Why we should still diagnose before we prescribe.

 (Clip features – Mahan Khalsa – Let’s Get Real or Let’s Not Play: Transforming the Buyer/Seller Relationship)

How do people make decisions?

Okay, how do we make business decisions ?

Okay, how do you get a marketer to choose your agency?

It’s not a one sentence answer is it?

I have noticed that more and more agencies are spending time implementing or talking about psychology. Fair enough you might think.

They seem to think that decisions can be influenced in a substantial way by mirroring body language, breathing rates, never using negative language, sitting in certain positions,  and in essence creating bonding sessions.  You’ll often hear in new business circle “it’s all about the relationship and chemistry” and yet the evidence is scant – see here. Blair Enns has them down as myths #4 and #6 in his top 10 of new business myths.

You’ll see it in new business job ads all the time – ‘we want some who can build relationships‘.

Do you know why they are looking for a person like that, when they employed someone good  at that about 18 months ago? Guess what happened? They fired them?  And they cited the reason as ‘the relationship didn’t work out”. Irony.  What they really mean is they didn’t bring in any business. I often hear MDs say ‘lovely person but…” And they go off and do the same thing again and again.

So what happened to making a business case?  What happened to the corner-stone of consultative selling.  The idea that your goal is make a good economic business case for them to give you their hard-earned cash? Is that old hat now?  Or is it just superfluous now?  Have we given up any hope that people can act rationally.

Has the business world decided that people make all decisions emotionally and so why even bother with a business case? Trying run that by your FD.

What happened to understanding a prospect by asking a series of questions that show you have encountered and understand the pain that the prospect was enduring be it in time or money? Diagnose then prescribe.

I sometimes ask agencies once they’ve won a piece of business be it for a new web site design, a DM campaign, and ad campaign or a PR account.  How much was it costing the prospect  in time or money with the ways things were?  Where do they hope to get to and over what period of time working with you? SILENCE.  Well I’m not filling the empty air time I’m not a DJ.

If both parties are unaware of the business case then what happens when it comes to fees?

So I ask them – did you get full fees? Again SILENCE.

Eventually they talk – “You just don’t get it do you Jim, we got on really well they had already decided they needed our services they loved our case study but they didn’t have much cash so we did a deal? FISH !

Is it profitable? I ask.

It’s okay? They say.

And you set out to run an okay agency? I say.

The problem is they failed to diagnose so ended up being commoditised.

Relationship selling is not just bad for an agency’s coffers it is also a down graded view of humanity.  It is supposed that people get upset very easily. They are victims who will get easily put off by the slightest comment or facial gesture that disagree with the chemistry gurus and soft skill teachers.

They can’t handle you doing your job and attempting to build an economic case and help the prospect see if they do or don’t need your services.  The assumption is that prospects are weak and easily disturbed so we best just get on with them instead, creep, creep, creep. That says more about the seller than the prospect – how’s that for folk psychology 101 ?

Consultative selling is great at helping you make a business case for creative services but there is no reason why it can’t allow you to get on well too.  By understanding the business case you should notice that as you start to walk in their shoes you stay in rapport.

Rapport often related to bonding is actually different.  Rapport is a state where both parties are comfortable talking about tricky subjects – like money and awkward business concerns.  Prospects rarely come to agencies when things are looking dandy.  How many times has a prospect come to you and said our agency is 9 out of 10 we just wanted to find Mister 10/10? Never I’d wager.

Relying on relationship building skills is a sure way to end up being a free consultancy or at the best a poorly paid one.

Behind consultative selling techniques is in essence a search for the truth. And although the truth can hurt it’s valuable.  And telling it sometime is not easy but that is a more valuable part of a new business person role that relationship building IMO –  Honesty is a very expensive gift. Do not expect it from cheap people.” William Buffett.

Do prospects make decisions solely on the economic case – No – but it has to be there.  If it isn’t you have no leverage to negotiate with – you have no understanding of their business and you have no way to write a ‘decent’ proposal either. You’ll just end up selling a solution where there is no problem.  You’ll be pricing as a commodity.

In general I believe that people make decisions in a rather idiosyncratic way – they decide based on loads of factors and there will be some things that you will never uncover even with the best consultative selling questions skills.  There are things that the prospect experiences in their particular workplace and home life that are specific to their experience that only relate to them. You won’t find it.  And they will unlikely tell it to you anyway.

People live their life surrounded by un-written rules and beliefs that affect the way they make decisions.  That is why agencies I bet employ so many extroverts – they look and behave like they are full of passion and energy – isn’t  that what clients want to see after all? Isn’t that the unwritten rule – be full of energy, smiley and full of passion at all times?

However today agencies are fired faster and faster than ever before.  The IPA reckons 2 years and 7 month is average tenure.  So much for employing people who are good at bonding and forming a relationships then?

Don’t throw the baby out with the bath water here folks.  There is no reason not to have manners and be able to ask a tricky or awkward questions in an understanding way.  My case is not that you need to become a robot, far from it.

In fact my case is that we need to become more human.  And within that finding out the truth about a prospect’s business situation and being brave enough to tell the truth over faux relationship building  and chemistry skills. Do it well and you stand out as someone to do business with, especially as nobody else will be doing it well.

Even as people’s decisions making abilities are so idiosyncratic even in business making a well thought out business case is still a key skill a new business person can have.  Yes the prospect will make their decision their way based on some factors we hardly ever thought about asking.  But as we are doing business, on average a very good place to start is to make the business case.

Or is it?

Today prospects seem to come to agencies so late in their decision-making process.  Often a team of people have sat down and said enough is enough we are getting a new agency.  Perhaps they have already made their own economic case?  They have probably even looked over competing websites and case studies.  So by the time they come to meet you what is the point of making the economic case.  They’ve already done that right?

Well consultative selling skills is like a test drive.  It is a free example of how you do business.  It shows you understand their situation.  You may even spot things that change the business case based on your expertise? The reason for being good at consultative selling – asking questions to fully understand the business requirements shows that you can be trusted and that is the key ingredient in my opinion the prospect is looking for, They have a selection of creative agencies but which one to trust?

Well the easiest way to trust someone is to get a referral because when  you are refered you are piggy backing on the trust that already exists between two people.  If your best client introduces you to another marketer who they know very well (4 years plus) – when you arrive you are carrying the referrers level of trust in your pocket – so don’t mess it up.  Don’t ruin it by not carrying out consultative selling that elevates you further as be trustworthy and also make the prospect understand your fees.

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Can’t you see we are busy!

squarewheelsIn my piece about new business programmes being largely dysfunctional I mention that the problem is the unwritten rule that an agency must be proactive.  Which is Steven Covey’s Rule #1.

I wasn’t saying don’t be proactive but think about your proactive activities.

Agencies in my experience tend to choose the easiest proactive activities imaginable for their new business programme i.e. e-mailing, DM or cold calling a wish list.

Easiest in terms of setup time,  from zero to prospecting in no time. And easiest in terms of skills and bravery. Not hard to e-mail a few people a case study, is it now.

When in actual fact most (usually around 85%) of an agency’s new business come from referrals and yet they rarely have a  organised method in place to capitalise on this.

Agencies rarely have a systematic way to integrate client serving methods with requesting referrals. Despite that making sense If most of an agency’s work comes from referrals we need to get more referrals then don’t we? Because great referrals come from our best clients don’t they?

Without referral there would probably be no agency. And if you continue to neglect requesting them…I’m just saying.

Just compare the cost of referrals to your largest cost of sale which is meeting tyre kickers and pitching for new business when we have squeezed onto a pitch list and then lose.

Not to mention the cost of the hiring and firing of new business people over and over.  Hire them, be proactive in the usual ways, fire them because it failed. Get a new shiny one, polish the wish list, hit them again with DM, watch it fail, fire them…That’s dysfunctional you’re just chasing some KPI that has been set arbitrarily – we must get 3 meeting per month etc and chasing your tail before long.

New business people are good people – very good people –  smart – intelligent – they are just too frequently put to task on the wrong activities. They are hoping to get lucky, the MD is hoping they’ll get lucky too. When they don’t they fire them or they quit and then the agency does the same thing again. And the new business manager goes onto their next new business role clutching their four-leaf clove.

Of course we can add to this proactive list lots of other things today (there’s me being old-fashioned) be it social media marketing activities that take time and resource but generate very few ‘winning’ leads. Maybe a few leads but do they close?  Are they worth it? Time will tell I am sure.

The issue is not the new business person it’s the marketing system.

So Coveys rule #4 is worth mentioning he calls it –  ‘sharpen the saw’. He tells a story of a man in a forest cutting down a massive tree.  A passer-by interrupts the lumberjack – “Wow that looks hard work how long you been doing that?”
The lumber jack replies “5 hours and I am beat.”
“Wow, you must be ,why don’t you stop for a minute or so, catch your breath and sharpen the saw. When you start again I am sure it will be easier to saw that tree.”
The lumberjack impatiently replies “Can’t you see I am busy using the saw, I haven’t the time to stop at the moment.” and then he carries on.

Here is Steven Covey telling the story.

This is what agency new business programmes sometime suffer from.  Agencies get run ragged by their new business programmes.  The cost of which get completely out of control – what is your agency’s cost of sale, dare you look?

Yes, you need to be proactive, it is rule #1 after all but choose wisely how you spend you time and it won’t be the easiest or most trodden path that works best.

Let’s face it thousands of agencies are banging out DM pieces right now to the same wish list as you are. Then you are all following up with a cold call. You need to be braver and more thoughtful and add to your skills the ability able to ask for referrals comfortably within a client servicing programme as a priority then add selectively other proactive activities.

Abraham Lincoln – “If I had 9 hours to chop down a tree I’d spend the first 6 sharpening my ax?”

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Try to see it my way. We can work it out.

The art of conversation is becoming underrated in new business today – which is great news for some of you who still value it.

I often sing this song in my head before a sales meeting.  It reminds me I need to see it their way first.  Then and only then perhaps we can work it out.

You should find yourself saying ‘we can work it out, can’t we?” a lot in new business.  They have a problem after all, right?  If it was easy to solve they’d have solved it already with their current agency maybe or internally.

So to see the problem their way – you need to ask questions. I think must people in new business get that. Problem is you all sound the same asking the same old questions.  Good questions get to the heart of the problem not skirt around it.

Let’s deal with it head on – they are trying to find an agency that wasn’t like the last one. Agreed? Isn’t that what they are trying to do?  Bring it up I say. Bring it up early.  You’ve just bought some credibility I think.  You just said I now what you have to do. I understand your role.

And how are they going to do this search?

Well, chances are they will do some combination of RFI, RFP, chemistry / tissue meetings, creds meetings and pitches?   Agreed? That’s what it looks like to me anyway.  But isn’t this how they choose their last agency, give or take? The one that’s now defunct. The one that they are giving the old heave ho to. The elbowed one?  The one they sent the Dear John letter to citing a break down in the relationship? Not that one surely? I’d bring that up if I was in your shoes Mister New Business person.

Isn’t it a part of your role to stop marketers making mistakes that are career limiting?  Do it sincerely and not like you are trying to get your rocks off by showing them up. But by asking if it makes sense to them? Or why wouldn’t the same mistakes happen again?

“Considering you most likely used these methods to pick an agency last time what makes you think it we will work out better this time?”

Isn’t that better than asking – how many people are you giving the RFI to or how many are pitching?  Suppose the answer you get are too high you know 6 or 7 etc – then you’re out right?  How about staying in the game and saying the whole process is questionable?

Let’s go further – How about asking “When I find myself in this situation where I am considering pitching I always remind myself of that last time I did and remember that the marketer I am talking to usually has a favourite agency he’d like to appoint but is forced to pitch by procurement to gauge market prices – is that what is happening here?”…”What stops you just appointing your favourite agency based on their previous work, how they understand you and of course chemistry?”

At some stage they’ll tell you it is process that makes them behave this way.  But if we have already shown the process is at best fallible and at its worse the road to insanity.  “And what happens if you end up here again in less than two years or will you be gone by then?”

However, maybe, just maybe, we can work it out? Life is very short for fussing and fighting my friends.  No need to fight but lets at least be straight with each other.

 

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Is this what your new business programme looks like?

 

New Business Programme-1(Click the pic to enlarge in)

Is this what your new business programme looks like, give or take?

Quite crammed isn’t it, wouldn’t you say like, quite crammed isn’t it? Quite crammed I say, what do you reckon now? Crammed? I’d say it was.

So where should you spending you new business budget?

Maybe you should look at where most of your new business comes from instead of guessing.

Or doing activities because other agencies are.

Approx –  85%% of agency business comes from referrals, that’s the green stuff in the mind-map.

Yet agencies spend most their time and resources on the other colours. They still have value by the way but evidence show that they are less successful than getting referrals.

Anyway at least you’re busy, right. Nothing like being busy is there. We call than being dysfunctional where I come from see here.

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The Homer Simpson loop for (agency) new business people

I heard it said on linked-in last week that the demand for new business people is about to rocket, it was on linked-in so it must be true right?  Oh and a recruiter said it too, let that be proof if proof be need be.

What I wonder is will the agencies looking for yet another new business person make the same mistakes as last time?  Of course some will say “what mistake?” We don’t make mistakes here, how very dare you Jim.

Well, did you or did you not employ a new business person in the past for about 9 to 12 months then have to ‘let them go” because results were not forthcoming?  Yes, yes you did.

And nothing unusual in that at all is there? It’s the norm in fact. But could it be avoided?

For the record I have been let go in the past too, in fact way more than once.  But I think I can now see why. Maybe you’ll agree, maybe you won’t, let see if this rings any bells.

The reasons you gave last time for that new business person (who you loved when you hired) not working out was something vague like “not quite working out, or tried hard but, but,but or didn’t quite understand our offering” or something that pretty much lets everyone (including you) off the hook for hiring them. Because all of these things could have been picked up at interview stage, no?  Why else interview? So how were they missed?

However, the biggest mistake you are most likely to commit – just like last time – is to employ someone just like the last person (give or take) and set them the very same task using the pretty much same methods and wonder why they pretty much failed too?  You can play the ‘this time is different’ card but in all likelihood it isn’t. What’s changed? In reality nothing.

You will give the same resource and empowerment (yeah right) as last time.  It will go something like this.  Put together a wish list of brands we’d love to work for, you can make it as simple or s complex as you like, however that it was it is – a wish list. Gold, silver and bronze prospects, ring any bells?

Then you’ll send them stuff in one form or another, right? A DM piece or an e-mail with a link to join your agency mailing list.  Just like the last person did.  You may even chase up with a few cold calls.  You may even have a new proposition who knows.  But will results change? Granted you’ll get a bit more SEO savvy and blog heavy too.

The way agencies tend to grow historically is a  mixture of incoming referrals and incoming cold opportunities.  But we know empirically referrals close circa 85% of the time and colds close 6% of the time and some never close at all – no decisions etc.

So a new business person looks great when referral opps come in compared to cold opps but this is just luck, right? If you are the new business person when the referrals come in you’re made and if you are unlucky enough to just pick up the cold ones then the likelihood is you will fail. Because you spend you time chasing those prospects like a headless chicken wearing rose tinted spectacles on a wild goose chase. Admit it, we’ve all done it.

Problem is that the opportunities come in  higeldy piggeldey not normally distributed and agencies don’t qualify by how the leads come in – and they should.

Typically they still qualify the old way e.g. by spend or if the decision makers is involved or if they have a brief or if your agency has relevant sector experience, if the prospect said nice things about their work / website etc..

In all likelihood all those boxes get ticked because why else would they have sent you the RFI / brief?

And they need you on the list to keep procurement happy – them’s the rules today, they must have 4-5 agencies per project even if they know who they are going to use and you maybe just cannon fodder. Vendor beware!

And of course you as a new business person is delighted because you hit a KPI and that keeps your boss off your back at the next pipeline status meeting and the new business functions now looks functional. Phew!

Agencies love proxy KPI’s – quantity of e-mails/ DMs – qty e-mails opened, qty or RFIs or RFPs, qty of briefs, qty of meetings, qty of pitches. So you cant blame new business people for hitting them by hook or by crook.

So if referrals and cold leads come in and are not identified as different qualitatively because of their statistical close possibilities and they don’t come in equal measure what happens is this –  depending which leads the new business person picks up randomly, referred versus cold, will determine their success rate way over and above what you asked for in you job spec. Typically being passionate, determined, GSOH, team player, experienced at working in agencies, good at building rapport and relationships and so on will have less impact then the qualifying criteria.

So the mistake that looms for agencies now is whether they can move towards qualify leads by strength of referral over the typical metrics and put in place methods of marketing that are supported and guided by referral qualifiers. Or they will fire and hire again and again till one gets lucky i.e. hits a run of referrals.

For example as we have spoken about many time on the blog is your current new business person given access to all your clients to ask for referrals or do they monitor all the client facing teams progress on asking clients for internal and external referrals?  Most new business comes in via referrals and yet having no method in place to capitalise on this is bonkers / dysfunctional and it’s so easy if you dovetail it will client servicing protocols like NPS.

Direct marketing is the same – instead of looking at wish list brands to DM instead looking at who your current client knows on linked-in for example.  Then send an e-mail to the new contact quoting a reference from your current client.  Doesn’t that make more sense?

Because if that much needed prospect calls in as a referral you are more likely (85% ish)to close that business than the cold one 6% ish) and yet agencies spend the exact same time, money and heart ache with each.  But you need to repeat the same process with the cold one up to 16 times.  And in my experience the cold one gives you the run around far more because there is no trust there like there is with the referral.  A referral transfers trust and that is what business relationships are built on.

So do you think agencies will make the same mistake when hiring new business people? Will you?  Time to be smart this time? Of course it is.

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New Business / Splitting the Atom

atomDo you know how physicists split an atom?

No, me neither,  That is why I have wisely used that analogy to talk about how agencies can find more clients.

Of all the hundreds of agencies that I have worked with over the last 12 or so years one thing stands out. And that is they all told me that the majority of their work comes from referrals, often 70-90% of it.  It is often the way the owners set the business up in the first place.

Many agencies are set up the good old fashion way, where two or three people nab a client or two do a sneaky deal, jump ship and hey presto new agency with two clients on-board in no time. Ring any bells?

Then over time chance referrals come their way.  Sometimes their client often a Marketing Director leaves their employer to work elsewhere and bring their favoured agency with them.

Sometimes a Marketing Director tells another that is not in the same sector as them about his preferred agency, then a meeting ensues and hey presto we got ourselves another one.

So in a way (wish me luck I am going in) that person who moves around and gives referrals is like an atom.

That atom (person) pays the agency money but also he has a referral value too. So the true value of that person (atom) is how many referrals they give you over time that you close into business. The higher that value the higher its atomic value. Great referrers are like plutonium.

Like plutonium they are valuable and need to be looked after because they are so full of energy (referral value).  Unlike plutonium they are not radioactive or that hard to find. You probably have at least three under you nose and you don’t even realise it. I repeat they are not radioactive so worry not.

If an agency traced where all there referrals and work came from they may find that one to three people (atoms) have supplied all their energy (referral value).

If they now compare this cost of sale which is negligible to all the time and cost they have spent on direct marketing, going to events and what not it is truly depressing.

Noticeably some atoms split on their own i.e. they move around a bit to other jobs and bring you with them or they tell others about you on occasions, releasing more energy your way.

But what would happen if we consciously tried to split the atom?

What if we realised that the value of our client is not just the money they spend with you per year but also the people they know that they may be comfortable introducing you to.

If you look at your current client list and then work out how many atoms – I mean people – you know across all your clients, then we get an idea of their mass and we know that E (energy)= mass x speed of light squared right?  We might not need the speed of light bit granted, but hey.

So to release the energy from that mass we need to ask for referrals face to face – or we can wait and wait for the referrals to occur naturally.

What I am suggesting is that if you continue to do great work for a client they may move on and take you with them.  You may of course have issues dealing with the incoming marketing director but by and large agencies in my experience an agency grows when people move around not always of course but largely.

But also that if you learn to have conversations with your best clients about who they’d feel comfortable referring you to we are shaking (gently) some of that energy out of them.  We are splitting the atom. Phew –  I made it, well sort of.

Luckily asking for referrals is not nearly so complex, although to some it takes a while getting used to.

The truth is people rarely mind giving referrals if you make it easy for them to do so and you ask nicely and sincerely. By being clear about who you’d like to meet and how they can help facilitate it effortlessly.  They don’t want have to go into deep thought to do you a favour of a referral – they don’t want it to be particle physics, they want an easy process.

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Can you reason someone out of their beliefs?

Sam Harris makes an interesting point here – that people often prefer to change their mind in private. Rather than do it when they are face to face with you.

This should be interesting to new business people.  If you are face to face selling and you spell out a contradiction in the prospect’s current thinking, don’t expect a certificate for your efforts there and then.  Understand that they maybe uncomfortable with what you had said.

As is noted in this video on Aristotle you may find using wit and humility to bring them out of their discomfort, saying for example something like – ” Hey, everyone gets un-comfortable when I tell them that.” Or when I show them the true figures or hint at a contradiction in their thinking…I sometimes wonder if I should do it at all?”  Or “I think you took that quite well, the last person I told that – kicked me out!”

You still have to be brave enough to spell out the contradiction in the first place most new business people don’t have the guts to do this.

However, if you are brave enough to speak the truth,  you also have to mop up the atmosphere as the vibe can be sucked out of the room. Kind of medicine then sugar I think.

Interesting to me is that people do this very ‘naturally’ in most of their lives but when it comes to business dealing they stiffen up. If they give a friend a home truth and they can see them cower they then mop up a bit.

To answer Sam’s question who hasn’t changed their beliefs over the years?I shudder when I think of some of my beliefs last week let alone those I held growing up.

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Which virtues do new business people need?

Aristotle noted that virtue sits between two vices and to be persuasive one should have the right about of certain traits.  I reckon these traits that need to be practiced and taught would benefit new business people in agencies. For example you need to be courageous but not fool hardy. Witty but not a buffoon.

Aristotle lists 11 key traits as courage, temperance, magnificence, magnanimity, pride, patience, truthfulness, wittiness, friendliness, modesty, righteous indignation. Looks like I have some work to do. And that’s the point really. You have to keep practicing.

To be persuasive in rhetoric Aristotle noted that you have deal with the emotional side of a problem as well as the rational, you need to be witty and you need to use examples to make your point.  Sounds pretty good to me. Sounds like selling. No point humiliating (Socrates style) the person you are in conversation with and similarly no point in agreeing when you don’t. It takes skill and patience.

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The dysfunctional new business system

dysfunctionalWhy do agencies use the same practices over and over for new business despite the evidence that says it doesn’t work? Well not very well at least.  Let me put forward my main explanation.

Chances are in my experience that agencies  know they need to be proactive to gain new clients. It’s  Steven Covey’s Rule #1 – Be Proactive,

The most obvious way to do this is to contact people (Marketing Directors) who they know buy similar services to theirs.  Makes sense, right? How hard can it be?

How do we do that though?  Well, lets put a list together of potentials brands, which brands would we like to work for right?  The list get procured and even cleaned maybe.  Then the decision is made to DM them a thought piece or a case study showing their value to the receiving marketers.  In short ‘we did this for brand x – we could do the same or better for you’.  Then follow-up with an e-mail or phone call.

In short the agency is asking – How about it then?  We look good don’t we?  We maybe be better than what you have currently… so  let’s meet.

All very reasonable you might say, right?  This is what we do, isn’t it?

But if we look at how marketers buy they rarely say we wait for direct approaches from agencies, do they?  Of course not.

In fact my evidence is that most agencies buy from either a referred agency that was recommended to them or they go to an intermediary for advice.

Note that most agencies say their clients come from a referral. So ‘they’ buy like that and agencies sell like that,  albeit unconsciously to some extent.

But even before a marketer and their team look for a new agency they ALL  have to agree something is broken. Something is not quite right isn’t enough, it has to be broken. Because if it isn’t they will find a work round or fix the issue internally.

This is because the system is sacrosanct.  A system (group of working people) is largely made up of written and importantly unwritten rules and beliefs that makes them carry on behaving in a particular way even if dysfunctional.

Because to change the way they go about working would contravene the un-written rules and beliefs of the system.  No change occurs until everyone in the system sits down and communicates that the system is broken and they need outside help. Until this has happened things stay the same.

A sure sign that the system prefers to stay dysfunctional is when people say stuff like “that is how we have always done it!” or “I have seen it worked before” or “others do it like this too” or “we are going to try it one more time” or “this method is easier to set up” or “if we change this then we will also have to change abc too” It is worth noting if one thing is a system changes then other things change too – changes are consequential!

So even if you meet a prospect and they see you as sliced bread, unless the people in the system agrees it needs a fix from outside and not inside it stays dysfunctional or at least settles for not being more effective than it could be. This kills sales people, I can save them x or make them x and yet they wont change! Ring any bells? Annoying isn’t it?

Being dysfunctional is not unusual you know.  And it is fine, in a way, we are all a bit dysfunctional with cognitive dissonances for example.  Individuals continue to do the practices they need to really stop right up until they get a kick up the pants from a loved one or a doctor, right?

And agencies are the same.  They can see the evidence that most of their work comes from referral (80% seems the average) and yet they have no method in place to get more referrals.  They prefer to hire and fire new business folk constantly, who spend their 18 months tenure being pro-active doing DMs e-mails and cold calls.

They spend a disproportionate amount of time and money on these activities not to mention the cost of meeting the tyre kickers that DM brings in. All to make sure they hit their meeting quota. The way to build DM lists should be based on who your current clients knows but that is for another day.

They’d rather do this than asking their current clients for referrals which is the #1 method by miles and miles (over 10 times more effective) that marketing directors use to choose their agencies.

But why?  Well, because agencies have proxy KPIs like all businesses do. You won’t win a piece of business if you are not proactive remember.  You need to approach someone, they need to agree to meet you, then you have to jump through some hoops then you pitch and then you win or lose.  That is the process give or take, right?

Problem is that the agency sets KPIs to make the process goal driven. For example we need 4 meetings a month and 2 pitches a quarter. We’re being proactive , right!  So in that process there is a new business team or person (perhaps you dear reader) doing all they can to hit a target.  By hook or by crook those numbers need to be hit, if not the new business person is in the firing line.

If you haven’t ever been in the firing line well done you.  Most of us have felt that pressure – so we chase harder we spam more and chase even harder to make these numbers by any means necessary.  Quality of prospect goes out the window and the KPIs become sacrosanct because that is the system.  The system is now brilliantly dysfunctional. And you’re trapped in it.

It is not until the agency is willing to put down tools and look at how marketers buy, largely through referrals that they may even consider changing.  It is not until they tot up the full cost of being proactive via direct approaches that the sting may cause them to change and get outside help.

Until then they will keep doing the same old, same old, round and round because the rules of being proactive via direct marketing and chasing the goals that have been set arbitrarily are institutionalised. “That is just the way we do it.”

Most agency systems are kept dysfunctional by the people at the top because they don’t have to do run the new business programme. Clearly they want them to work but they have no skin in the game to actually run them. New business is a silo activity in some agencies.

Yes the C-suite they run the meetings where the new business team get a bollocking or a gee up but they don’t have to chase the prospects do they? They set the targets and move them when things are getting tough, who hasn’t had the conversation about the need for more meeting or more pitches?

To implement a referral marketing programme agencies need to make considerable change.  The programme will re-assign those in the new business department to different roles.  The programme will involve those at the top of the agency structure so they have skin in the game too, ouch!

Also the programme increases the chance of winning new clients so more pressure is put on recruiting new team members who actually do the work.  Using the qualifying metric of ‘are we referred’ instead of do they have budget and do they look like a great brand (they always do) will likely mean not hitting your current meeting or pitch KPIs but it will insure that when you are referred to the marketer and their team they have already decided to change.

They have already decided their system is dysfunctional and have decided to look outside their system for help. And you will be in the front row to win the business.

 

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What is a MOOC?

I am currently doing a MOOC. What is that you say? Yep a MOOC. It stands for Massive   Open Online Course.

I am doing my via a company called Coursera, you should take a look.

I have been pleasantly surprised by the quality and vigourousness fo the course and have changed my mind to so degree about on-line learning.  I was very sceptical But I am less so now.

The course I took was called Reason and Persuasion – Thinking Through Three dialogues by Plato and it was run by The National University of Singapore.

So we have been reading Plato.  Which as you may know already is really reading about Socrates in dialogues with other characters.

Much of the focus as always with Socrates is what is good. Or what is virtue or what is holy.

In ancient Greece many things could be considered virtuous if they worked well.  So a knife that cut well would be virtuous because it was good at its purpose. A good doctor healed the sick and so on.

And this got me thinking about agencies?  If you are to be good, then you must be good at your purpose, right?

So what is the purpose of an advertising agency?

Socrates has a conversation in The Republic about what it is to be just. Is a just man a good man? Surely.  And doesn’t any skill require a man to be just? Surely.

Is justice a proponent of being honest and to be honest don’t we need to have a degree of critical thinking? Surely.

I think this is what ‘advertsimg has lost today it sense of purpsoe and it’s relationship to honesty because it lacks critical thinking. It’s purpose today, reading many agencies websites are nebulous at best and deviate from purpose.

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