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Mr. Robert Moorman

Response to Nancy Hill Re: Getting the Best From Your Agency

I agree with Nancy's Hill's comments that the new business process should be a two-way assessment of capabilities, compatibility and economic expectations. I have a few thoughts on economics that I'd like to share with 4A’s members in the hope that, as an industry, we can evolve more fiscally prudent agency new business practices.
 
Clients versus Prospects
 
You may have heard the economy isn't so great. May have even heard that it could get worse. Clients certainly seem to have heard (truth is clients have known it for some time.) It's why they are constantly in search of ways to cut cost out of their process, do more with less and regularly pressure their agencies to better control costs, commit dedicated resources to their business and prove that those resources aren't stepping out on other projects. Smart clients have even changed the way they work to help their agency be more efficient and have set plans in place that allow their agencies to benefit when saving are realized. God bless them. I love clients, and I really love smart clients.
 
But it seems that even smart clients can’t seem to help themselves when it comes to new business. When it comes to new business, clients (we call them “prospects”) encourage agencies to turn themselves into 24-hour, all-you-can-eat buffets—places expected to spare no cost, no resource, deny no meeting request, and drop everything else when the process changes with no guarantee of any reward. Oh and, did I mention, they expect it for free.
 
So the same clients that dutifully monitor their current agency’s resources (we call them “people”) and aren’t stepping out on other projects encourage outright adultery from pitching agencies as prospects. They know full well that agencies have limited resources and nearly all of them are dedicated to existing business. The same way clients don't have a few extra brand teams sitting around in case consumers decide they would like a complete new product line in say…a month or two. Agencies don't have a few dozen creative, account, planning and communications specialists sitting around in case a prospect calls and would like an entirely new brand strategy, creative articulation or integrated communications plan in say…a month or two.
 
Just like clients, the resources agencies have are the resources they have. They are based on what our current clients pay and a reasonable investment in business development costs as overhead. But it certainly doesn't fund anything near what we are frequently asked to spend in pitches today by prospects.
 
However, I've yet to find the agency that, once it decides to participate in a pitch, doesn't go all out. And why shouldn't they? There are few set rules in new business, but one that is pretty indisputable is that anything less than a 100% effort loses. So, if you are only going to invest at a 50% level, fine, but unless you’re prepared to post compromising videos of the prospect on YouTube, your chances of recouping your reduced investment are pretty slim.
 
So what do we do? Well, in a tight economy we need to be more selective. If a pitch is too much, too soon maybe it's not worth it. When a pitch requires more people than you’ve got, pass. You’re going to lose anyhow. If a pitch requires that you do research or travel to the prospect or do a social event that requires out of pocket expenditures it's reasonable to ask that those costs be reimbursed. As for stipends—stipends are nice—$25-50,000 covers the cost of pizza dinners, weekend air conditioning, late cabs home and thumb drives for leave behinds.
 
And what can prospects do? They can behave more like smart clients. Did I mention that I love smart clients?
 
Rob Moorman
Unlike bloggers who post everyday, I’ll be back when I have something to say.™

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4A's Strategy Festival 2014
Oct 5–7 | Chicago
Celebrate the strategy and account planning community at our annual conference. Afternoon keynote by New York Times best-selling author Jonah Berger (Contagious: Why Things Catch On).
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Nov 12–13 | Boston
Agency creative technologists, creative directors and C-Suite technology heads are invited to join the creative technologist community for this 2-day conference. Includes a keynote speaker from Microsoft Research.
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