-called social media.”

While I resisted the urge to reply to the contact person with a loud and swift, “Go to hell,” I didn’t respond.

The Problem With RFPs

Agencies want new business. Clients know this and have learned over the years that agencies will jump through crazy hoops to get it. Clients want fresh ideas. Agencies know this and will sometimes undercut their own value by sharing some of those in an RFP or pitch for new business. Clients have learned over the years that there are more agencies in need of new business than there are great ideas, so they use the imbalance to their advantage.

The majority of RFPs, in fact all but one that I’ve ever seen, require creative concepts in order for the agency to be in consideration. The one that I saw that didn’t, I wrote for a client.

This is nothing short of extortion. Especially when the RFP stipulates (which it normally does, or the agency is dumb enough to) the ideas are transferred and owned by the client regardless of the agency’s win or loss of the business.

So clients take advantage of agencies. Agencies know if they don’t adhere to the idea giveaway, their competition gladly will, so they have little choice but to participate.

The brand is to blame for asking for work without pay. The agency is to blame for giving away work without demanding compensation.

But neither side is likely to take the high road on the ethical side of things, so we have ourselves a Catch 22.

The Only Hope

All that an agency can hope for is market share or diversification of revenue that is so overwhelming they don’t need the new business bad enough.

In early 2009, while still working with Doe-Anderson, a great full-service advertising agency in Louisville, I had the task of putting together a digital marketing dream team of partners for a major brand. I hand-picked several of the top boutique firms specializing in social media, email marketing, search engine optimization, mobile marketing and design and called them each to talk about participating in my little RFP process. I clarified that I would not ask for their creative work, that I only wanted to hear how they would approach solving the communications problem at hand and how they would fit in with a large, multiple-agency team to work on behalf of the client. From that information, I would ask them each several questions and then choose the firm in each category I felt was the best fit for our needs.

When I called one of the companies I was told, “I’m sorry, we don’t respond to RFPs.”

Half of me screamed, “WHAT? DO YOU KNOW WHICH BRAND YOU’RE PASSING ON?” And the other half screamed, “GOT ANY OPENINGS?!”

It turns out that particular firm had developed several products around its niche and had the advantageous position to only work with companies they wanted to work with. They told me they don’t respond to RFPs because if the client in question wants the best in the business, they don’t need to compare and contrast, they just hire them. They only wanted to work with people who wanted to work with them. Period.

On one hand, it reeks of arrogance. Here’s hoping they never fall off that pedestal and need clients. On the other hand, it’s where I would want my agency or consultancy to be and I admire the hell of them for taking that stand.

If only everyone did.

The Solution

Like any long-standing, traditional process that has morphed into a problem (i.e. – health care, government bureaucracy, doctor’s visits) there’s no one solution to the RFP problem. It will take a combination of a lot of things to fix:

• Companies and brands need to recognize that creative concepts are an agency’s bread and butter and shouldn’t be asked for without compensation
• Agencies need to place a better value on their work and either ask for compensation, ownership or refuse to provide creative concepts
• Agencies that undercut competitors by violating that stance should be penalized somehow

Will any of that happen? Probably not. Ad agency and PR firm creative concepts aren’t exactly earth-shattering utilities that need some sort of regulation.

But sooner or later agencies are going to realize the cost-benefit of the dog-and-pony show isn’t in their favor and stop responding. If you think the current state of marketing is bad now, just wait until the crappy firms get all the business.

In that scenario, everyone loses.

Mitch Ditkoff has some more rational ideas for improving the RFP process over at The Heart of Innovation I hope you brand-side folks will consider as well.

This article was written by Jason Falls and can be viewed in full here

About Jason Falls

Jason Falls is the founder and editor of Social Media Explorer and its companion learning community Exploring Social Media. He is a leading thinker, educator, speaker and consultant in the world of social media marketing, public relations, digital marketing and communications. Please connect with him on Twitter (@JasonFalls).

Related articles

• Negotiating the RFP Process – Advice for Communicators from Robert Udowitz (prconversations.wordpress.com)
• 6 Powerful Questions Every RFP Needs (hyperdiskmtkg.wordpress.com)
• The Art of Pitching – Preparing for a Business Pitch (creativeagencysecrets.com)

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Imagine you have launched your business and the brand is up and running.  You are receiving enquiries but not enough are converting to paying customers.

Even though you may be the genius behind the business idea, you have no idea how to successfully pitch your business to potential clients and convert them.

Why not hire a professional to pitch for you?

Successful Marketing agencies know how to pitch a business/ brand. Full stop. That’s what makes them successful.

So why not pitch your business/ brand to an agency in a relaxed environment where your pitch won’t matter and let them transfer it into the professional and suave format needed to win you new clients?

It’s as easy as choosing an appropriate agency and filling them in on your business/ brand, the goals of the pitch and background information on who they will be pitching to.  If they are good at what they do, they will do their own research and put a creative agency swing on things.

Choosing an agency

When choosing an agency to pitch for your business you will be faced with the choice of an agency that has previous experience in your industry sector or an agency that doesn’t. Although this seems like an obvious decision, don’t write the latter off straight away, everybody needs to start somewhere and often an agency new to your industry sector will have fresh ideas and be able to think outside the box, which is often a key trait of a successful pitch.

Shortlist and meet with a couple of agencies, keeping in mind that you will have to work with these people and rely on them to secure your business. Your aim from these meetings should be to work out if the agency is as motivated about your business as you are.

Filling them in

Provide the agency with all the information necessary to make a winning pitch including;

• Names of the clients they will be pitching to
• Background relationship between your business and the potential client
• Outcomes you hope to achieve with the pitch – remember credentials meetings and chemistry meetings should still have stated outcomes planned in advance.

Related articles

• How To Fix A Broken Pitch Process (adpulp.com)
• Winning pitches is fun! (creativeagencysecrets.com)
• The Art of Pitching (creativeagencysecrets.com)
• Cynicism, duplicity and institutional incompetence (stephengreensted.wordpress.com)
• The Unspoken Evil Of The RFP (socialmediaexplorer.com)
• RFP Hell (kula partners)

How can you come across as the kind of person they want in their life?

What should I always do when pitching?

Of course there are obvious things which should be commonplace every time you make a pitch:

• Dress Snappy – better to be over-dressed than underdressed; research your prospect company’s dress code to make sure
• Arrive early to the meeting and familiarise yourself with the environment – this will allow you to be more relaxed during the pitch.  If possible scout it out a week in advance.  Check power socket locations and AV equipment.
• Always be grateful for the opportunity – if the pitch doesn’t go the way you wanted it to, thank them for the chance.  Never cut ties with anyone in business.  You never know, they may recommend you to someone else or ask you back for another chance

Recently I have been a part of two creative agency pitches to two very different businesses. The first was a gas fire manufacturer and the second, a real estate agent.  Although both pitches went well, what quickly became apparent to me was that having the confidence and public speaking skills to pitch your business is only half of what is required for a successful pitch.

The first pitch

I entered the first pitch knowing very little about the gas fire manufacturer and the meeting quickly became a one-way flow of information on who the company was and what they did.  This was possibly time wasted.  They wanted to tell us about themselves and if I had prepared properly for the meeting I would have known all this and the time could have been spent on discussions on what we could do for them as a creative agency.

The second pitch

Taking this into account, I prepared for the second pitch and did deep research on the prospective client.  This not only impressed the client but it saved us time where we could get down to the nitty-gritty on how we could help his business.  This pitch went well and there was agreement on a further meeting to discuss our proposal.

What should you do

Below is a checklist on what sort of research should be done for any public relations project, which translates very well to pre-pitch research. Click here to see the full checklist and article.  Work through this checklist to ensure you have done all you can to research a prospective client before entering that all important first pitch

• See what’s being said on social media - This can be a great real-time window into what others know and think about your client and a great way to make sure that your pitch will go over well.
• Spend time with your client – Set their expectations that you want more than a one-hour meeting. You want a few hours to mine them for any and all information.
• Spend time without your client – Ask them to put you in touch with people from other areas of their company: sales, customer relations and even those on the floor (front desk personnel, those at the cash register, tour guides, etc.).
• Get on site! – If your client is a hotel, be a guest. Spend the night, try the food, and ask for suggestions of surrounding things to do.

Rob Lane

Rob is Marketing Assistant at Creative Agency Secrets.

Related articles

• Cynicism, duplicity and institutional incompetence (stephengreensted.wordpress.com)
• Knowing Your Client Inside and Out: A Checklist For Client Research (dontdrinkthekoolaidblog.com)
• How To Lose A Pitch When You Thought You Were Winning (stephengreensted.wordpress.com)

Agencies

• Taproot Creative, integrated marketing, Tallahassee, FL, USA
• BBDO, Advertising agency, Russia
• Beckerman PR, creative public relations, NJ, USA
• The Bounce Agency, creative solutions for the right answer, South Carolina, USA
• Intermark Group, Top 100 advertising agency, Birmingham AL, USA

Brands

• Equifax - credit scoring financial services, Atlanta GA, USA
• Houses of Parliament, Government, London UK
• Tallinin Science Park, Business location and offices, Tallinin, Estonia
• Riverside Graphics, printing company, Reading UK
• Cheshire County Council, Government, Chester, UK
• Barnes Aerospace, manufacture and repair of turbines, Cincinnati, OH, USA
• SOLA, corporate recruitment agency, London UK
• Computer Concepts Ltd, network expertise and disaster recovery, New Zealand
• Wandering Wifi, wireless internet services, USA
• Forestry Commission, Government, UK
• The American Game Factory, software games, Denmark
• Kelkoo, retail comparison website, UK
• TED Co, entrepreneur business incubator, Tyneside, UK
• B&Q plc, DIY retailer, Southampton, UK
• Yapi Kredi Bank, retail banking services, Turkey

Brands seeking agencies

• Worldwide telecoms and data service “business development for advertising agencies”, USA
• Global insurance company wants “creative agency Koln”, Germany/Austria
• National newspaper group needs “cold calling digital media”, USA
• Network design and management “How to write a campaign proposal”, South Africa
• Web security agency “marketing agency pitch brief”, London UK
• Magazine for retailers “sample brief pitch creative agency” Romania
• Regional Development agency “new business development creative agency”, Regions UK
• Mobile telephony, “Brief pitching agency”, Jakarta, Indonesia
• City council, “Creative agencies in Indiana”, USA

It’s time to stop treating your agency as its most neglected client and promote it to your most important client. It’s time to give the cobbler’s children some new shoes!

How?

Empower your new business director. Give them the clout and resources to get what they need from the agency as if they are the primary contact person for your most important client. Their projects are not put on the back burner when the agency gets busy. Allow them the time, resources and realistic expectations to build a consistent new business pipeline.

Choose your best target audience. Who is your agency’s target audience? That is the first question that needs to be answered. Without it there is no direction for your agency. It’s time to take a rifled approach to your agency’s new business. You can’t stay focused if you don’t have a target identified.

Practice what you preach. Use the tools that you recommend your clients use. Demonstrate their success for your agency. This is especially true when participating in social media. Walk the walk, not just talk the talk. Create a new business program using social media to generate inbound leads for your agency. This doesn’t replace traditional methods for agency new business but refines, enhances and integrates them into a powerful agency new business machine.

Be transparent. The transparency that social media mandates is changing the way agency’s do business, and it is a much needed change. It compels us to lead with benefits instead of capabilities. Everything is now laid out bare on the table, including agency compensation. Perhaps even more performance based agreements. On the client side perhaps replacing our current broken system of pitches and RFPs with something new. Long term relationships should be a mutual goal because it benefits both the client and agency. For that to happen there must be the “win-win” for both and that can’t be done without being transparent.

Be a Leader not a vendor. If you want to stop clients from treating your agency as a vendor you must lead. To be in a position leadership means to have a genuine expertise, a point of differentiation. Your agency can no longer afford to be everything to everybody. So the next question you need to answer, “what is our expertise?” When you answer this question, plant that flag in the ground, this is what we do best, it will command respect, higher premiums and give clients outside your market a reason to do business with your agency. A small agency was recently included in a pitch for a national account because they were willing to say this is who we are, this is how we are different than other agencies, this is our expertise.

This article was originally published here.

How does biz dev work at Grey and what is your role?

I imagine biz dev is in two halves there’s the organic side from existing clients and the new business side.  They are basically totally different.
New business I envisage is like a massive funnel at the top there is a mass of people who have no idea who we are and what we do and at the bottom we win the business.
Maybe a colander is a better analogy – new biz is about that journey but it isn’t one thing it is loads of different things – discrete events all of which it’s possible to be good or bad at.  For example, prospecting / chemistry / pitch meetings.

This is an important insight.  IMO it’s obvious when you say it but actually many people don’t talk about it in that way.
The challenge is a bit like a F1 race the race lasts 1.5 hours but the different between winning and coming second is hundredths of a second. In new biz this is worse than coming second.
You have to be brilliant at every stage in order to win.

You have got to break down the process yourself and be brutal and frank about how good are we at each stage.  Where do we begin.  How to play to strengths and minimise weaknesses is the strategy.

As MD where do you get involved?
The closer we get towards actually having a meeting with someone (which can be along way down the process) the more involved I am.

We wouldn’t have a new biz meeting with a client without heavy representation by senior management of the agency – planning / creative directors.  Earlier on it is hard to be definite about where and how I appear.  I often get involved with consultants which is a ‘familiar route’.  But for prospecting I can be quite a long way away especially if it’s speculative…..

I think about the meeting as business you have to be quite short termist about how you manage the meeting.  You have to ‘win that meeting -  there ain’t no future unless you win that meeting.  Deploy effort and resources to win the meeting.  If you don’t get another meeting there it’s academic.

Employ the best people you can as often as you can in order to get through.  In any business growth is critical to the success of the business and so the senior team must be involved.  Becoming a growing business solves problems more than bottom line, reputation, career management, personal development, morale, confidence or sense of fulfilment.

Sometimes there’s an undercurrent that biz dev is seen as bit “they are acquisitive” and move onto the next client and this is grasping or wrong.  Maybe they should be truer to the client s they have and do well for them.   Any business without an active and aggressive strategy for growth is ridiculous to suggest otherwise, particularly as these days the vast majority of marketing companies are publicly listed.

Which bit do you enjoy the most?
I enjoy the meetings where you are physically there in front of the clients.  It’s the most distilled bit of the job.  Everything that happens in our job happens in those meetings.  Pitch chemistry or progress – living on your wits and the highest and lowest points of the job.  When they go well how fansastic that is, it’s absolutely brilliant.  Nothing gives an agency more than a sense of excitement, joy and pleasure as winning a piece of business.  Also it can be the worst bit.  Not winning can be absolutely horrible.

What’s your most recent new business win  and why do you think you won it?

888.com is the most recent client win.  I think we won it for the reasons that everyone always wins – I think we had a combination of  ‘the right answer’ that the client felt most appropriate and a team of people who the client felt were the right-est for them.

The perennial debate is which comes first?  the client falls in love with the people and that makes them more likely to like the idea that is put in front of them or the other way round.   A whole group of consultants and experts will tell you this is the case.  The opposite is when someone cracks the idea and how much they love the poeople won’t overcome the wrong idea.

To win you have to do being both very well.  Be at the top of the pile of both scores.

You are an advertising agency – do you use advertising for biz dev?
We are sort of working on this one.  A lot but by no means all of business that comes to us comes via consultants or intermediaries.  Creative Brief, Agency Assessments, AAR, ISBA are the main ones.  There is a relative small group of people who control the majority of the briefs and the majority of the briefs come to us from those people.
What is key is the marketing of ourselves towards those people.  We do all sorts of stuff.
Crucially personal relationships affect this.  Do they look you in the eye and believe you, do they like the team, do they know what you’ve done, won quite a bit of business recently?  On a wider scale agencies aren’t very good at using their own skill [advertising in our case] in prospecting.

Cold prospecting is a difficult thing to do for us and our peers.  I don’t think anyone is particualrly good about it.  So much of it is about finding ways for allowing prospective clients to understand and meet you as people;  networking is a really important part of it.

Overall, if I knew the answer i probably wouldn’t tell you!

And I don’t know the answer.

Now there is a bit of sadness from the early-adopters like Adriana and Hugh that the intimacy of the early years has bone.  And the hugely hyped when they change their habits.

But surely, when a medium goes mainstream it's bound to change.  There are so many tools available now that just weren't here in 2006 when I started writing.

I just moved my rowing blog onto a WP platform and a new URL, Scullfast .  Gonna have to work hard to redirect the RSS juice, I know that.  But I also know that Google finds mentions by and about me within about 40 minutes of them going live online.  So, those who really want to find me, will.

And so now that blogging is officially happening for more people more of the time, I still think its frequency of update determines to a great degree the amount of traction you can get and what your readers will be getting out of it. 

I read so many Agencies' blogs that have ancient date stamps.It's really embarrassing to me – I advocate using blogs for biz dev but with the proviso that you must look after them (feed them regularly – like children and pets).

So come on – be honest with yourselves. If you are going to blog make the commitment work.  If not.  Take it down.

It's not pretty otherwise.

A profile of Anomaly , a US agency that is trying to activly 'kill' the old advertising model.  They are known for being branding / design / innovation think-tank and VC all rolled into one.  Their claim is that their model attacks the fundamental flaws of the agency machine.

Most agencies still earn their paychecks from time sheets and media spend, which means they#'re motivated to be inefficient and to produce ideas that are wedded to expensive media.  Anomaly takes a differetn approach, negotiating upfront either a predetermined fee or, better yet, royalties or an equity stake in a product.  So when a client comes in with an advertising problem, Anomaly addresses it more broadly as a business issue, analyzing everything from design to product development.

 They also invent new products and build brands from scratch that they have thought up or collaborated with from launch.  

Another nice idea is to keep staff numbers below 100 – so they spun out a new agency called "Another Anomoly" with a separate P&L and offices!

Their 'best' venture yet is Virgin America's luggage designed for the air crew. and shortly to be commercially available.  Sales profits will be shared three ways between Virgin and the snowboard company, Burton, who crafted the suitcase with skateboard wheels and a a removable cosmetics pouch. [I couldn't find any designs online to show you.]

And so, I visited their site.  Sadly like most agencies' it is built in flash so you can't link to individual pages.

I liked :

• the 'why we exist' page – using quotes from reports, newspapers and industry names speaking about the problems & issues of marketing and agencies
• no timesheets – who wouldn't want to work there for this bit of no-admin?
• the list of IP they have created…. but no images
• the questions / answers page which sets out why they are different and how they work differently but I couldn't cut and paste from flash so you'll have to go and look for yourself.

I didn't like :

• no links to the industry rags' quotes about them
• the news page is just articles they've written or been quoted in.  Not news.
• no creative on show [maybe that's good? certainly different]
• the new company, Another Anomoly , is a linked URL with the same content….. now why is that?

And, they are opening in London – subject to finding the right talent…..

I believe the complex sale presents a set of unique sales and marketing problems that benefits by a shift away from the traditional lead generation mind-set to a new way of thinking centered the following tenets:

* More ROI is reaped from the patient tending of potential customers (relationships) over time. Customers for life.
* Lead generation is a conversation, not a series of disjointed campaigns. [as I wrote here]
* Build relationships with the right people and companies regardless of their timing to buy.
* Engage people early (preferably before) in their buying process as possible so you can create and influence their vision.
* The first impression matters.  So does the second.  So does every single touch after that.  Consistency and relevancy is key.
* Sales and marketing must work together as one team.  Seeing each other as internal customers.
* A multi-modal and multi-touch lead generation portfolio will always outperform marketing tactics that stand alone.
* Sales and marketing should have a unified understanding and consensus in their language on things like ideal customers and universal lead definition.
* If used properly, the phone is the single best way to reach decision makers and to begin a dialog when you have a complex sale. [contact Sue Crampton for a fabulous service]
* Buy-in from sales and marketing as well as executive leadership is critical to the success of any lead generation program.
* Be willing and prepared to close the loop with every opportunity that is identified.
* The purpose of marketing is to help the sales team sell.
* Trusted advisers win more sales than slick brands.
* Companies don’t buy – people do. Don’t ever forget the human touch

And so for creative agencies: my interpretation of Brian’s work comes out like this:

1 – have a short-ish list of your ideal clients and have a long term plan for nurturing them so that you know what has been done and what needs doing next

2 -  Enable a centralised record of all emails / meeting notes / phone conversation records from everyone in the agency with these key prospects so that at any point in time anyone can see what has been said, when, by who, to whom.  Then they can ‘take up’ the conversation from where it last left off

3 -  if the ‘conversation’ is ongoing, you stand the best possible chance of being in on the early discussions about a repitch.  Hell, if you are trusted you might even get to write the scoping document!

4 – the whole agency must work as a single team.  This means that creative, suits and biz dev all need to be part of the process of wooing a new client.  The client sees the agency as a unit working together in the best possible way.  Many layers of conversation drive a web of relationships proving a stronger proposition that can eventually turn into a strong client:agency working relationship.

5 – an ongoing telephone contact campaign needs to be part of the overall strategy.  Human voice and learning are more urgent, persuasive and insightful than email or letter can ever be.

6 – closed loop marketing means that all the internal processes need to be well-known and integrated.  Whether automatic or manual, electronic or paper-based they are the foundation of your successful long term biz dev.