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Do your AEs bristle at the word sales?

Be honest agency owner, you know that your account executive team is great. But sometimes they struggle when it comes to actual sales. Enter our account executive sales training workshop. 67% of an agency's new business revenue comes from existing clients (on average).  The people who are (or sadly -- are not) going to bring in those additional dollars are your account executive team.  They interact with their clients every day.  They propose new work, they know when the client has hit a barrier (and maybe needs some marketing help to leap over it) and they drive that client's activity. Sounds like sales to me.  But if your AEs think and behave more like relationship managers, you're not alone.  When surveyed, agency owners had these frustrations about the people on their account team: Sometimes they behave like they work for the client, not the agency They don't know how to listen for problems we can help solve They don't understand the business of owning or running a business They don't think new business or sales within our existing clients They let the client lead too much Sound familiar?  That's why we developed our Account Service Advanced Training workshop.  We spend two days teaching GOOD account service people how to really help grow their agency's AGI, reputation, new business (both from existing clients and brand new) and their network.  We talk numbers.  We talk strategy.  And we talk sales. When the participants leave the executive sales training workshop, sales is no longer a dirty or scary word.  They come back fired up and excited to stretch their wings. But don't take our word for it.  Here's what some past participants have had to say: “My AE [...]

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How many hours should ad agency employees work?

How do you track billable time in an agency, and how many hours should ad agency employees work? This is a question that comes up all the time in my work with agencies.  The expectation in terms of a work week ranges from 37.5 hours a week to 50 hours a week although most agencies will say 40 in terms of hours worked in a week.  So that gives us a range from 1950 hours a year to 2600 hours a year with most people citing the 2080 hours a year number (40 hours/week).  But given an average of 3 weeks of time off (vacation and sick) and 10 work holidays (which translates to 5 weeks off) that gets you down to 1762.50 (37.5) to 2,350 as a range with 1880 hours a year being the 40 hour work week average. So when you think about how you're going to track billable time, the rule of thumb is that no employee can be billable 100%.  So here’s the best practices expectations by job function: Project Managers/Production Managers — 80% which is 1,504 hours at the 1880 hours in a year model Sr. Account Staff who have more admin/new business responsibilities — 70% which is 1,316 at the 1,880 hours in a year model Account Executives (jr and mid range)  -- 80% which is 1,504 at the 1,880 hours in a year model Creatives (writers and art directors) -- 75% which is 1,410 at the 1,880 hours in a  year model Media — 90% which is 1,692 at the 1,880 hours in a year model   And then you have your admin folks, who if you can get 25% billable time from — that’s great. The [...]

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Managing in a renewing economy (part two)

Agency management can be a challenge as the economy teeters back and forth between recovery and residual crud.  Things feel like they're getting better and according to all the agencies we're talking to -- they are.  But it's not all blue skies yet. I'm not trying to go all Eyeore on you...but let's stay careful. We've developed 25 helpful agency management steps you should consider as you move your agency through these turbulent waters.  Last week, we posted the first 13 steps and here are the final 12. Demonstrate to clients and suppliers that you are thorough, organized and committed to best business practices. Know where the agency's "breakeven" point is, and make sure you include the full salary and benefits of the owners. You'd best know where the worst case and best case scenarios are hidden. Continue to be aggressive and persistent in your Accounts Receivable. Call on all overdue invoices and let AEs help on collections that are coming up on 60 days old. If you have extra space created by a shrinking staff over the past year or so, think about renting the extra space out to a business partner, like your web coder or PR group. Tighten policies that were too casual, and don't get too liberal with your budgets for supplies or services. Keep costs under control. Economic hardship taught you to institute tight financial control over costs. Don't let up. If you are still going to pursue getting mark- ups on outside purchases, make sure they are spelled out in advance. If stated "up front" it rarely is a problem. Check your banking relationship. If you borrowed during these past tough times, go to the bank and review your performance, [...]

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Where do you get your intelligence?

One of the biggest challenges for agency leaders today is stay on top of the trends, shifts and ever-shifting landscape so they can help their clients stay plugged in.  It's tough to find reliable sources that aren't either so well known they don't provide an edge or are so far out there that they're too speculative. For many agencies, Ad-ology's Marketing Forecast is a key source that provides that edge.  If you're not familiar with them...check out this month's Marketing Forecast. [youtube]http://youtu.be/vQtCNZRGgkw   If you find that useful -- check out their YouTube channel with over 100 videos.

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Managing Your Agency in a Renewing Market (part one)

Don't get carried away with your enthusiasm about the increase in business activity. We are recovering from the Great Recession. You've survived it and have earned the right to celebrate.  A little. But now is not the time to take your eye off the prize.  In this recovery period, agency management can be tricky, because we're a little tired of fighting the fight and are looking forward to backing off a little. Don't do it. We've developed 25 helpful agency management steps you need to consider in managing the agency during this recovery period.  Here are the first half.... (and here's the 2nd half!) Make sure your strategic plan is in place, and that it focuses on some specialization with diversification. Now is the time to grow the agency, and within the context of your existing operations. New business programming is critical, but isn't the only source of profitability. Your managers and account staff need to understand what others do and why certain reporting requirements are needed to manage the agency effectively. Be a sponge. Get all the input you can from peers and suppliers about competition and how they are handling the recovery. Get into a network group to discuss operating techniques. If the network is an advertising agency network, that's better than a "business" network with people from other businesses. Always keep an eye on your profits. Don't assume that the bigger clients are the more profitable clients. They may pump in a lot of bucks, but they may be sucking the life out of the agency because they aren't profitable. Watch them all and know where your profits are coming from. Take another look at your fees and retainers. They should all be [...]

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Digital only agencies aren’t making the grade

According to the Q2 Pearlfinders Index, which is digital marketing research based on interviews with more than 4,000 marketing executives across all industries --  digital and social media services have become more sought-after disciplines, while consumer PR, though still popular, is becoming less of a consideration. However, agencies that only offer digital services are not getting the nod. Despite shifting their budgets towards digital and social media, 3 in 4 marketers aren’t using exclusively digital agencies for their social or digital needs, and the majority of those don’t foresee using them in the near future, according to June 2012 survey results from RSW/US. In fact, only about 2 in 5 think such agencies can survive, with the remainder believing that digital agencies need to offer more traditional services to maintain their relevancy. In Q2, among the times that marketing decision-makers advised that they were considering a particular service category, digital made up 19% of these demands, up from 13% a year earlier. Similarly, social media was mentioned 17.1% of the time, up from 14.1% in Q2 2011. Consumer PR, at 14%, was the third most-desirable discipline, though it fell from 18.6% a year earlier. Advertising and corporate PR rounded out the top 5 desirable agency disciplines for Q2 according to this digital marketing research, though both fell substantially from the previous quarter. Customer Acquisition the Dominant Marketing Objective In Q2 2012, companies’ primary customer marketing objective was acquisition (93.8%), compared to just 5% focusing on retention and 3.8% on development. A year earlier, 71.3% had focused on acquisition, with retention (17.1%) and development (11.6%) figuring more prominently into the equation. Other Findings: NPD/innovation was the strongest source of opportunity for agencies, accounting for 35% of new business opportunities [...]

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Exit interviews – don’t miss this opportunity

I know I'm not telling you anything you haven't already figured out.  An agency's employees are so much more than the life blood.  They are the walking, talking embodiment of your company.  And when they leave -- you can learn a great deal, if you conduct exit interviews. I've been really fortunate.  In the almost 20 years of owning my agency, I've had (and have) some incredible employees.  They've gone on to do amazing things like start their own agency, work for Dow Jones, opt to stay home and raise three wonderful boys, work for Meredith Publishing, BBDO and many other fine companies. Of course, there's the other side of the coin too.  Some self-destructed, others...I mis managed or put into the wrong position and set them up to fail.  Some of them are still friends.  Others curse my name, I'm sure.  Honestly, that's one of the most painful elements of owning an agency for me.  I know I preach that we should have have thick skins, but I can't say I have that mastered. But no matter how/why someone leaves your agency, don't miss the opportunity to to conduct an exit interview.  You probably won't like everything you hear, but you will learn from it.  Every time. Exit interviews can deliver important inside information. The way departing employees view your organization might be the way things really are.  You can do this in a few different ways. If the employee is leaving on good terms, as the agency owner, you might be able to sit down and have a frank conversation.  But if there's still a final paycheck pending or they don't want to burn any bridges, you might find them less than truthful. [...]

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5 Mistakes that cost agency owners money.

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