Agencies stuck being dysfunctional with new business and pitching

einsteinThe recent article to Pitch or Not to Pitch  published in The Drum – misses a key piece of evidence on whether an agency should pitch of not in my opinion and hopefully your own evidence may confirm that..  Of course what an agency is really deciding is if they are likely to  win or not.

Of course what an agency is really deciding is if they are likely to  win or not. And if you are going to pitch at least know your chances of winning are good.  Of course you might need to pitch at all to win.

Before I tell you the key piece of evidence let me explain why agencies pitch even when they are unlikely to win and why they might not be able to stop.

The chances are that agencies know they need to be proactive to gain new clients. Rule #1 – Be Proactive.

The easiest way to do this is to contact marketers directly.  Makes sense, right? How hard can it be? Get a list – and get bang on it. Call them, email them, send direct mail etc.

Some agencies spend a vast amount of time and money on these activities. And often the time and money spent increases over time as they chase increasing new business targets set by management.

Quite often there is a target in place to hit in terms of quantity of meeting and pitches per quarter.  And these targets must get hit by hook or by crook and so qualifying slides or  goes completely out of the window. Targets cause dysfunctional behaviour that doesn’t best serve the agency.

In fact all pitches invariably look like a good fit when an agency target is at stake.  And most standard qualifying metrics (budget, chemistry, experience, growth potential etc) don’t help because they are easily fudged in favour of hitting the agency new business target.

So would could be done? If we look at how marketers actually buy they rarely say we wait for direct approaches from agencies, do they?  Of course not. In fact many senior marketers who have spoken at The Art of New Business events say they bin DM, ignore agency cold calls, emails and rarely use social media let alone read trade press sorry Ed.

My experience is that most marketers buy from either a referred agency that was recommended to them or they go to an intermediary for advice.

Agencies tell me circa 70% – 85% of their business comes from referrals.  So if that is the case doesn’t that mean buyers use referrals the same amount of time, QED?

Yet most agencies don’t have a method to pick up referrals. And yet over 70% of their work comes that way?  Oops.

I reckon being the referred agency on a marketers list puts you in columns A or B the most likely to succeed agency (70% -85% chance). Which is the key metric that is missing in my opinion. The question to ask actually is –  Have we been invited to pitch because we have a strong referral verses have we barged our way on and are column fodder?

Column fodder  C and  D and sometimes further down the alphabet share 15% – 30% chance between them. The columns are often required by procurement but marketers aren’t averse from getting some free consultancy too.

In these columns might be the incumbent that is getting the push and agencies that have been added to benchmark on price that the client found via SEO or an agency that barged onto via DM or cold calling maybe or even a weaker referral from a less senior person client side.

So if an RFI comes out of the blue you are likely column fodder in my experience. If you have a strong referral you stand much more chance of winning that pitch.

Agencies need to learn how to ask for referrals without being a pain! It only takes a couple of training session you know.

Posted in Marketing, Referral Marketing, Sales, sales training | Tagged , , | Leave a comment

You don’t like it, tough, go to another universe.

 

Have you ever had a well planned out idea?  One where you feel organised and in charge from the very beginning?

Well, here’s mine.  I recently bought Bob Hoffman’s book ‘Marketers are from Mars Consumers are from New Jersey‘. Buy yours here, it’s less that £6 and it’s piss funny.  If you haven’t read Bob Hoffman’s blog called The Ad Contrarian have a look here. Once again piss funny and very astute.

He don’t pull many punches baby when it comes to marketing bullshit, often in the cross hairs is branding bullshitters and digital zealots. Few escaped unscathed and I hope better for it too.

So when it arrived I thought I’ll read it with the intention of reviewing it, rather than just ploughing through it. It’s a plan of sorts isn’t it?

My plan was that I’d review just one chapter, my favourite chapter. Okay, okay, so it’s a simple plan.  What I’d do is I’d turn over the corner of the page that started the chapter that I’d enjoyed the most.  I am a page ruiner by the way be warned, my wife will never lend me a book for this very reason.

So I made it. Here I am, doing the planned review, looking at the book with pretty much every other page turned over in the corner.  I simply can’t choose my favourite chapter.  Which is annoying. And a testimony of this amazing book.  Funny. Poignant. Sarcastic. Angry. A sort of manifesto for busting the delusional thoughts of marketers versus those of consumers, which the title gives away I suppose..

Here’s the first page that I cornered, page 3 – Bob writes “Today you need to be at least a sidewalk sociologist and even better, pseudo-psychiatrist to be taken seriously in marketing today.”

In fact, you need to think and speak in ways that no consumer in the history of civilisation has ever thought or spoken.  How marketers think and how consumers think couldn’t be more different.

On Page 19 is a great example of brand babble – “Co-creating with brands and people in the Phygital (if that word doesn’t make you taste sick in your mouth what does – my add) world.  Modern consumers are ‘connected protagonists’ They are the heroes of their own stories and, thanks to technology they now have access to an audience of unprecedented size…It gets worse stroke funnier but I just sicked and laughed at he same time – Bob does that to you. 

He’s right isn’t he?  How many agency sites or creds have you read and thought – I really have no idea what you are banging on about citing some cognitive scientist work done on students? Or using made up words to elevate themselves in some way.

Bob explains why on page 34 titled – Fear of Selling. I agree, people in many agencies and client side want to be anything others than salesmen.  As the scientist Richard Feynman, who is one of Bob’s heroes, once said “You don’t like it go somewhere else, to another universe, where the rules are simpler, philosophically more pleasing, more psychologically easy…”

This is Bob’s point, he writes referring to people in agencies – “They’d rather make-believe that what they’re doing is some form of social intercourse. It makes them feel better.They are not here to sell you something. They just want to have a conversation and form a relationship.”

But in the end they will be judged on whether they sell or not, that’s business. That’s the way it is.  You don’t like it, go somewhere else. To another universe. Mars maybe?

If you don’t like the book that’s too bad, this is the way it is. Or at least it should be.

Posted in Marketing, Vaguely Interesting | Tagged , | Leave a comment

The Wason Task and new business

wasonPsychologists or Behavioural Economists as they now like to be called have used a logic task called the Wason Selection Task as a measure of reasoning powers.

It is one of those pesky little tests that ‘they’ use to prove we are not rational thinking beings. And then extrapolate from there…QED people are not to be trusted and so on.

The task works like this: imagine there are cards which always have a letter on one side and a number on the other.

You are shown, flat on the table, four cards. Their up-facing sides show

“E”, “G”, “7”, “6”

And you are told that you need to test this rule:

“All cards with a vowel on one side have an even number on the other side”.

Which cards do you need to turn over to test if this rule is true? The answer is further down the page, have a stab at it.

Most people fail at this test – 80%.  But what is interesting to me is that when the same test is put to a group the pass rate goes up to over 80% as described by Tom Stafford in his brilliant essay – What is the evidence of using rational argument to change people’s minds? He writes

“But what is often held up as a testimony to our irrationality can also be a laboratory for examining our rationality. Whilst the selection task is normally completed by individuals, you can also ask small groups to try and solve the task.

When you do this, two remarkable things happen. Firstly, the success rate jumps massively so that most groups solve the task correctly (75% or more, compared to a success rate of less than 10% for individuals). Secondly, we can observe the process of discussion that generates the correct solutions, enabling us to discern something powerful and encouraging about group reasoning.”

Firstly that is interesting to me because of the question  – What is it that new business people need to do today? Can they provide any logic in their proposal, is there any need to build an economic case for example for the prospect to change?

And secondly the process that buyers of creative services sometime go through to select an agency. The way I see it is that there are a  group of people client side sitting around a table discussing the need to change their agency.  The conversation might have occurred a few times before but no action was taken.  This time it is different.  They have all agreed on the need for change.

It is not a conversation we are privy to but we could imagine it, right? What was said, what they’re annoyed about etc, boy don’t they moan,  what do they want the moon on a stick?

So someone is sent out to speak with agencies?  Who do you think will be sent out?  And who will they be sent out to meet?  That is the issue in my opinion that agencies don’t think about enough.  They need to imagine this situation more clearly to understand their chances of winning new business.

Who has been sent to meet your agency in the past? My experience is the Marketing Director goes to meet his favoured replacement to talk with them.  Most likely they were referred to him or he loves their current famous work or met them at an event where they presented etc.  The Marketing Director then gets their Marketing Manager or another exec go get proposal from other agencies.  Agencies they are aware of because they’ve been direct mailing them, cold calling them or they find them on google.

These agencies are what I call column fodder, occupying columns C, D…. They’re needed for benchmarking – be that on price or ideas.  It’s all free why wouldn’t you go get some free consulting?

Just from that scenario above who did you think will win the business? Without even seeing the pitch or the prices who do you think will win any why?

Back to the Wason Task in experiments using this task, over 80% of people test the rule by picking the cards showing “E” and “6” and they are wrong. I am in the group by the way were you?

The correct answer is that you need to turn over the “E” and the “7” cards. If the “E” card doesn’t have an even number on the other side, the rule is false – a vowel did not lead to an even number.

Similarly, if the “7” card has a vowel on the other side, the rule has also been shown to be false – a vowel led to a non-even number.

Turning over the “6” card doesn’t tell you anything, since the rule doesn’t say anything about what even numbers cards ought to have on the other side (i.e. it doesn’t say that non-vowels can’t lead to even numbers too).

Now consider a second situation: Another version of the Wason Test

You are serving at a bar and have to enforce the rule that if a person is drinking beer, they must be over 20 years of age. The four cards below have information about people sitting at a table. One side of the card tells you what a person is drinking and the other side tells their age. Which card or cards must you turn over to see if the rule is being broken?

beer    coke     25    16

The correct answer is the cards with beer and 16. About 75 per cent of people get this one right as individuals. Why is this so when only one in four get the previous version right? How is that people are seemingly more intelligent with drinks and ages of drinkers than with letters and numbers?

It is  because of social intuition isn’t it?  It is a situation we are familiar with and we can imagine it clearly and understand the why of the test.

Back to new business when I spell out to agency owners who buyers most likely buy from which tallies with the way agencies actually get new business in – i.e 85% buy from a referral, QED 85% wins are via a referral , they can see who is most likely to win as in the new business scenario example above?  It pricks your social intuition doesn’t it?  You know who is in column A straight away – based on who went to meet the agencies and why the went to those agencies.

But if you simply weren’t aware of that scenario you’d write a proposal etc or answer an RFI  because your logic is faulty and you are not focusing on how buyers buy but how you want to sell.

Now how do we move from column fodder to column A – is there enough info in this post to know what to do? What else do you need to know? Who would know it? Or would you bail out of this opportunity?

 

Posted in new business agency, Referral Marketing, sales training, System thinking, Uncategorized | Tagged , , , , | Leave a comment

How expensive is lead generation? Stop beavering around.


I recently met up with an ex agency head.  We’d met before, when he was looking for help with lead generation. Alas we didn’t win his business then.  All water under the bridge.

However, he did tell me what had happened with his lead generating over 3 years. And I doubt his story is that unusual.

He’d met a new business agency full of promises and they worked together for a year.  He got on well with them and they worked hard, they generated over 24 meetings and two pitches but no business wins – total cost in excess of £30k.

They got tempted by another lead generating agency similar to the one before, making cold calls and doing e-mail marketing etc.  Same thing give or take – £30k cost.

One more try for another year with a lead generation agency that would also help with the agency’s positioning first then do the lead generating –  and the cost would be higher.  In fact they got less meetings and the cost was £36K p/a.

That’s over £96k in just fees not to mention the true cost of going on all the meetings and dealing with the pitches and the briefs that came their way too. Add that on and we’d be embarrassed, wouldn’t we?

Say 70 or so meetings that cost 500 pounds each, say 3 pitches that cost – I don’t know – say £20k in time each.  What’s that another £35k + £60K  = £95K and that is being kind no second meetings even added in – That’s a combined cost of £191k – how much revenues does an agency need to make that profit – 3 times i.e. £570K at 33% gp?

The truth was that most of their work, about 80%, came from referrals because they did great work and yet they had no practical system in place to get more referrals. And clients buy from a referred supplier more often than from any other source.  It is the most commonly used heuristic to judge an agency by a buyer – ‘do I know someone who already trusts them.’ It makes life so much easier.

A referral is the ‘Money Ball’ stat of new business.  We all sort of know it but rarely qualify leads by it.  If you are referred your chance of winning the business sky-rocket. You can even be a lousy salesman and still win referrals. Even a broken clock is right twice a day.

Let that story be a lesson to all of us.  Lead generating is a very risky business and often, in fact more often that not, leads to an increase in the agency’s cost of sale rather than revenues. And can be destabilising across all departments too as planners and creatives get sucked into the processes generated by the cold leads.

Agencies need to sell the way buyers buy and in the majority of cases that is from a strong referrals. Most lead generating from cold introductions just lead you up the garden path.  It is so tempting to put the rose-tinted glasses on – but before you know it you are on a wild goose chase. Go on enough and you’re down over £190K.  Agencies spend too much time as free consultants working in columns C and D – otherwise known as canon folder.

Be careful being a busy beaver and throwing good money after bad.  It’s not the sales method it’s the buyer’s system – but you may have already guessed that by now.

Posted in Uncategorized | Tagged , , , | Leave a comment

Clients need agencies with happy ears.

Somewhere there is a meeting going on. Shut the front door, no way!  In a boardroom. Wow you’re so on it today Jim.

What I am trying to say is that there is a meeting going on for sure,  but not this one I am  about to make up.  Or maybe it is – who knows – I am beginning to wonder why I even started this.

Let’s move on shall we? I am about to paint a picture of  a pretend meeting that will show you how many decisions are made when it come to hiring agencies.  Have I exaggerated? Of course , why bother otherwise?

Although it is made up to prove my point I’d like to know if you think it hold some water so to speak.

Let’s begin – Six people are sat around a board room table – it could be 4 it could be more, they are talking about one of the current suppliers, I mean partners.

It could be any of them really but let’s pick on advertising, they’re a soft target and if they’re good enough for stand up comedians to pick on they’re good enough for us.

Someone in the meeting, most likely the marketing person says something along the lines of – “Enough is enough, we need another one.” – don’t quote me on that btw – make up your own pretend meeting, if you’re going to be fussy..

Perhaps they say “I think it’s time to think about getting a new agency.”

The others continue in the conversation saying they agree for various reasons – lateness, changing account teams, no sales, blah, blah, blah. Don’t like this, don’t like that… Then the CEO, who is chairing the meeting,  says something like “Okay we are all agreed let’s find a new one.”

(That’s the important bit you see. Until they all agree they need to change for reasons they discussed in that meeting they’ll be no change.)

So what do they do next?

Well they could go to an intermediary – not un-common is it?  The Mkt Dir or CEO says I’ll get on the phone to the intermediary and book us in.

Or the discussion could continue a bit like this. Marketing Directors says –  “I’ll get my marketing manager to go meet some potential suitors?”

The attendees nod.  Then one of the c-suitors says have you got any agencies in mind already? “Yes I think so?”

“Who?” the CEO asks.

“Well I was out with another Marketing Director last week who I have known for ages in fact we used to work together and the work he is getting from his agency sounds perfect for us, so I have booked to go out for lunch with them both next week.”

Lots of nodding and smiles “Great, good luck” says the Opps guy and then the Procurement guy quickly pipes up remember protocol – must have at least 5 agencies involved. The marketer nods respectfully and the meeting ends with a chat about AOB and they leave.

The Marketing Director calls in his marketing manager and says “You’ll be glad to know that we are going to look for a new agency at last, I’ll put Mint Jelly on notice. I need you to meet some potential new agencies, cool?”

“Brilliant I have some great ideas already.”

“Really – who were you thinking?”

“We’ll I’ve been in contact with an integrated agency for over a year now they have some great work and we always get on really well he’s sent me creds, case studies, he’s called me  every other month for  year so he’s nothing if not persistent. I am sure they’d work well with us too.”

“Perfect – do you want to go meet them at their office and check them out?”

“Can I? That would be great – I’ll book them in for next week?”

“We need some more too?’

“Well I like the people who did that TV ad with the monkey and the motorbike?”

“Find ‘em and book ‘em perfect.”

“Err, I could google top ad agencies to fill the gaps?

“Nice one good old google, do them first will you?”

“I’m on it”

The marketing manager returns to their desk.

Types in integrated agency in London look at a few websites – finds one that has some experience in their sector. Eventually finds the telephone number hidden in FAQ’s and surrounded by wacky pictures of  ‘The A-Team ‘talking about their favourite fruit and their most embarrassing antics.  Apparently one of the account directors once got some toilet roll caught on her shoe. Mad.

Picks up the phone, dials and gets to reception  “Hi can I speak with Top Tim please?”

“I’m afraid he’s busy today can I help you?”

“Err not really it’s Tim I need to speak with.”

“He doesn’t take cold calls I am afraid – you can send an e-mail to info@wejustlosttheplot.com”

“Thanks but no thanks.” And hangs up.

Returns to google finds another suitor – same agency give or take just a different name and their Team had to make funny faces on their profiles – whatever. Their work looks so-so and they have some experience in the required sector too

He makes the call “Can I talk with Mister Big please?”

“Can I ask who is calling?”

“I’m the marketing manager at All Kinds of Stuff.”

“Just putting you through.”

“Hi Mister Big I am from AKOS and I have looked at your agency and I really like your take on advertising and especially keen on your work in our sector.”

“Thanks very kind of you to say so.”

“I’d like to send you an RFP – I think you’d be a good match for what we need, would you be okay to pitch?”

Mister Big punches the air and try to keep cool –  “Of course but we’d be keen to see the RFP and the brief etc before we commit?”

“Of course, no worries, will be with you next week, all the best – bye now.”

“Quickly before you go – how many pitching?

“Just 5.”

“Thanks for that have a nice day – bye now”

Mister Bigg calls an emergency meeting – “I’ve just a call from a defining piece of business – all hands on deck – let’s smash it.” Excitement ensues.  “This is right up our alley and the marketing director has already told me how much they love our website – great work Jon and Fanny on that site – and they really love the work we did for Most Stuff People Use.”

Err RFP and brief thinks the marketing manager.  I’ll just use the last one it’s only two years old add after all what has changed – we still make stuff,  we are still looking to sell stuff – job’s a good ‘en.

He moves on to his fav agency that has been romancing him for a year or so. He starts to dial reception and quickly remembers he has his direct dial on an e-mail.

“Is that you Lovely Larry?”

“It is – who is this mystery caller – you’re not showing on my caller ID?”

“Well….today could be your lucky day?’

“Are you from the Lottery?’ And snorts.

“Nope – better than that, it’s me from AKOS we’d like you to pitch for our business next month.”

“Thats amazing news! – Thanks so much!”

“I knew you’d be pleased, all your hard work has a paid off – and I look forward to meeting you, I’ll send you a brief etcetera is there anything else you need to know?”

“How many are pitching?”

“Just 5”

“Cool – can I just say thanks so much for including us we here at Relationships Inc are very grateful and we can’t wait to meet you all at a tissue meeting. bye now?’

“Bye now.”

Bloody hell he thinks – I forgot about those tissue meetings – well that’s easy enough 2 hours slots provide sushi and sit it out.

Larry goes to see his boss with they good news.

“You know that company I’ve been prospecting for a year?”

“Which one?’

“AKOS – well we’re in – we’re pitching next month – brief etc about to hit my inbox – I knew they’d come good.”

“Good work fella, fill me in over lunch.  That’s your target hit for the quarter hit isn’t it. Reckon your hit target again next month?”

“Hopefully.”

“Good job – well done – onwards and upwards.”

The day at AKOS progresses pretty much but not exactly as above as I said I am making it up.

But does any of it ring any bells so far? Taken any of those calls before? Sure you have – but does it look different now you can see behind the scenes potentially? Let’s continue –

The Marketing Director calls the Marketing Manager up and say “The incumbent (Mint Jelly) was distraught and wants to pitch too. How many agencies have you booked in so far? “

“Err – We have Monkey on a bike agency that I did by e-mail,
Relationship Inc and Mister Bigg’s ”

“Well done – so 3 and with the incumbent that’s 4  and I have one in mind so that’s 5. But can  you just get us 1 more please, just in case someone drops out, you know how procurement are these days?”

“Don’t I just! Sure easy? I’m on it, in fact I have a great one for us.”

Feeling lazy and slightly revengeful and wanted to give his favourite agency a lead he phones back that agency with the receptionist who fobbed him off earlier at Top Tim’s place..

The receptionist answers “Top Tim’s place, good morning.”

“Can I speak with Top Tim please I’d like your agency to pitch for our account I am not a cold caller.”

Cringe – “Yes certainly just putting you through.”

“Hi Top Tim here.”

“Hi Top Tim, we’d like you pitch for our account. I am calling from AKOS and me and my boss think the work on your website is simply outstanding and I’d like to  send you a RPF and a brief to pitch for our account.”

“Great news – I’ll get the creatives straight on it I know exactly what you guys need.”

“Perfect – look forward to meeting you all bye now, bye.”

“Ciao.”

Top Tim high fives himself, pick up the phone and books his fav restaurant with his lead creatives to celebrate the win. Job’s a good ‘en.

Meanwhile – the Marketing Director from AKOS arrives at the latest Tapas bar to meet his old pal another Marketing Director and his current agency’s new business director Steve from Rain-dancer’s.  After small talks – the AKOS Marketer Director asks “So my pal here says you do good work for him?”

“I like to think so.  And he told me you maybe thinking of moving away from Mint Jelly.”

“Pretty much.”

“Pretty Much? You’re not sure?

“No we are – I put them on notice already?”

“So do you think you could handle an account like ours?”

“Well you are probably the same size account as his – why don’t you ask him?” Does that laugh thing.

He turns and looks at his pal and smirks knowingly.

“I have already told him you’d be perfect for him but maybe he’d like to know more?”

“Sure – what would you like to know that Tim hasn’t told you already?”

“I guess not a lot really.”

“Can I ask you some questions?”

“What did Mint Jelly do that is making you leave them?”

“In short they are not up to speed?”

“Which means?  Delivering late?Bad account management?”

“All of the above,” And laughs

“How has this impacted the business?”

“We’ll at our last board meeting everyone was pretty annoyed with them for various reasons and KPI’s have not been hit.”

“Which KPIs in particular?’

“Sales mainly?”

“And you’re out by how much?”

“5%”

“And in money terms that is how much?

“8 million pounds”

“So there is plenty of work to do then?’

“You could say that.”

“Do you see that as a big number to turn around or a small one, ever turned that corner before?’

“It isn’t a particularly big number and yes it is doable ,if that is your question – we have had fluctuation like this before”

The meeting ambles on with business conversation…where Steve gets a low down on the business issue and the hurt it is causing our Marketing Director at AKOS (consultative selling)

So who is going to win this pitch, readers?  And why?

Have you ever been the receiver of one of the phone calls earlier in the story and had happy ears?

The marketing team are putting together a list with clear columns A – B – C – D & E right?

So who is in A column, that will share the spoils with column B about 85% of the time? You know who is in B – don’t you? Column B has got some work to do though mind – don’t you reckon?

And who is in C , D And E?  Would you know when your agency is in columns C,D or  E – would you be able to fold? What if you were chasing a KPI and that pitch helped you hit a target or earned commission even, could you turn it down then?

Do you know those three agencies (C,D and E) share about 15% between them?  We know who is the rank outsider right? No chance at all – pure column fodder.  Would he know that though?

Clients are more likely to buy from a referred supplier than any other source by miles. Mind your happy ears when a buyers calls you out of the blue saying nice things, especially marketing managers.  You maybe column fodder just to keep procurement happy.

 

Posted in Uncategorized | Tagged , , | Leave a comment

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.

Posted in new business agency, sales training, Uncategorized | Tagged , , , | Leave a comment

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?”

Posted in Uncategorized | Tagged , , , | Leave a comment

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.

 

Posted in Uncategorized | Tagged , , | Leave a comment

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.

Posted in Uncategorized | Tagged , , , | Leave a comment

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.

Posted in Mistakes in referral marketing, sales training | Tagged , , , | Leave a comment