For most agencies, growth is a priority. There are certain tools that business development reps can use that will maximize the time in their already very busy schedules and tips that will help them build new and stronger relationships with prospects. However, there are still three other challenges that they must take into account first.
3 New Business Challenges
1. Market changes and shifts
The term, market shifts, can also be referred to as the impact of outside forces because this is the case where you, as an agency, didn’t necessarily do anything wrong, but the market changes impacted your relationships anyway.
A prime example of market shifts is within the auto industry. The headlines over the last year – some are good – show how the health of this industry is changing and what exactly is impacting it. Still, others, leave us completely lost. Some example headlines are below.
While following the news on key accounts you want to win is important, it is also valuable to look at the numbers. Currently, our economy is strong and that is flowing into auto sales. Over the last four years, auto sales have increased 3% annually. See the visual depiction in this graph:
However, you need to understand how the market is impacting advertising spend. In the case of the auto market, annual spend estimates across digital and print have steadily decreased. This is important to know if you are getting ready to pitch an auto brand. This doesn’t necessarily mean that all ad spend is down, just that the industry’s presence in traditional media formats is; it’s still running in new and emerging media formats like Snapchat.
2. New decision-makers
Shifts in market, whether good, bad, or plain confusing like the earlier headlines, often lead to changes in decision-makers. Greg Welch, a consultant in Spencer Stuart’s marketing officer practice, told The Wall Street Journal that the challenges facing chief marketing officers (CMOs) are the “perfect storm” – with challenges coming from “tough business headwinds, new technologies and pressure to change quickly”.
Over the last year, we saw the average tenure of a CMO increasing slightly, by two months. The average is up two months and the median is up by four. These aren’t too substantial in terms of ensuring agency partnerships. CMOs also continue to turn over faster than any other role in the C- suite (see below chart for reference). As we all know, with new leadership, comes changes in strategy and, often, new agency representation.
While the average tenure of a CMO is 3.5 years, the average agency-client relationship is even less: 3.2 years.
Side note: even 75-year-old business relationships can be lost in a matter of months! This timeline of Ford’s account in review is an example.
3. New business doesn’t come fast enough
Many agencies use what we call a reactive strategy. This means that the prospect is coming to you with a request for proposal (RFP) and, then, the person that handles new business will follow up and submit a proposal. There are pros and cons to this, like any strategy. When an agency is reactive, it means the request is coming to them. Usually, when someone requests to talk to you, there is a greater chance that they want to work with you. However, this is putting your business at the mercy of a prospective client.
A more proactive strategy can help you control your own destiny. Proactive agencies have a new business team that is determining which brands they want to work with, understanding that brand, nurturing a relationship, and building trust. However, this method can be perceived as more aggressive.
Whichever strategy you choose is up to you, but be sure to know key information about your prospects’ business before you contact them. This background will help you build trust and just as importantly, it will help you earn their business.
5 Things You Need to Know Before You Call
1. Know Your Key Players
Seems simple enough, right? But, as we all know, easier said than done. There is high turnover rate in key marketing roles, but knowing who the key players and influencers are in the decision to switch agencies is necessary. Accurate contact information will save you tons of time pitching the wrong people.
2. Ensure Your Call is Timely
Make sure you are calling people at the right time. While reading news about your prospective clients is helpful, it can also be confusing. Other key indicators of when to pitch are seasonality and peak spending. In the case of Ford, they peaked in quarter four (Q4) overall, but Q1 showed the majority of their TV spend. Once you know when a business spends the majority of its budget, you can work backwards to determine when you should make your first contact with it.
3. Review Their Brand Messaging
One of the easiest ways to determine if your pitch is pushing your prospect’s “hot buttons” is to review its recent creative. You want to know which media formats your prospect values, as well as what is the tone and messaging of its ads. TV and print ads can often be googled.
4. Understand Their Ad Investment
It is also valuable to know how your prospects’ advertising spending is changing year over year (YoY). Get a spend breakdown. As we noted before, Ford has decreased their ad spend in print, TV, and digital. It also appears that their digital advertising is getting more targeted, as they began to market in Snapchat over the last year.
5. See How Budget is Distributed
Studying your prospect’s recent multimedia campaigns and product lines will help you understand its position and offerings. Ford, for example, is running unique creative across multiple media formats, including TV, online, mobile, Snapchat, and email. Knowing that Ford chose the new media advertising option, Snapchat, shows its propensity to be an early adopter as well as the value of Snapchat’s young demographic to certain Ford models.
Despite the challenges with developing new relationships, there are certain things agencies can do before contacting a prospect to build trust and earn business. So, why wait any longer? Start implementing these tips into your strategy now.