If you've been on my site before, you know that I focus on the foundational building blocks of ad agency new business. I believe new business is much like a sport where perfecting the fundamentals is how the best athletes get to compete at the highest levels. Your agency's 'highest level' may be a five-figure project or a seven-figure retainer; either could be that game-changer. Practice makes perfect sums it up pretty well.
Let's say you've mastered the fundamentals and are a BD ninja. You will be performing at a level where you can predictably execute your agency's new business; the number of leads, % who will qualify, % who will meet, % who will convert, and the number of new clients over time. These formulas will vary by type of agency, size, BD people, and other factors. Every formula will have significant variability because of other factors; however, the numbers will hold true over time.
While perfecting your craft, the environment will be anything but predictable. One week may conclude with three significant opportunities and then nothing for the following year. As practice becomes perfect, so does the process. When I say perfect, I mean having confidence in the process and patience despite variability and other factors outside your control. It may take more or less time but will require time to start seeing predictable results.
Whatever your path to a predictable pipeline, when you get there, you'll be responsible for managing the time, cost, and resources needed to win new clients. The better you become, the more pitches and the more time and money you have. When you consider the actual cost of winning a new client, it is significant in time and money and the health and well-being of staff, who have to keep current clients happy while finding 'extra' time, weekends, and evenings, to do pitch work. You can stress the system occasionally, but it's not hard to reach the breaking point quickly. Most would say that's a good problem to have. No, it isn't.
It's particularly concerning now, coming off the last two years of extreme stress and absolute hell. In today's environment, employees are opting out in record numbers. They seek better work-life balance, meaning in what they do, and greater appreciation for their contribution. During the pandemic, most agencies were understaffed, and the remaining people had to handle two or three jobs. Good people start to wonder why, is it worth it, I can do better and leave. When others see this, they are tempted to go as well. The harder you push the agency, the more unintended consequences will surface.
As head of business development, you must find the line separating growth and damage and defend that line no matter what. That means saying no to potential new clients, new revenue, agency growth, and more commission. Nonetheless, pursuing and pitching potential opportunities requires short bursts of extreme activity and will quickly turn even the best contributors against you if the agency is pitching too frequently.
To help you make good data-informed decisions, you must track the actual cost of new business projects across the agency regarding staff time, overtime, freelance time, your time, and anyone else involved. For a high-performance business development program, this is absolutely essential. You must religiously track all impacts of new business and then use the data to help decide what new opportunities to green light and which to say no to. If you know you need 30 hours of a designer and that designer is already overbooked, the effect will be either a half-hearted effort or a designer who is likely to leave.
It is a challenge, and many agencies will kick the can down the street; we want to start winning again and cross that bridge if it comes. But it will come; if you wait, you will be sorry. I recommend you incorporate a tracking methodology right from the start. Over time, you will better understand the cost and impact and plan more confidently for the next one. You will also have a better sense of freelance needs to factor into your planning. Most importantly, you'll have a tool you can take to agency leadership and provide fair notice about the demands coming up from new business.
I worked at an agency long ago as the head of new business. The agency owner and leadership were committed to growth. The momentum was slow to start since they had never done any cold prospecting before. Initially, some smaller opportunities emerged from a steady pipeline. A significant opportunity came up in the second year, their biggest one to date. Suddenly there was hesitation because of the strain on busy staff and the challenges of staffing up to support it. We won the business, but within months another bigger opportunity emerged. Internal discussions turned into arguments, but the agency owner made the call to proceed. We won, and you could see the agency seams bursting.
Within a couple of weeks, the agency owner called me into her office to tell me she was letting me go. Her leadership was threatening to quit. They wanted to go back to the way things were before, with manageable days and limited growth. They were also upset that I was earning far more than anyone else because of commissions from new clients. Even though I had an iron-clad contract, the owner said she would not pay any commissions on this new client or any client still within the one-year commission period despite our contract stating otherwise. We got lawyers. Theirs dragged the process out. I ran out of money and ended up with nothing except a harsh lesson in the unintended consequences of new business. Too much new business is a bad thing. Too little new business is a bad thing. Finding the right balance is priceless.
If you'd like help finding the right balance in your business development program, let's talk. There's no better time than now to rethink and reset your efforts. I am always open to discussing your challenges and offering my opinion on possible solutions. If you like this post, sign up for my new business newsletter. And find me on LinkedIn for daily tips and insights. Feel free to reach out at any time. #LetsGrow!