Research suggests that 3% of marketing executives are actually in the market ready to buy – only 3%. That should have significant implications on advertising agency business development but too often is ignored. 3% is a tiny percentage of people who are looking to hire an agency on any given day. It’s not zero, but very close. Agency leaders too often expect their business development people to shake the trees, dial for dollars, hunt and capture everything out there, right now before any other agency gets it. Given the 3%, that’s a pretty tall order. No wonder business development people turn over so frequently.
If you take the data on face value, very few marketers are actively seeking to hire an agency. So few that it is hardly worth the time and investment to pursue. The very idea of cold calling as a method to catch random prospects to see if they are one of the 3% who are looking to buy seems incredibly ineffective. What ends up happening is more likely not interested or no answer and move on to the next. In reality, this old strategy has such a small chance of success, given the data, it is hardly worth the effort – effort that could be much more fruitful when tied to the actual dynamics of the market. But then again, we all want new clients right now so lets all fight over the 3%. Really?
I’ve already got an agency
If only 3% are active, what about the rest of the marketers? They are operating on their own timeline moderated by the cycles of their business and their needs. The majority already have an agency or agencies under contract. Unless something goes sour in the relationship, the need for a new agency isn’t determined by our persistence but by the contract period. Unseating the incumbent is virtually impossible, however, at some point in time the need will come about. When it does, you want to be a known and valued resource so between now and then, develop a relationship and demonstrate value.
I’ve committed my budget
Another significant group of marketers makes their agency decisions around their company budgeting cycles. They are committed to their current agency for the duration of their annual business plan and determined to achieve their goals and objectives with their agency in hopes of earning their bonus and getting that promotion. They have no interest in talking to other agencies as they execute their plans. But there will come a time when they do, and you want to make sure when that time comes, you are top of mind.
I love my agency
And then there are those who are committed to their agency forever and have no interest in talking to others, end of story. These marketers often bring their agencies with them when they change jobs. Unless something catastrophic occurs in the relationship, these marketers trust their agency partner beyond reproach. These marketers are likely a waste of time, but the brand might not be so. If the senior marketer leaves or gets fired, it’s likely that their agency will go too.
I’m looking for a new job
Not all marketers fit into these categories. Another segment at play is those who get new jobs. According to labor statistics, about 30% are actively seeking a new challenge, which means they are not going to make any changes at their current company. Between 15% - 20% will change jobs during the year. Of those new hires, about 80% change their agency resources within their first year. I like those odds much better than the 3% who are agency shopping right now. Keeping track of the marketers in your industries and responding to changes is a good way to capitalize on change.
Given these dynamics, agencies that want to grow are better served by a longer view of success. For example, if you know when a company begins its budget planning, you can spend your time between now and then shaping your perception. You can demonstrate value while staying top of mind. When the budget cycle concludes, and a new agency search is more likely, you will be on their list or even at the top of their list. If you know when a current agency first signed, you can predict the time when that contract comes up for renewal and strategically work towards that date demonstrating creativity and value to compare with the incumbent. If you track new hires, you will know that opportunity may be coming soon and focus on developing a relationship ahead of the search.
The foundation of business development
Establishing a prospect opportunity timeline as the foundation of business development is the most effective way to strategically align business capture efforts with the cycles of marketers and markets. This timeline takes time to build out as you learn about key dates, contract periods, budgeting cycles and other significant events. As you build it out, and the timeline runs its course, more and more identified and planned agency opportunities will fill your days so that you can spend less and less time trying to make something happen from the 3%. After the first couple of months, you will know of and can forecast against your timeline giving you a much more planned and predictable new business funnel. Concentrating your time and resources on the highest potential opportunity that you have already identified will help improve your success rate. Of course, the prospect opportunity timeline is no silver bullet, but there is a silver lining. Instead of chasing anything that moves, chase the things that matter.
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