Challenging the 80/20 rule for agencies.

NBD graphAbove is typically how  an agency’s clients are distributed.  It is a negative binomial distribution (NBD), sloping down from left to right.

It is what Byron Sharp in his award-winning book How Brands Grow found to be the distribution of buyers of consumer products and I think it is likewise for agencies.

I want to explain here how this simple model applies to agencies and how to increase agency revenues from understanding this model.

Just to avoid the ‘so what’ conclusion, lets look at what is to be done, and why is it of use.

In short Sharp says that a brand has very few high spenders, for example in 2016 there will be a few (crazy) people who drink 3 cans of Pepsi every single day so consuming 3 x 365 = (1095 p/a).

At the other end of the scale there will be lots and lots of lots of people who don’t drink any cans at all in 2016, zero cans (0 p/a ), but may drink a can next year, they are still customers they just didn’t buy in 2016.

And then there are those people who just drink one can per year (1 p/a) and in the middle the consumers who buy say buy one can every six weeks or so, (9 ish p/a) and so on all down the curve,

So the curve slopes down from left to right (NBD). Part of it maybe flattish special as it tails of towards the high users.

The conclusion is double jeopardy that states  – ‘brands with more market share have more buyers, and those buyers are slightly more loyalty.

And retention double jeopardy – brands lose buyers in proportion to market share (big brands lose more in absolute and less in percentage terms).’

Sharp Challenges Pareto’s 80/20 rule

Historically the perceived wisdom was that 80% of a business revenues came from 20% of its client base.  In fact when Sharp looked at the evidence it was nearer 60/40 or 50/50 as Martin Weigel from W+K explains very well here.

The point is light users are far more important that we’d thought.  They were only 20% important but now they are more likely to be 40% to 50% important.  That’s 100% plus important.

So when a leading brand draws their NBD graph and a challenger brands draws theirs – it is in the low spend area they differ (most) greatly.

The leading brand has a huge amount more of light or occasionally buyers.  The difference in heavy users is there too but not as pronounced as the difference in light users.  So what a challenger brands lacks is the light and occasional users that a leading brand gets in.  So they need to target gaining more occasional and light users.


Agencies tend to have a similar distribution (NBD) many low spenders and few big spenders and of course some in the middle.

Low spenders are in the green section of the above graph.  The agency has a low point of entry for a new client and the goal of the agency is to develop the business into a medium spender.

Low spenders will come from referrals into the agency from other low spenders and some medium spenders and from new business channels, where a low point of entry is sold to get the client on-board.

Medium spenders are in the orange section of the graph.  The agency will have less of these than the low spenders and they will come from business development moving a client from a low spender to a medium spender and referrals from other medium and high spending clients of the agency.

High spenders are in the red section of the graph.  The agency will have very few of these. This is the prized destination for all the agency’s clients.  Of course not all of them will make it there. Some will stay stuck at low of medium spend and some will die (leave the agency) before their time, sad but true.

More high spenders may arrive from referrals from their current high spending clients. The two easiest ways to get a high spending client is to move from orange to red or get a red to come straight into the agency.

Low v High

The interesting point that Sharp makes when talking about consumer products is that the difference in the curve of a leading brand and a challenger brand is the difference in the quantity of low users more so than the difference in  high users.

The leading brand will have significantly more low users than it’s competitors. The curve will move slightly to the right, in other words outwards.

There maybe a difference in high too (i.e. slightly more high users) but the vast and significant difference is the occasional users who can then move down the graph to the medium and high zones.

Is it the same for agencies?   Well, yes I think so .

The quantity of new prospects that an agency can get on board with a low entry price point is key.  Then to move them along the graph, low, to medium, to high.

Then to get referrals from current clients as and when they are in the medium and high spending zones. So some new business comes straight into the medium and high spend zones without having to go via the green zones.

Double jeopardy in agencies –  in short a smaller agency is effected far more from a loss of a current client than a large agency, no shit Sherlock and the difference between a large agency and a small one is the quantity of low-level users.

The other interesting finding of Sharp’s when dealing with brands which is of use to agencies is that of ‘Usage drives attitude – not the other way round. We grow to like what we use. Call it the “I love my mum” syndrome, which explains why all brands get good ratings in satisfaction surveys.’

So the goal of an agencies new business programme is to get marketers to love (rate highly) their agency by using them, even if at the low-level green entry point, rather than marketing their agency as the one they’ll love so they should use it.

In short – low entry point for prospects – do good work – get referrals – have a low entry point – do good work – get referrals… and move the client from green to orange to red where possible and keep prospects coming into as higher spend zone as possible via referrals.

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ROI in new business – don’t be fooled by randomness.

gold fish bowlI’m trying to show agency owners the problem with being proactive with new business via telemarketing and direct marketing that can end up with them being fooled by their own numbers..

This is not an article about how you should improve the creative output of your agency to increase your chance of winning more new business, although you should. In fact it should be top priority.  Doing a piece of work that makes an agency famous is the best new business tool ever. How often do you see that on a new business strategy document? Answer – not enough.

This piece makes quite a few assumptions about the talents of new business people, it assumes they are like for like which simply isn’t true, far, far from it. I’m sure you can find other assumptions too. Just try and not miss the point.

I hope it helps agencies see the new business problem from another angle and helps them change course or amend their new business programme.

It doesn’t mean you should never do these cold campaigns but you should be aware of your averages and expectations of outcomes over time. ANd when you get lucky understand that.

It appears to me many agency owners who want to win new clients get frustrated with the old practices and yet in a way seem trapped in them & then end up doing them just one more time. And the trap is chasing KPIs that are arbitrary and based on small sample sizes that makes them unpredictable and forecasting unmanageable in the real world.

Lucky Jim’s Story.


When I was about 12 maybe 13, I used to go on summer holidays with my parents to a caravan park in the New Forest.  I loved it because it had a club house and in there where arcade games and fruit machines.  Evening time my parents would sit in the main bar where there would be some entertainment on and I’d play on the machines, the days when 50 pence went quite a way.

However, in the club house was the daddy of fruit machines, which was for over 18s only, that had a £50 pay out. I decided to sneak in and put my 50p in the daddy. I sidled over casually, hoping nobody spotted me and snuck my 50p coin in which gave me 5 spins.

First spin, nothing, second spin, nothing, third spin I hit four ‘double bars’ in a row, that won me £25, then they held, giving me another £25 – I’d won £50 (a lot 1983) as the money started to clunk out in 50 pence pieces (the £1 coins was very new) my Mum lucky looked over and came over to help me collect the winnings from the over 18 machine.

Question – Was I lucky?  What would you need to know to find out if I was or not or what does your social intuition tells you? How do we decide if I was lucky?

Of course I was, we know that about fruit machines don’t we. A determinist might say no I wasn’t.  I just didn’t know what had happened before hand, i.e. people had loaded the machine up for a win, lots of people need to lose before the machine pays out. It was fate? Anyway – would you advise me to play that machine again? Why not?  Look at my return on investment (ROI) it is 100 to 1.

New business wins are rare events.

It is easy to confuse your current results and ROI with luck which makes planning or forecasting results frustrating.  And I think most new programmes are very hard to forecast because the deviation between the potential outcome / variables is large i.e. what might happen or not happen is large and still be viewed as typical or normal. So zero business wins to 1 business win is a small variation but £0 to a win worth £200K is large. And any month could be zero or £200K.

Winning a piece of new business is a rare event in agencies in my opinion.  But how rare, how often does it happen?  And if you use a small sample size then you can get fooled by the stats easily.

Example –  an agency could easily have zero pounds worth of new business wins for 11 months in a row and then a new business win of £200K.  Each month has a likely new business variation of £zero to £200k  or put another way zero wins to 1 win and a zero month is perfectly normal, right?

Example: Let’s say I speak to agency A and agency B.  Both fairly similar in many ways.

Agency A has just won a piece of new business, great, hooray.  They look at what happened between this win and their last, to get some statistical feed back to use for forecasting.  It took them 1 year or 24 intro / credentials meetings, 8 second follow-up meetings, 3 pitches and 1 win worth £200k and a gross profit (gp) of 15% – which is normal (ish) for today.

Is it now fair to say that if they do the same again they get another win?  With that sample size what has been proved?  If you put x into the fruit machine x comes out –  always? ROIs aren’t fixed are they? Should I have played the fruit machine again? Will they get one business win per 24 intros? Why not?

Agency B, did the same as agency A, for no wins. Same amount of first and seconds and pitches but no dollars. Not that unusual in my experience.  In fact I would say this is most common – probably in my experience what I hear 70-80% of the time.

What if we added the two sample sizes together and averaged it.  Now we have 48 first meetings, 16 second meetings. 6 pitches for 1 win worth £200k at 15% GP (£30k) between them – is that even worth doing?

If you paid a lead generation agency or an in-house person £30K p/a (to make maths easier, could easily be £36k-£40k) you broke-even as long as you don’t include Employers NI at 13% = £3,900 for your in-house person and you put no cost against the time to prep for the 48 credential meetings and the 16 seconds and the 6 pitches. Are they all cost-free – do we even want to go there – I did a while back see here.

The piece of business will be with you for just under 3 years on average according to the IPA, so is really worth £600k at 15% = £90K which mean your new business person has a free-roll for 2 more years, right?

You can run with this thinking for 3 wins a year at say £80k each doesn’t matter really.Just get the thinking of ROI not being fixed.

Top Down Problem.

good quarter

Typically a new business programme is a top down initiative the CEO / MD decides that the agency should be pro-active about approaching prospects.  They’re right too.

The standard lead generation model whether it is in-house or outsourced is this – here is a ‘wish list’ of between 200 and 400 prospects – phone them, e-mail them, direct mail them (they love receiving it too by the way, really love it) telling them either a) we have or had experience in their sector b) we have an insight for them / their sector c) we have a way of working that will help you get better work – look here are our awards!

Fair – about right – give or take? What else is there to say?

So what do many agencies do after say a period of the similar results for a year or 18 months, like Agency Bs?  Well they fire the lead generator in-house or new business agency and do the exact same thing again but with a different lead generator/ new business agency.

Before they know it they have done the same process two or three times (often with higher meeting targets to make up for short-falls, we need 3 meeting per month, nope 4 ,nope 6 and so on)  and then all of a sudden they get the ‘double bars’ they get the business win. The outsourced agency or new business person is hailed a hero and carried aloft around the agency for all to see.

Was it the person or just the numbers that lead to the win? Is it just a numbers game?

Do the numbers even stack up?  Say a £200K win again at 15% but it took two years to get, that is the same as adding agency A and B together right? Except agency B now thinks it takes two years to win £200K and agency A thinks it takes one year?

Thought experiment.

What if we took a bigger sample of new business meetings that were attended by agencies in London let’s say 50 agencies doing like agency A and B combined over 1 year.

So 50 agencies, 25 like A and 25 like B would be 25 x 48  first meetings, plus 25 x 16 second meetings plus 25 x 6 pitches for 25 wins.

That makes a grand total of 1200 first meetings that end up generating 25 business wins of £200K at 15% gross profit.

If we represented each meeting as a marble and put 1200 in a gold-fish bowl, with 25 red  ones(winners) and the rest white (losers) and asked each new business manager to pick out 24 marbles (meetings per year) blindfolded (very important) what chance do they have of picking out a winning one?

Answer just over 2% (2.08%) a pick right, and with 24 picks –  50% chance of having a win this year.  But some will get zero and some will get three right? That’s the rub.  Someone will get better than that and so will get zero.

The MD is not happy with the first year of the new business manager’s work if he picked out 24 white balls – arghh – what an idiot, fire him. Some new business managers will look like heroes for picking out two or three reds and some will be in line for the elbow.

Changing the rules.

red bead IILet’s get back to normality, well a little bit.

What if we changed the scenario slightly and differentiated between leads.  Let’s say leads can be classified in just two main ways as a) cold leads  and b) referred leads.

Cold leads get to us via our cold channel marketing, DM, E-mail campaign and telemarketing to wish list of people we don’t know but brands we’d like to work for.

Referred leads that come to us by our client marketer referring us to another or moving job for example or from speaking at an event. And let’s say (because it’s true) that 70% of referred leads we close. We already know the rate for cold ones.  But a) and b)  leads come in different quantities, let’s say every agency gets three referrals a year and as before 24 colds.

Let’s increase our sample size again so we don’t get fooled by small sample size randomness.

Now in one gold-fish bowl you have as before 1200 marbles and a 2 % (ish) or 25 red winners to choose from.

In our new gold-fish bowl we have only 150 marbles and 70% or 105 red winners winners.

Rule – You get 24 blind folded picks from the cold bowl and three blind folded picks from the referral bowl.

Which bowl are you most hopefully from when your blind folded new business manager picks? Will they turn out to be lucky Jim?

If they could add 50 marbles at their current red / white ratio to any tank which one would you add marbles to?  Would you add cold leads to your pipe line or referred leads? Why?

What would happen if you mixed the tanks up in some fit of madness and then you didn’t know the difference between a referred lead and a cold one?  Like an agency would ever make that mistake and put as much effort and time into a cold lead as a referred one just because the payout was big.

Isn’t it worth learning how to get more referral leads, what I call column thinking?

94% of all problems in business are system driven and only  6% are people driven.
W Edward Deming

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Why don’t good ideas get done?

This is a guest blog, well two info-graphics from Steve Hacking who is the CEO
of Kardelen.

Logic trees or critical thinking is a method to make sure what seems like a good idea is torture tested and then there is a plan so the idea is implemented or ditched.

The first logic tree show how you get beyond “I’d like to get fit”.  The 2nd is a logic tree for our good friend “I will grow sales via referrals’.Infographic logic jpeg

Infographic logic second page 2


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Do you even know how to answer a prospect truthfully?

hl meckenI had one of those moments last week, what you may call an ‘a-ha’ moment.

And I am still not sure if I am 100% right to be frank.

I think some people in agencies literally can’t see the God’s honest truth.  They’re so biased and clouded, they literally can’t see it, let alone or say it. They don’t know the words. Let me explain a little further my thinking –  maybe I’m wrong.

Maybe they can see it yet feel it’s inappropriate.  The truth can hurt after all. Maybe somethings are best left un-said? Maybe they just have a habit of giving the same old answers to the same old questions.

The truth – is not as obvious as it first looks.

I think that today somehow telling the simple truth has become like a revolutionary act.  It appears that it is very hard to tell.  And part of that I think is that people are unsure what it looks  or sounds like.

The importance of the truth in new business is that it will set you apart from your competitors, make them at ease with you and of course and help get more new business into your agency and stop you spending time with tyre kickers  – column C and D prospects

And do you know what? It feels good, in fact it feels great, honesty is the best policy, it is so liberating that you don’t have to go around badgering prospects with how great you are, how many awards you won… To be frank that boast laiden creds document could have been sent to them on a Powerpoint before the meeting couldn’t it, if that is your bag?

So I thought I’d give you some idea of what the truth looks like and I’m well aware it may shock a few of you.  Truth does that.

And some of that is because you can’t hear the tone or see the body language which adds to the context. Remember the golden rule – you are there to diagnose not to get an ego boost or patronise a prospect.  They were clever enough to invite you in so they can’t be half bad, can they?

Below are some typical things a prospect may ask an agency very early on.  And here is the truthful answer that will a) differentiate you b) help you qualify the prospect by getting them off the solution and them qualify you too and c) help you become consultative and not a reluctant consultant.

Q: So how do you think your agency can help us?

A: Maybe we can’t. (truth)   What is it you were hoping we could do for you? (moving off solution).  Is there a specific issues you currently face? (qualifying and beginning diagnosis)

Easy enough wasn’t it?

Q: What makes you different from the other agencies?

A: Maybe nothing. (truth) How were you hoping we’d be different? (moving off solution)  Is there something your current agency doesn’t do that you’d wish they did? (qualifying and beginning diagnosis)

Easy right.  That’s what the truth looks like give or take, you can learn that can’t you?

Most agency people would have a presentation out by now, which will prevent them from being consultative in their selling or they’re  into a five-minute discussion about their proprietary tools or way of thinking and actually making themselves sound exactly like all the others, desperate – and even just like the one they are considering firing.

The truth is you aren’t that different most of the time. Except you can differentiate your agency in the way you sell to them. Non pushy, easily understood, credible (truthful no less) and reasonable.


In fact prospects feel comfortable around people who are disarmingly truthful and so will tell you more than they will other competing agencies about their business issues, which may help you when finding a solution. Or perhaps it might lead to a project being bigger than they first anticipated because you diagnosed more issues than they considered.

The concept behind consultative selling is to get to the truth of the situation. Your first meeting with a prospect is a test drive, it shows how thorough, truthful and credible you are.  Saying you are the best undiscovered agency in London is not credible, the times I have heard that one.

You are with a prospect to find out exactly what is going on in the prospect’s business world and you should be asking yourself a few questions – Why would they change agencies?  Would I change agencies in their shoes?  What’s so bad with what they have right now?  Is it costing them too much time and money to work with their current one?  If so how much do they think – could they ball park it? Where is the evidence for a need to change?

Then once you have the prospect diagnosed as needing to change then you need to make sure the rest of their colleagues agree for the need to change to – this is all before you present the solution to them.

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New Business – Question Everything.

questionBeing persuasive is a pretty handy skill to have.

Useful in business for obvious reasons but in life in general.

How do you persuade someone?  

How do you get people to make a decision in your favour? Is it even possible?

Today we are often told by the latest in modern neuroscience that all decisions are made emotionally.

Some of them even contend we have no free will at all, so decisions are already made, really we are simply witnessing them. The universe is deterministic and free will is an illusion. How helpful is that?

The same goes for much of the latest in cognitive science and psychology, or as it is now called Behavioural Economics.  People don’t make rational decisions they say and simply post rationalise their emotional / intuitive thinking. Their point is that people make decisions subconsciously and that is devoid of any rationale.  What like zombies?

We see ‘their’ lists of biases that humans have, that alter the way people make  decisions.  People make more favourable decisions when they smell something lovely, fresh bread, summer roses or fish and chips for example.  

They make less favourable decision when they smell something disgusting, I’ll leave that list to you.  Who knew eh? Don’t hold meetings in the company loos. Do you offer fresh bread to your prospects or a bag of chips maybe? Can you imagine – “Before you talk me through your case study could you pass
the ketchup?”

Other biases include making bad or rash decisions when we need the loo or are hungry.  We make more favourable decisions when we are  physically hydrated, or emotionally happy –  like if we have  just won some money or recently spoken to a loved one? Who knew eh?  

Can we get the prospect to speak to a loved one  just before we meet or can we meet them just after they have been offered a visit to the loo or  have finished a fresh glass of water? Give them some scratch cards maybe? Please win, please win.

What happened to rational man and his ability to reason?  The Behavioural Economist would say that died with Classical Economics but I feel we are throwing the baby out with the bath-water. Just because utility maximising as advocated by Classical Economics has died and good riddance, doesn’t mean man doesn’t act without reason does it?

I am sure there is some evidence regarding some of the psychologist’s biases, although it bothers me that much evidence is drawn from experiments carried out in sterile conditions of the psychology department in a university. Rather than from real life. Eight five percent of all psychological experiments can’t be replicated. So lets tread with caution shall we.

Or maybe ‘they’ are suffering their own confirmation biases – maybe they could not help but discover what they set out to? We look for patterns and we find them don’t we?

The only time I really want to be persuaded by the smell of fresh bread is when I’m in a bakery.  I really don’t want it in an estate agents or when I’m with my financial adviser.

I can just see a Derren Brown like character jumping out in front of me and claiming “You just sold your house for £10 and signed up to life assurance that never pays out because we piped in the smell of fresh bread.” Arghhhhhh, it’s a nightmare!

Consultative Selling

What happened to having a reasonable dialogue with people based on their needs? Understanding another’s view, situation and vision of the world, or their business at least? Where the seller asks the prospect a series of question to uncover their business issues, their current situation and where they’d like to be.  

The thought being that if we understand our prospect and their issues well, they are more likely to be persuaded to buy from us.  And our attention to detail and understanding gives the buyer a view of what we will be like to work with.  Meeting one with a prospect is a test drive.

That is the idea behind consultative selling.  A simple concept that a business prospect (a sentient living being) tends to either move away from painful situations  or toward pleasurable ones.  

Some (experts) say people are way more likely to move away from pain than toward pleasure.  But we do both in different social contexts. Ice cream is sought for pleasure on a hot day or is it to take away the pain? Or ice cream can be consumed on the sofa straight from the tub to get over a bad day at the office, to give pleasure or take away the pain?

In fact our psychiatrist friends would rightly tell us that there is an interesting relationship between pain and pleasure but we are not going there.

Business people I contend  will do much more to avoid loss (pain) than gain (pleasure). Loss aversion ‘they’ call it, it is one of the many biases our psychologist friends talk about that seems to have some evidence but it is not a panacea.  Just because someone has a problem doesn’t mean they are in a situation to solve it.

Businesses are very typical of moving away from problems, they tend to come to creative agencies when they have multiple problems, more so when they want to move towards excellence. How often have you heard a prospect say our current agency is 9 out of 10 we just want to find a 10 out of 10 agency ? Never I expect.  

Prospects come to us with because they have issues, right?  Things aren’t how they want them to be. Their current agency lacks results, collaboration, miss budgets, lack creativity and strategy and so on.

So if they have worked that out already, why do we need to question them to find out about their issues?

Well, some might say that if we talk with the prospect about the issues it shows we understand them. True, walk in another man’s shoes and all that.

Also it demonstrates the attention to details we offer. Meeting number 1 is where they get to sample your agency’s service. It’s like a test drive or a free sample of what you’d be like to work with. E.g. Are you diligent, thorough, challenging, interested and understanding or are you simply friendly, prescriptive, cheap and non descript and yes, yes, yes.

The issue I see today with consultative selling especially for creative services is this –   buyers today have so much information to take to their internal meetings that we are not privy to, what is a new business person’s role now?

The buying of creative services are complex. They have more than one decision maker, often three to four, sometimes the investment is a large sum and yet potential big returns too. And when the people client side start their hunt for a new agency they have access to your website, maybe your case studies, blogs, articles from trade press, your philosophy or manifesto, Facebook pages, twitter account and so on maybe even your price list.

Could they decide without even meeting you?

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The Reluctant Consultant

honestyI love the phrase ‘The Reluctant Consultant.’

Let me explain what it means to me.

To begin with we need to look at the word ‘Consultant’ – what’s one of them?

It seems like everyone is a Consultant of some sort today, fighting it out with the digital gurus and social media experts in the latest job title challenge over on linked-in.

A consultant diagnoses a client’s problem and then prescribes a solution but only once they are sure of their diagnoses.  In our world they charge for this solution. And quite often (it should be) that charge is based in some way according to the potential value of the solution and not based on hourly charges.  It’s a highly valued solution and charged accordingly.

I won’t define reluctant you can do that just fine.

So what is a Reluctant Consultant?  When a Reluctant Consultant is with a prospect and they are struggling to remain in the diagnosis phase, the first phase (where you ask question about their business problems) and instead skip ahead to be prescriptive phase the final phase.  Because that is easier. Often they actually prescribe /  sell  a box standard solution, the thing they always sell (strange that) in the same way everyone else sells it  – then they are being a Reluctant Consultant.

The are being reluctant to advise wisely and are bailing out on their role of being consultative and instead are prescribing before diagnosis which is malpractice. Will this result in repeat business?

The Reluctant Consultant agrees to do whatever the prospective client asks of them.  He would rather not challenge the prospects thinking.  I’m not advising you to be  being abrasive in fact many consultants could do with working on their bed side manner.  Humiliate a prospect at your own peril. You’re supposed to be smart that’s why they invited you in, which actually makes them quite smart, right? You don’t need to arrive with ego too.

However, to challenge the thinking of a prospect in their own interest is another thing entirely.  “I can sit here and agree with you Mr Prospect but my worry is two-fold,  one I see things slightly differently and if I do simply agree with you won’t you make the same mistakes as last time, can’t we discuss it a little further?” “I can see you are keen to get a proposal or a price but I think you’re rushing ahead.”

Consultants need to overcome their reluctance to consult.

That’s why I love the phrase ‘Reluctant Consultant’, it reminds me that there is huge value in the prospect seeing the truth and that is found by being thorough in the diagnostic phase at the beginning of a meeting.

To be truly consultative you can’t be reluctant to say what you really believe about a business situation and often there simply isn’t enough  information to make a good diagnosis.  If  you don’t know say that – “I don’t know.” Add “Yet”  onto that sentence if it makes your ego feel batter.

Maybe (it happens rarely) the prospect has done the perfect self diagnosis on their business. And if they have they don’t need you, do they? Now you are just an executor of their plan and you’ll be paid hourly (after some heavy negotiations, you’re not exactly in short supply are you, ring any bells agency owners) and not based on your true value in relation to the solution in the bigger picture.

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Do ‘they’ even need new business people?

Death of the salesman?

It is amazing the amount of things you can buy today without meeting a sales rep / new business person.

I bought conveyancing online and it was great and it was dead cheap.  I bought it off line too it was painful, slow and more expensive.

You can use online estate agents, solicitors, get loads of financial advice, compare insurance quotes and so on.  

Will there be a moneysupermarket or comparethemeerkat for creative agencies?  In fact why isn’t there?  Is that what some of the creative intermediaries already do? Create a central viewing point of showreels and credentials for marketers to view out of sight from pesky new business people or agency heads? Is that commoditising creative services?

Today it seems creative agencies are largely being commoditised and treated as free consultants. Maybe that is okay for estate agents, solicitors and financial services but does it benefit the buyers of creative services?  

And it is happening, just look at People Per Hour (PPH), where online you can buy logos, websites, SEO, ads, photo-shopping services, graphic design, press releases, direct marketing, telemarketing –  all cheap as chips.

You can get some pretty good services on-line, carried out often, but not always, by someone in a developing country at a fraction of the cost and you never meet the seller.

I used a brilliant guy in India to fix my WordPress site and I can tell you the service was outstanding, he over delivered and kept in contact all through the process.  

I know people in agencies who have bought services from PPH and over paid / tipped the supplier because the quality was so high.  When was the last time your client tipped your agency?

I think creative services are different, very different, well they should be.  The problem is the mis-definition of creativity or more importantly creative thinking today.  If creativity is seen as something technical you can most likely buy it online.  Fix the gremlins in my WordPress site for example or photoshop a picture.

Creativity today is often seen as solely aesthetic, making something look visually appealing. Although important, this is only part of what it means to be creative.  

The creative industries need to help a business solve a problem that is holding them back. They’re business issues and problems which are objective. Even if they are sometimes hard to diagnose from the symptoms that the client offers up. A person, a new business person, is need to help diagnose right, like a doctor?  Creativity is linked in my opinion to critical thinking – the prospect requires this don’t they?  Else they’ll just do the same thing over and over.

Being creative is a way of thinking about those identified symptoms, for instance struggling to make revenues, losing customers, losing market share, competing with new entrants and so on.

Creativity is a competitive advantage, it is looking at the problem differently it is being critical of the current way things are done. 

It is hard to commoditise, hard to find and yet unfortunately way too easy to put a low price on today. Let me tell you my story about gourmet burgers and see if it whets your appetite? Because it is not just my intention to say that buyers often buy cheap but that they buy bad and over priced more than cheap.

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7 habits of effective people – still useful

I think knowing Stephen Covey’s 7 Habits of Effective People are still useful to know today. I sometimes feel that people who read this and nothing else think they’ll become master of the universe over night, but hey it’s still a must read. And now because you’re way too busy to sharpen your saw, it is in video form.



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Column Thinking v BANTs

Column Thinking – is a lead qualifying tool. A way of thinking really, to determine whether you are likely to win a piece of new business or not.  

You’re attempting to imagine what the buyer is most likely doing behind the scenes, where so much of the decision making process happens today.

In my experience, once Column Thinking is trained (and it’s not rocket science as all my clients kindly remind me) it is way superior to BANTS (budget, authority, needs, timing) as a predictor to business wins.  And the thinking will lead to better direct marketing initiatives see here and client servicing programmes too here.

When a client is holding a pitch or sending out RFIs they all pass the BANTS test with flying colours don’t they?  Look –  they have money, the decision makers are involved and they want to change their agency in the next quarter. Bingo – got one!

Column Thinking  is my ‘Money Ball” qualifying tool. In the book (now a film) Moneyball some whiz kid (Peter Brand – his first job in Baseball, in fact anywhere) worked out by looking at the history of baseball statistics that baseball teams had been deducing incorrect knowledge for ages, whilst all analysing the same statistics to select their players. He shares his findings with the Oakland A’s now legendary manager Billy Beane.

They had been selecting players that looked like the All American Star –  good-looking , had the girl, ran fast, could hit hard  and had multiple skills and some good batting averages. You know the sort.  The same sort of thing would never happen would it in  graduate training programme, would it ? 

So, all of the big baseball teams were fighting over the same college players and their players prices went through the roof..  Without ruining the book it turns out their use of  statistics and gut feel was not a good indication of future major league performance.

Let me explain my column thinking. I think buyers put agencies into columns mentally when they are at the early stages of looking to change agencies.

 They (it’s usually a group of buyers)  have loads of information and sit there deciding who they’d liked to work with even before meeting with any agencies. 

The buyers usually have at least four columns A-D. In today’s market there are often more. As an agency you want to be in column A or B only.

Agencies get called in to pitch, or answer a Request For Information (RFI) and they are unknowingly already in columns C and D or further down the alphabet. They are column fodder, they are there to assist with benchmarking mainly on pricing. The lowers columns stop column A taking the mickey on price.

What is the difference in those columns and how can you tell where you are?

Column A – You are in columns A if you are the most favoured agency to the buyer or the buying team. Column A will have the agency in it that has been referred to the team by another marketer they really trust. That person may be internal or external. Or Column A may be the incumbent agency where there is no real intention to part company with them and the other columns are being used to price check the market – very public sector.

Or Column A agency could be a strongly preferred agency from a published thought piece article or the flavour of the month as advocated by an intermediary for example. Sometimes an agency emerges that is flavour of the decade usually hanging off of one or two amazing pieces of work and they get on pitch lists very quickly.

You have been selected based on some transfer of trust caused by someones conversation, that you were not privy to. So previous events, most likely your successful work, has had consequences on the prospect that determines you are in column A. It’s kind of how the universe works.

Column B – You may be the 2nd referral of choice because maybe they have two referrals – in my experience the agency that is referred to the marketing director for example trumps that of the one referred to the marketing manager.

Column B is the 2nd class referral in that regard.  Column B can oust column A though,  if A  messes up, more so, than on their own merit. The business is A’s to lose statistically.  Column B is the first loser is many regards.  They have on paper what column A may have except the trust that comes with the superior referral.

Column B may in some cases merge into columns C and D. So A is way ahead with the other columns being there for benchmarking / procurement. Remember you can’t see these  columns that are in the buyers heads.

Column C & D…Z  – These are the agencies that have arrived on the pitch list from cold lead generating. They are the sellers. They have been selected based on some of their experience, location, size etc and will be used for price checking and idea generation. This is where ‘The Fishare (see Chapter 4 on poker).  

Your agency is required for procurement processes – to make up numbers but most importantly to check market rates.  The buyers only wants to pay column A agency the price of column C or D and although they may not succeed in getting quite that they don’t want to pay too far over C & D prices.

The truth is sometimes you don’t know quite what column you are in so you have to use your intuition.  Sometimes it’s a close call if you are in A or B.  You should always know when you are in C and D though. Column thinking is a tool to help you qualify an opportunity by understanding what is most likely going on around the buyer’s table.

Because columns are unique to each buyers it is hard to put a permanent percentage chance of winning on each columns.  But because we know from agencies that up to 80% of their work come from a referral I’d wager that columns A and B combined win about 85% of the time and the other columns share a 15% chance between them.

So if there was only two more players i.e. C and D they have 7.5% chance each.  What would you do with columns C and D opportunities? Yet most new business programmes spend time filling the pipeline with C and D opportunities.

If agencies get 80% of their work from referrals then buyers are buying from a referral 80% of the time, QED.

This better work!” Billy Beane


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