Previously, I posted a couple of thoughts about the time required to get a new client once an ad agency starts a focused new business process. This post is part 3 and references actual examples that illustrate the time frame. When I talk to agency owners, they are often surprised by the actual events that led to new clients originating from a cold start, especially those owners who have, for the most part, relied on referrals and recommendations to build their agency. You may enjoy reading the previous post, part one here and part two here.
When agencies go after a new segment or start a focused effort on an existing category the thing to remember is the marketer’s cycle of hiring a new resource and what that means to the timing of a new business plan. Research suggests that 3% of companies are active in the market ready to buy. 3% is a tiny opportunity. Agency leaders too often expect their business development people to shake the trees, dial for dollars, hunt and capture anything out there, before any other hunter gets it. Given the size of the active market opportunity, the math does not look favorable. There are periods of time when that number goes up, and other times it trends even smaller. I’ve shared some thoughts about the seasonality of new business in this post and about the prospect opportunity timeline in this post.
The other factor to consider is the longevity of the average agency relationship today. Research shows that agency relationships last about 2 to 3 years, according to the Bedford Group, down from 5.2 years in 2013 and 7.2 years in 1984. With the increasing amount of project work, CMO tenure, and Wall Street pressure, that number is likely even shorter. Taking into account current market activity and agency tenure, the answer to how long does it take lies somewhere between today and 2 to 3 years. Agencies should plan on the realities of the marketplace however the reality is that the average tenure of a new business person is only 12 – 18 months.
Given this data, what should an agency leader expect? The answer is determined by many other factors than those mentioned, many of which lie within the agency. For example, if no one in your target market knows who you are, the time it takes to build awareness and translate that knowledge into benefit and value will add time. If your agency has a dated perception, changing to be more current will take time. If the agency’s value proposition is too general, or unclear, add more time. If the agency can’t sustain a business development program over the years, you’ll have to reset the clock each time. Once an agency gets a new business process running and is continually refining it, their pipeline reflects a steady, predictable stream of opportunity, both immediate, near term, long term and even far into the future.
If we assume the agency is competitively positioned, focused on its core markets and prospects, can demonstrate value, is skilled at engaging and pitching, and is active and consistent in its business development process, the cycles of the marketplace should result in new clients within the first 6 - 12 months. In truth, they could get lucky among the 3% actively looking, which could mean closing a new client in three months. They are just as likely to engage with a marketer who is winding down an incumbent contract, and that could result in a new client within six months. Yet with all the data we have, and the complex dynamics of a new client win, the time it takes is still wholly unpredictable. If anyone tells you otherwise, buyer beware.
I use SharpSpring through Catapult, a marketing automation platform designed with ad agency business development people in mind. I’ve used many others, and this one does what I need without making me struggle through all the things I don’t. With it, I manage all my prospecting and can see and track results like the outcomes listed below. These start by sharpening the agency positioning, identifying and focusing on those prospects that best fit the agency and its vision, and executing a strategic and consistent program. I’ve summarized and simplified a few to illustrate real world timelines and activities of business development programs. There are many different methods and tactics I used in addition to what I reference here. These are just a couple of my favorites.
I sent a marketing VP, let’s call her prospect #111, thirteen emails over six months. No response. Using email tracking, I saw that none of those emails were opened. I then sent her an agency trinket. Within a week she sent me an email asking for a call to learn more. On that call, she knew a lot about the agency and asked relevant well-informed questions. She had obviously read my emails and done her research on the agency. It wasn’t that over the last six months she just didn’t care or ignored all my communications and calls. She was buried in work, and when she finally came up for air, she had a need and was genuinely interested. She had her own timing that didn’t mesh with my prospecting until it did. If I gave up after the first ten contacts, she would not be a happy client today.
For another marketing director, prospect #7, it wasn’t until the 22nd email was opened nine months later that things began to happen. On the third email, she opened (that would be the 25th email overall) she visited the site and visited again from that same email a day later spending more time on the site. I called a couple more times but no response. I saw she opened another email and made more calls, more opened email, more calls, more opened and unopened emails until finally, at 10:38 pm on a Friday evening, she replied, I am interested, just been too busy. After twelve months in total, she signed a contract.
Prospect #37 – I sent six emails and no reply. I sent a LinkedIn invitation, and we finally connected. I sent the same email copy as a LinkedIn message, and he responded by asking for more information about the agency. We traded a couple more LinkedIn messages, and he gave me his phone number. We had a call, and he invites us to a meeting with his team. All messaging throughout the process was on LinkedIn. Six months later, we were given a project, and then another and another.
Prospect #23 – I saw many unopened emails, and he would not accept a LinkedIn connection request, so I followed his twitter account, and DM’d him. He replied to my DM with his email address to schedule a call. Eight months later, he’s a new client.
Prospect #117 – She opened multiple emails but never a response. I called. Her admin took my message. She returned my call the following week and had a great conversation, then a meeting, later a presentation and eleven months from the start, a new client.
Prospect #65 – I sent her nineteen emails and saw three opened over that time. I also made multiple calls but no response. Finally, she replied to the last email, agreeing to a call. She revealed that an RFP was in the works and we were on the list. Thirteen months later we won, and believe it or not; she said thank you for being so persistent.
Prospect #92 – I sent him multiple emails and made frequent calls with no response. I found a friend connected to him on LinkedIn and asked for an introduction. The prospect agreed to take my call. During the call, we realized the opportunity was not a good fit and told him so. I referred him to an agency better suited for his needs, and they are still his AOR.
Prospect #21 – I met her at a conference, and she agreed to a follow-up call. I made multiple calls and sent many more emails but no response. She connected with me on LinkedIn. We met again at another conference. To my surprise, she remembered me, apologized for being so busy while going through an acquisition and new management, and wanted to schedule a call the next day. From the first meeting, a contract took 18 months.
When would you quit or change direction? Some might argue that it doesn’t pay to spend so much time on one prospect and I would agree if your objective is to speed through generic prospects hoping for a hit. If, on the other hand, you are focused on the clients YOU want to win, the ones that will move your agency forward, brands that will fulfill your agency vision, why would you ever give up? You will move on if you determine that a prospect is not a good fit, but never quit because you want to be the one that determines your destiny. You may change direction if you find the strategy doesn’t play out but never give up. One of my highest grossing wins took three and a half years to sign, and six years later that company is still a very happy client.
So often expectations are wrong from the start. Agency owners want immediate impact. Of course, they do. They are running a business. But it doesn’t happen overnight, at least not very often. The average client-agency relationship is two to three years. That is a long sales cycle. Sure, there are clients in the market right now looking for help. Finding them, warming them up and building trust that enables a new business win is a long process. The odds of catching someone with a need and willingness to talk through a chance interaction is greater than being struck by lightning. Success comes from working a smart, consistent new business process so that when a need arises that prospect already knows you, knows what you offer, and will be open to the conversation. A good new business program, running at peak will keep those opportunities coming.
I’ve got some ideas about how you can rethink your business development approach and supercharge your new business program, and I’m happy to share them with you. If you like this post, click the thumbs up, so I’ll know and then sign up for my new business newsletter. #LetsGrow!