fbpx

Be Wary of the New Business Development Director With the Legendary Prospecting Network

There is a great dilemma many agency owners face time and time again: Do you hire an internal new business development person for your agency with solid sales experience (and a price tag to match), or an inexperienced individual that’s cheaper, but seems driven/teachable? The former example is certainly a potentially sound investment, although not always feasible, and the latter doesn’t traditionally have a great success rate unless an agency is willing to put real work behind their training and possesses the requisite patience to see the process through. That’s probably why the average new business director at an agency lasts about eighteen months. In my first example, you have likely experienced this in some form or another. That person with experience in one vertical and an abundant network of prospects within that vertical; or the other kind, that person with the fabled “ultimate agency new business Rolodex.” And sometimes, you run across someone with both deep experience in a vertical and an abundant network. These kinds of hires occur often and I don’t blame agencies for it. They can work but, in far too many instances, that new business director with the legendary prospecting network hire ends up flaming out. In fact, I recently spoke with an agency principal on this very topic, and she gave me permission to share her less than desirable experience with you. So, here goes. The Legendary Prospecting Network When my agency owner friend initially hired this new business development guru with the “legendary prospecting network,” the big draw was, of course, that huge network. There were assurances, apparently all in good faith, that success would result from that network. It sounded promising, but unfortunately, it was not in [...]

By |

The Specialist Agency: An Argument For and Against

Earlier this year I had the honor of serving as the morning keynote speaker for PRGN’s semi-annual member summit in Toronto. My topic was on the five indicators of new business success that I consistently see in the agencies I work with (and, likewise, the corresponding indicators of agencies that stay stuck in a feast-or-famine cycle). One of the indicators is a specialist mindset, as opposed to an “all things to all people” approach. This elicited a comment from one of the agency owners in the audience. They tried this specialist agency strategy at his agency and it didn’t work. It had the opposite effect; they couldn’t find enough new business opportunities to sustain the firm. What did I have to say to that? (Gulp) Before I tell you how I responded, let me explain that I’m not a specialist agency hardliner. In fact, this time last year, I wrote about this. To be sure, I see enormous benefits to specializing when it comes to new business. Pitching for new business is a big investment. The more specialized your pitch, the more efficient your investment. That’s because: Generalists seek out clients; specialists are more likely to be sought Generalists differentiate based on price; specialists can afford to charge a premium Generalists will always be tempted to reinvent themselves to suit the nature of the prospect; specialists find it easier to home in on a consistent message that’s effective for the right audience But I also don’t see it as a stark choice. In my piece, I referred to the proverb about the shoemaker’s children who wear no shoes. This is a favorite to describe agencies that can’t seem to take their own advice when it [...]

By |

How to Scale Your Agency — Overcome the Wizard Complex

At UGURUS, a business school for digital agencies, my team and I spend thousands of hours a year consulting and coaching owners in groups or one on one. Our aim is simple: To help you achieve freedom in your business and life. One of the ways we do that is by helping digital agency owners work ON their business, not just IN them. “When you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then go to work on your business, rather than in it, with a full understanding of why it is absolutely necessary for you to do so.” -Michael E. Gerber, E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It For agency owners, achieving freedom usually means: Working fewer hours (less than sixty is a start) Making more money (getting paid a healthy salary) Sitting in fewer seats (helping you do better work) There’s a commonly-accepted fallacy out there that most entrepreneurs are working towards an early retirement and days filled with sitting on the beach drinking fruity cocktails. However, most entrepreneurs I meet love the work they do, and have no intention of retiring early. The standard definition of the term “exit” in entrepreneur-speak is to sell your business, but most agency owners I meet aren’t anywhere near this point. They haven’t built a company that is worth anything beyond themselves. They’re involved in every aspect of the business from generating leads, converting those leads into clients, and delivering the work. They’ve built themselves a job. A stressful. Demanding. Underpaying. J-O-B. For these owners, “exit” means being able [...]

By |

The 5 Most Common Legal Mistakes in Agency New Business – and How to Fix Them

The agency new business process is, for most agencies, exciting and stressful at the same time. While your team is focused on the thrill of a potential “win,” and what that could mean for the agency’s fortunes, it’s probably equally under stress about meeting deadlines, putting forth your best efforts for the prospect, and keeping other clients happy too. Jody Sutter of Sutter Company and I recently addressed the challenges of new business and negotiations in a web clinic for agencies organized by Filament: “Don’t Leave Money on the Table – Negotiating Client Contracts From a Position of Strength.” While you’re navigating this process at warp speed, it’s easy to make an oversight or misstep that could cause bad legal consequences or financial loss for the agency. Don’t let this happen – be aware of the most common legal mistakes agencies make during their new business efforts, and how to fix (or avoid) them. 5 Legal Mistakes In Agency New Business and How to Fix Them Mistake #1: You don’t protect the Agency’s intellectual property during a pitch or discovery session, or in your proposal. Fix It: Sometimes it’s a valid business decision to allow the Client to own IP in pitch materials, spec creative or proposals – either because the Agency negotiated payment for it, or because it’s a required “ticket” to participate in the opportunity. But make it an intentional decision. Unless you’ve agreed with a prospective Client that it will own the Agency’s pre-engagement IP, use a Nondisclosure Agreement that protects the Agency’s ownership position. Absent that, at a minimum include IP ownership clauses in your proposal and pitch assets, and use copyright ownership notices on these materials and any spec creative [...]

By |

How to Position Your Agency for Success

Every day across the globe, agencies are working hard to differentiate their clients and help drive their clients’ growth. These agencies use the art and science of positioning to help their clients stand out from competition in an important and authentic manner. Sadly, most of the agencies doing this fine work have not worked the same positioning magic for themselves, in spite of the fact that they compete with dozens—if not hundreds—of other agencies on a daily basis. There is an abundance of talented and effective agencies who have failed to differentiate themselves. As a result, they are missing out on the significant (and very profitable) growth opportunities triggered by a compelling brand position. So, how to position your agency for success? Let’s talk about it. The Challenges of Agency Growth As you no doubt know, there are numerous challenges when it comes to growing an agency today. These challenges include: • More competition • Greater complexity • Difficulty expressing the uniqueness of your agency • A more educated and informed buyer who does his/her agency research without your knowledge Most agencies face these challenges. There is, however, an opportunity to address these challenges by positioning your agency in a truly unique, compelling and differentiated fashion. In this paper we will share the learning we have regarding how to create such a differentiated position for any agency by leveraging best practices that we have learned from our 28 years of agency related consulting. The Great Agencies of Old Most agencies today face the challenge of how to effectively position their firm and how to present their agency in a compelling, client-centric manner. It was not always like this! The great agencies of old stood for [...]

By |

How Agencies Can Benefit from Tax Planning

Is tax season really over? While the filing deadline for individual and corporate taxes has come and gone (unless of course, you’ve extended), from a strategic standpoint, tax season may be over, but the need for tax planning is really an omnipresent one. There’s always a sense of relief once taxes are filed. It’s an annual chore that, dare I say, nobody loves to do. But everyone I know loves when it’s done. They like getting it checked off their list so much that very few clients want to talk or think about taxes or tax planning for the rest of the year. That is, until tax time comes around again. But that is, in my opinion, a mistaken. In fact, paying attention to your tax situation outside of tax season is worth more than you might think. A few people I know even made it their hobby to figure out ways to pay less in taxes. I’m not suggesting you must go that far. But you should have a good understanding of why the traditional “tax season” doesn’t mean anything to you and your agency business and how agencies can benefit from tax planning. The Misnomer of “Tax Season” Other than getting your own taxes filed at the beginning of each year, “tax season” is a misnomer for anyone outside of the tax preparation industry— where the term got coined in the first place. Tax season is really tax FILING season. Which is an important distinction, so you know where your focus should go. Yes, it’s important to get your tax return filed on time. But keep in mind that filing is the end of a year-long cycle where you should be seeing results [...]

By |

How to Build Your Agency’s New Business Machine Without Over-hiring or Over-automating

When it comes to sales, marketing agencies are at least 20 years behind the most cutting-edge industries. According to a Hubspot survey, 44 percent of agencies don't use a CRM, 42 percent haven't defined their ideal client, and 90 percent describe referrals and word of mouth as their main source for new business. It’s understandable. Historically, agencies were helmed by creatives. In the agency of record era, a competent shop could forge relationships, win several lucrative accounts, and keep them for decades. Ambitious sales activity was often seen as unnecessary or even distasteful. But it’s not the 1980s anymore. Nowadays, with internet-induced competition, industry fragmentation, and low distribution costs, agencies have to hunt. Agencies would do well to heed Peter Thiel’s advice: "Look around. If you don't see any salespeople, you're the salesperson." Thiel was speaking to startup founders, but it’s just as applicable to agency owners, or anyone else in a sales position who might not know they are. Okay, so what are we supposed to do about it? Below are seven lessons that will help get you started. Think Like a Medici Not DaVinci  If you know your history, you might know that The House of Medici was an Italian banking family who rose to prominence in the 15th century and created a humanist environment that empowered numerous Renaissance artists and helped them flourish. There was a dash of skullduggery along the way, but if you can factor that out and build a culture that personifies being a patron to your artists, you’ll be in good shape. However, there’s a twist here. Instead of being a creative organization that’s supported by salespeople, focus on being a sales organization that supports creative work. With [...]

By |

How To Stay In The Sweet Spot Of Agency Size

From an anthropological perspective, the evolution of agencies follows a predictable path, regardless of geographical location or market focus. Consequently, all five-person agencies tend to have key similarities; the same holds true for agencies boasting 200 or more team members. For someone starting or running an agency, the foreknowledge of an agency’s expected growth provides the opportunity to make wise planning decisions. After all, it’s always easier to prepare for changes and trade-offs than to have them suddenly thrust at your agency’s door. Whether your agency is in its infancy or you’ve already built somewhat of a legacy, you need all the information you can get to pivot correctly. Today, according to research, we are seeing a 38% reduction in average agency client revenue, so any chance to play Nostradamus is a significant opportunity. Analyzing The Metamorphosis Of A Standard Agency The top types of agency players include the brand-new agency with up to five employees, the mid-size agency of six to 12 employees and the more robust agency of 13 to 25 employees. Each agency arrangement has its own pros and cons, not to mention its possibilities for growth. In the smallest of agencies, everyone wears many hats, including the owner. Not only is the agency founder at the helm, but she’s also directing everyone’s decisions. Rather than a flat hierarchy, all personnel get their marching orders from one boss. Although this might seem chaotic, it’s necessary; money is tight and resources are stretched thin. A young agency of five or fewer people develops a desire to take any client, no matter the client’s needs, size, vision, etc. How else can it build a portfolio other than by saying “yes” without constraints? Anyone with marketing [...]

By |

How to Calculate Advertising Agency Commission Rates

I have been teaching the AE Bootcamp and Advanced AE Bootcamp for over a decade, and one of the things that always surprises me is how few AEs understand how to calculate advertising agency commission rates on media buys. When the rate calculation is incorrect, it can cost your agency a good chunk of the very thin margin of profit you can earn when you plan and buy media. Media commission rates aren’t some random markup. It’s fair and reasonable compensation for all of the work your agency does to plan and properly buy a client’s media.  And after the buy, the agency has to reconcile every single spot or ad to make sure the client got what they paid for. It’s very labor intensive, and without the proper oversight — many agencies can lose their shirts by missing out on the commission. Back in the good old days, it was simpler because there were fewer channels, but today, it’s a very sophisticated and complicated skill, and every agency should be properly paid for doing that work. This is why it is critical that everyone in your agency understands how to calculate the commission properly using the correct rate. When (since the very first ad was placed back in 1920) an agency says they get a 15% commission, what that means is 15% of the gross buy. To calculate that, you take the net cost of the media and multiply it by 17.65%. That grosses up the media 15%. While it doesn’t sound like a lot, it adds up quickly. Let’s say your agency places $1 million in media in a year.  If you mistakenly multiply that $1 million by a rate of 15% (meaning [...]

By |

How to Catch Up on Work with the Right Systems & Processes with Terry Ogburn

I don’t know about you, but I never feel quite caught up and haven’t learned how to catch up on work in full in a long time. Thanks to my high tech Post It Note strategy (every night I list the 3 things, and no more, I must get done the next day and put it on my laptop), I get the most critical things done but there’s always more to do. What saves my bacon every day is that I have a superb leadership team around me and they have systems and processes that allow them to work miracles and keep me on the straight and narrow. Like most agency owners, I have a short attention span and it’s easy for me to get distracted. Our systems pull me back to center. Many agencies struggle with implementing process and systems. In the beginning, the system is tribal – everyone walks around, carrying the important data of the agency in their brains. By the time you get to eight or ten people, that system falls apart. As agencies grow and change, they often rely on the old system for too long. Usually something big has to fall through the cracks to convince everyone that it’s time for the next evolution of how you get your work done. Every business is made up of processes and systems, whether you have them documented or not. If your systems for teaching others how to catch up on work are informal or tribal, then odds are you and your team aren’t being as efficient or effective as you could be. You are literally trying to shove more work into a system that is simply too small. That’s where my [...]

By |

© Copyright 2024 Agency Management Institute · All Rights Reserved | Privacy Policy

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. Privacy policy

5 Mistakes that cost agency owners money.

Go to Top