Ad agencies have to bring on new clients to survive. The average client-agency relationship is down to about 2.8 years on average. Increasingly agencies are being hired for projects that last months rather than years making it harder to sustain revenue without turning over more and more projects. Marketers are changing jobs more frequently resulting in agency changes and procurement evaluations and reviews of agency contracts are happening more often and with greater scrutiny of the cost and value of services.
Jerry Garcia had it right. The wheel is turning, and you can't slow down, You can't let go, and you can't hold on, You can't go back, and you can't stand still, If the thunder don't get you then the lightning will.
The role of ad agency business development has never played a more important role in the short and long-term success of the agency amidst the thunder and lightning of this crazy marketplace. That is why agencies should have a two-stage business development strategy. I see too many agencies put all their time and resources into chasing whatever opportunity exists today because they think it is the quickest path to new revenue. Many times, they end up with relationships that go sour or don’t meet revenue expectations and most importantly, don’t fit the agency’s long-term vision. And that means the wheel must turn faster.
A two-stage strategy is the smartest approach for every agency. It includes a short-term pipeline of current opportunity and a long-term pipeline of prospects that will help the agency become the kind of agency it wants to be with the brands it wants to work with. Of course, you want to be top of mind whenever a suitable prospect has a need. However, you also want to build awareness, demonstrate value, and differentiation among those select prospects whom you have identified as the ones that will contribute to the long-term vision for the agency. Most of those prospects likely don’t have a need today, but when they do, you want to already be on their list, and ideally at the top of their list.
Sales statistics show that only a small percentage, 3% - 10% of your potential opportunity is actively seeking help at any given time. That’s a pretty small number that almost every other agency is fighting for too. About 60% - 80% have some future potential. So around 10% – 20% will never change their agency, at least not for many years. Remember, the marketing services sales cycle is governed by annual budgeting, the seasonality of new products, the turnover of marketers, and the length of existing agency contracts. There are always exceptions, but we never plan around exceptions. For those companies and brands that align with your long-term vision, you need to identify their cycles to know when a future need is likely to occur and develop a strategy that strategically leads up to that time so that they already know you and what you offer.
Having a short and long-term pipeline allows you to execute separate strategies and tactics for each and measure the results differently to improve and optimize both. Your short-term approach should be broader and shallower because you’ve got to reach a lot more prospects to find the few who need your agency right now. You won’t have time or resources to research and develop individually relevant content. Any prospect who has an immediate need won’t spend time-consuming much content before deciding to engage or move on. It’s a lot like speed dating, and your goal is to be fully prepared with the right positioning, messaging, and value proposition to catch their attention. I’ve got some additional insights about this in What do marketers want to know about a new agency. Things like your website, search ranking, social media activity, PR, and blogging are critical to catching this kind of opportunity. Industry experience, capabilities, and client work are what generally catches their interest.
If a marketer does not have an immediate need, they will have no interest in hearing about your agency, or why you are different or better. They are focused on delivering results each day, month, quarter, while keeping tabs on new and better ways to improve those results. Over 75% of marketers are tied to P & L performance today. Your strategy should be to share new ideas and better solutions, innovative approaches and provocative ideas. When they switch to a state of need, you want them to already associate your agency with new and creative thinking that solves their problems. In doing so, they will raise their hand to learn more. A survey this year showed that 71% want to hear from resources when they’re actively looking for new ideas or better results. Your strategy has to keep you out of their spam filter or voicemail and into their consideration set.
In that same survey, 60% say they will connect with resources who offer to share something of value. Your long-term strategy should include time to research and understand what they value and develop ways to demonstrate that value. Research the trade publications, social media, talk to colleagues who know the prospect or the industry, network with the prospect’s customers and competitors, and many other tactics will help understand the challenges and develop provocative solutions or a thoughtful point of view. It is a lot easier said than done but when done well that prospect will want to learn more and open the door for you.
A balanced approach to both the short and long-term pipeline will ensure time and resources are spent on generating revenue today while finding and nurturing the right opportunities in the future. I’ve got more thoughts about this in The Prospect Opportunity Timeline. Depending on the individual agency circumstances, I allocate about 30% - 40% of my time on the short-term pipeline and the rest on the long-term pipeline. It requires disciplined time management and commitment from the agency to keep both pipelines flowing and to say no to those time-wasting exceptions. It takes time to building awareness, trust, and value to get your agency from a cold contact to a warm resource, from just being on the list to rising to the top when the need comes about.
I want to help you develop a dual pipeline strategy and get more clients today and better clients tomorrow. I’m always open to a conversation regardless of your needs. If you like this post, click the thumbs up, so I’ll know and then sign up for my new business newsletter. Follow me on Twitter and LinkedIn for daily tips, tricks, and insights. #LetsGrow!