It is that time of the year when we reflect back on our 2015 results and make our new business resolutions for 2016. Many new business pros might say; I’ll make more calls. I won’t call Coke anymore. I will do my status report on time.
Those aren’t the ones to worry about. They are probably the 34% that missed their number this year and will continue to fall behind practicing the old way of selling ad agency services. The greatest threat comes from agencies that embrace the trends for greater success in 2016. Better yet, worry about me as I work on 2016 plans for my agency clients.
1. Competition will be historic.
There is no doubt that more agencies (about 8% - 10% more) will be competing for about the same volume of new business in 2016.1 Specialist will continue to broaden their service offerings to go after new prospects while generalist will ad services to keep up with the evolving needs of marketers. Domestic ad spending is expected to increase only 3.3% in 2016.2 According to AgencySpotter, there are more than 120,000 "agencies" in the US alone.3 In the past couple years I’ve seen 40 – 60 agencies submit proposals for RFPs that previous attracted 10 – 12.
Larger agencies are going after smaller opportunities in order to keep growing, and smaller agencies are aggressively seeking more business outside of their geography and expertise. Marketers are encouraging more competition to drive down costs, and procurement is undermining and undervaluing agency services and fees. Almost 80% of marketers report running their own searches. HubSpot predicts that 34 percent of sales reps will miss their quotas in 2015, which makes 2016 a “make or break” year for those reps.4 Agencies are falling into the trap of price-cutting and over delivery just to stay in the game.
As the economy slowly improves, the feeding frenzy will only increase. Agencies must focus energy and resources on only the best opportunities but prepare for the pitchamageddon. It just gets harder.
2. Agency branding has never been more important.
As competition increases the need for a distinct agency brand becomes even more critical. Maintaining the status quo of a full service, all things to all marketers offering will continue to be a diminishing proposition. Sure there will be a need but these trends indicate a declining opportunity. It’s a long tail if you want to ride it but that means even more agencies will be competing for less opportunities.
According to Tim Williams, to meet the needs of today’s marketers, agencies must have either deep-rooted functional expertise or category expertise, or both. There are no longer many buffers for getting up to speed, unlike the retainer or “AOR” relationship of the past. Plus, having a functional or category focus allows agencies to solve better and faster, which helps produce not only results for the client but profits for the agency.5 Agencies must determine and articulate what they offer that is unique or distinctive and differentiating from their competitors in service offerings and in the verticals, consumers or channels that they cover.
Agencies can be successful as digital, social or content experts and they can be successful as full service, omnichannel or multiservice solution for millennials, travelers or healthcare consumers. Whatever the expertise or focus, agencies will need to pay increasing attention to their brand, in the same way that they consul their clients, using all the tools and techniques of high performance branding.
Stand out from the crowd and stand up for something or face falling further back in the herd. Isn’t it ironic to hear the same branding lecture so fervently given to clients?
3. Content is king.
Many companies today rely on content marketing to gain visibility for their brand — after all, 70% of people say they’d rather learn about products through content rather than through traditional advertising.6 Marketers are no different. Think about it. Are 70% of your prospects getting content from you?
Marketers want to discover and learn about your agency through non-advertising sources, where credibility and objectivity trumps all others. When marketers need an agency, they typically search for expertise or thought leadership in the areas that they are most challenged or frustrated. If an agency’s content is not easily findable or omnipresent to them, they might as well be invisible. A marketer in search of an agency will visit many website before the agency has any clue he or she is looking. If the content doesn’t quickly and easily answer who are you, what do you do and why are you different, the marketer is “clicked-off” and on to the next agency.
Agencies have to be masters of content, thought leadership and experts in their area of distinction. Just the same way agencies guide their clients. Irony again!
4. Everyone’s going mobile.
Nearly 75 percent of mobile subscribers in the U.S. now own smartphones. By December 2015, it will be above 80 percent, perhaps closing in on 85 percent.7 You can be sure 100% of your prospects do. Search accounted for nearly half of all smartphone traffic (43 percent) in Q1 2015, up 5 percent from the prior quarter.8 Yet only half of websites overall are mobile friendly.9 Looking at Google analytics for my clients, I see about 42% of qualified prospect traffic are on mobile devices, a number that is increasing every month. In April 2015, Google said that smartphone visits grew 35 percent year-over-year.
Consider that marketers will check you out on your website before you know they are looking. If your site isn’t optimized for mobile you will make a bad first impression for near half of your potential new clients or worse; you’ll never even know what you’ve missed. Maybe it’s better that way.
5. Sales automation rules.
The use of a CRM system is no longer optional. According to HubSpot, RSW/US and Mirren Business Development, agencies that use a CRM program is up to 70% from only 45% in 2013. Also, the landscape of CRM options has changed significantly in the past year, with HubSpot's free CRM leading at 46%, Salesforce at 41% remains the market leader across all industries but is overly complex for agencies. Others like SugarCRM 7.7%, Infusionsoft 1.5%, and Microsoft 1.5% are used by agencies as well.10 Newcomers like Salesradar.io, Insightly, Zoho and so many others offer great alternatives to the old guard.
There are over 1,000 solutions on the market with new entries and varieties, from free to expensive, coming out every week. To build an effective sales technology infrastructure in 2016 you first need to start with a strategy to guide your choice and application, and then align people, process and technology otherwise you’ll end up with another useless piece of software. The truth is that CRM initiatives currently have a 63% fail rate.11 Programs that integrate and centralize the many channels like social, mobile, website and email will save time and provide focus to your efforts while bringing visibility and clarity to the prospect funnel, projected revenue and help prioritize opportunities.
To avoid being in the 63% that fail you have to make sure you get adequate training and support, and be prepared to endure the learning curve. It will pay off in the end. Agencies who continue to rely on spreadsheets will fall behind those who have invested in the newest tools for prospect management and will spend more time and effort doing so.
6. No more cold calls.
Research continues to support the fact that cold calling is on the decline. Calling is the least effective, at only 11% among the sources of agency new business.12 Certain industries still find it useful like aluminum siding and used car warranties, however, senior level marketers say it the most annoying sales practice and rightfully so.
It takes 8-12 dials to connect with a buyer, and callback rates are in the single digits.13 As the competition for new business increases and agencies get more sophisticated in their tactics, engaging with a potential prospect has to first offer value to them. In 2016, value will be defined as having a solid understanding of the prospect’s industry, products, competitors and challenges before any conversation takes place. What will separate the winners from the losers is the ability to turn customer insight into a vision and solution that the agency can uniquely do for him or her.
In B2B sales, customers buy more than just our products and services. They buy our ideas—our visions for scaling their businesses and improving their bottom lines. In fact, according to Forrester Research, “The first seller to set a vision of what’s possible has a 74% chance of winning the deal.”14 Who wouldn’t want a 74% win rate? Agencies that win in 2016 will do their homework, gather customer insights from many different sources and take the time to ply that knowledge into a conversation.
For even more proof consider that 73% of marketers find their agencies incapable of coming up with genuine consumer insights, almost 50% feel agencies don't know their business well enough and are slow to respond to market dynamics, and 78% are frustrated by the way agencies manage a holistic approach to communications.15 The implications of shifting from a cold quantity-based approach to a warm quality-based strategy means fewer contacts but higher quality conversations.
The “sales” mindset has to pivot to a consultative relationship, demonstrating knowledge, insights, and solutions as if the prospect is a client already.
What are your New Years resolutions?
In 2016, time is more valuable than anything else. Your time, your prospect’s time, your CEO’s time, your agency’s time. Use it most wisely to win business by following these trends.
We all know that on January 1, the gyms will be filled with people earnestly making 2016 the year they get in shape. The same holds true for advertising agencies. The difference between the agencies that will struggle and those that will grow is how committed and strategically aligned they are to leverage these trends, and how well they follow through until the year’s end.
In my most recent survey, 36% of advertising agency owners plan to increase their time and attention to improving their business development success by adding staff, investing in technology and hiring outside experts to help.16 Will you be in the 36% who grow, the 34% who miss their quota, or the 30% holding down the status quo? #LetsGrow!
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