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Agencies Defend New Business Intellectual Property Rights

The 4A's New Business Committee requested that search consultants consider, as a matter of principle, advocating agency search agreements specifying that the rights to Intellectual Property (IP) created by agencies during the review process remain the property of the agency until the marketer either hires the agency to execute the work or the parties agree to a commercially equitable payment for the assignment of usage rights.
 
 
The agencies referenced in the appendix to the search consultant letter believe in principle that it is imprudent and inequitable to participate in reviews that require the assignment of agency developed new business ideas and work product.
 
How do you respond to marketer mandates to own all agency search ideas and executions?

Cracking the Clutter?

Ms. Lisa Colantuono
Ms. Lisa Colantuono
Managing Partner
AAR Partners
Top 10 pieces of advice for cracking the clutter:
  1. Listen
  2. Be a partner-worry about the clients business
  3. Strategy and creative must connect
  4. Do your homework—know the business
  5. Don’t bait and switch
  6. Follow instructions. Don’t make assumptions or provide something not requested
  7. Be honest about your capabilities
  8. Show enthusiasm & research the client well
  9. Relevant experience (Category or target)
  10. Don’t show dated material
Given the competitive environment, did we miss anything critical?
 

2009 Accounts in Review

The 4A's maintains an analysis of published agency review/search activity. The report covering Full Year 2009 activity is available by clicking on the link below.
 
The "Accounts in Review" analysis includes:
  • the account in review, winner (if known), incumbent, and finalists;
  • the nature of agency services that were reviewed;
  • approximate billings and/or approximate agency revenue/gross income, where known (12 ranges are specified at the end of the report);
  • if a search consultant was involved, the consultant is noted;
  • the marketer's business sector is designated into 33 categories.

The Accounts in Review information is provided on a spreadsheet so members can readily sort the information.

The second half of 2009 was quite active. Do you expect this level of activity to continue at this pace in 2010?

Excel  Download the Accounts in Review Spreadsheet

Does the Q and A Session Help You Win Your Pitches?

Mr. Mark Schnurman
Mr. Mark Schnurman
Pitch Consultant and Founder
Filament, Inc.

Having worked on a number of pitches over the last few months, with a number of different agencies, it is clear that there are different ways to handle the Q and A session. Some agencies are more effective than others.

How does your agency handle the Q and A portion of the pitch? Does the CEO answer all the questions? Is it an open discussion? Is it a free for all? Share some of your Q and A successes and failures.

Solutions to IP Pitfalls

Ms. Lorraine Stewart Rojek
Ms. Lorraine Stewart Rojek
Principal
The Rojek Consulting Group
Here are two actionable business practices to address the IP issue:
 
A better practice: Non-disclosure agreements are generally exchanged early in an agency review process to facilitate a more robust conversation between consultants, clients and agencies. These tend to be boilerplate agreements exchanged by anyone from legal entities or administrative personnel in a rush to get into the review.
 
These legal agreements should be reviewed closely. They can be better written to definitively include not just existing factual information about the parties, but all reports, correspondence, documents, data and recommendations relating to the work produced during the review process. Information that is indeed protected as proprietary and or confidential is not to be shared with third parties without consent. If designed and executed as mutual agreements, both parties are usually agreeable to signing. If the agreement is violated, there is a course of legal action for the injured party.
 
A best practice: Secondly, it's incumbent for search consultants who lead these engagements to include in their letter of agreement with a client a specific provision that stipulates that the client company agrees that the right to the intellectual property created by the participating advertising agencies during the consultant-led agency review remains the property of the advertising agency until that point which it is contracted for hire. Agreement to this principle upfront as condition of the consultancy engagement establishes the terms by which the review is conducted. If a client organization is not willing to agree to this provision, it means it sees a different purpose to the review.
 
Click here to read more of Lorraine Rojek’s thoughts on Solutions to IP Pitfalls.

Is There a Light at the End of the New Business Tunnel?

Mr. Mark Schnurman
Mr. Mark Schnurman
Pitch Consultant and Founder
Filament, Inc.
I am not sure what everyone else is experiencing, but we are seeing a significant increase in pitch activity compared to the first and second quarter.
 
Granted, some of this is a function of clients inviting more agencies to pitch. If there were three agencies in the final in a few years ago, now it is not uncommon to have four or five agencies (or even more) in the finals now. Whether it is more agencies pitching or more pitches, it is still nice to see an increase in activity.
 
What is everyone else experiencing? Is the second-half shaping up to be better or worse than the first-half of '09?

Cracking the Clutter! What Babies Can Teach Ad Agency New Business Executives About Prospecting

Ms. Lisa Colantuono
Ms. Lisa Colantuono
Managing Partner
AAR Partners
Many new business executives in the industry know that I’m in love with a two-and-a-half-foot, 26lb little guy…yes, my nephew. And if you want to see my little love, every Saturday I post a new photo of him on Facebook. So, besides getting a real workout once a week during my babysitting session with him, I realized he also exemplified how new business executives should think about prospecting. How?  Let me explain.
 
There isn’t an agency that meets with AAR Partners that doesn’t start or end with the questions, “What are successful agencies doing to crack the clutter?" or "How do agencies attract clients’ attention?” We often hear their answer is strictly setting objectives, developing pitch lists, determining goals and being extremely focused on categories or target markets where the agency has knee-deep experience. Don’t get me wrong, there is nothing inaccurate with this approach but the value of exemplifying unexpected results is often forgotten!
 
Babies (like my favorite nephew) are captivated by the most unexpected results. Adults, on the other hand, focus on the outcomes that are the most relevant to their goals. They focus on objects and objectives that will be most useful to them. But babies play with objects that will teach them the most! The key…they draw on anything new, unexpected or informative.
 
At AAR Partners, we receive hundreds of letters, mailers, emails, credential and collateral pieces that seem well…rather programmed, “more about me and less about you” and simply expected. The element of surprise (or the value of exemplifying unexpected results), isn’t usually communicated. Agencies fall into the same pattern of churning out information about the agency and often forget to be informative. They forget to teach their prospect something of value.
 
Babies are captivated by unexpected results…just like CMOs! They need to see the value, something new or be surprised by unexpected results. They need to know that their brand is going to attract consumers by pulling them, rather than pushing them along. Crystallize how your agency has demonstrated unexpected and exceptional results for clients’ business, make it relevant to the specific advertiser you’re speaking to and in turn, captivate the prospect.
 
So, the next time you see a baby captivated by something unexpected (or informative), remember, that’s the concept of how an agency could crack the clutter. And the results can be rewarding for everyone.

Accounts in Review: 3rd Quarter 2009

The 4A's maintains an analysis of published agency review/search activity. An interim report covering activity through the Third Quarter 2009 is available by clicking on the link below.
 
The "Accounts in Review" analysis includes:
  • the account in review, winner (if known), incumbent, and finalists;
  • the nature of agency services that were reviewed;
    approximate billings and/or approximate agency revenue/gross income, where known (12 ranges are specified at the end of the report);
  • if a search consultant was involved, the consultant is noted;
  • the marketer's business sector is designated into 33 categories.

The Accounts in Review information is provided on a spreadsheet so members can readily sort the information. The 4A's periodically reviews and updates the accounts in review activity through out the year. Please send any additions or corrections to Helen Miranda (helen@aaaa.org).

» View Account in Review Analysis

Workin' for a Living

Mr. Robert Moorman
Mr. Robert Moorman
Director, New Business
Merkley + Partners
If you have not yet seen Rob Moorman's recent Adweek "Workin' for a Living" article, here is a link. Rob suggests action steps that agencies can take to improve the new business/agency search process.
 
Background: At last month’s 4A's New Business Committee meeting, the committee discussed (1) industry new business dynamics (2) problematic RFP and pitch behaviors (3) industry best practice guidance and (4) agency and marketer compliance with best practices. In the article, committee member Rob Moorman (CMO, Merkley + Partners) suggests:
  • If you think an RFP has too many questions, don't fill it out.
  • If you think you can't get access to the right people--or won't have enough time or that the field is too crowded, don't pitch the business.
  • If you don't want to give up the rights to your ideas, don't.
  • If you are unhappy with a midstream process change, drop out.
Sounds like prudent and implemental guidance, what do you think?

The Data-Driven Web: How Are Agencies Optimizing Targeting and Creative?

Mr. Bruce Biegel
Mr. Bruce Biegel
Senior Managing Director
Winterberry Group
During the 4A's Webinar "The Data-Driven Web," Bruce Biegel, Senior Managing Director, Winterberry Group, commented that "Agencies may currently lack the experience necessary for effective targeting and optimization."
 
What tools are you using to optimize display ads i.e. (1) audience targeting (2) site/media buying optimization and (3) message refinement...the right creative message on the right site?
 
For more information on optimizing the data driven web you can listen to the recording of the 4A's/Winterberry Webinar "The Data Driven Web" or you can access the Winterberry white paper "Data-Driven Online Display Advertising"  at http://winterberrygroup.com/ourinsights/wp.

Follow-Up Thoughts on Bringing Junior Staff to Pitches

Mr. Mark Schnurman
Mr. Mark Schnurman
Pitch Consultant and Founder
Filament, Inc.
After some spirited blogging on the topic of bringing day-to-day staff to pitches, there are three points that bubble up to the surface.
 
First – While it may seem obvious, bring people to pitches that present well. Everyone agrees that poor-presenting junior staff should not go to pitches, but agencies would be well served to make their senior staff clear the same high-bar that they set for the junior staff. Do not expect prospective clients to be able to see through poor communication skills to see the genius that is your poor-presenting VP.
 
Second – The bar is lower for junior staff.  When a VP gets up at a pitch and does a great job, the VP does not exceed the prospective client's expectations. Prospects expect to be wowed by VP-level staff. When a junior person gets up and does a great job, they exceed the prospect's expectations.  In addition, the prospect now thinks that every junior level person is as smart as the one that just presented. Make their part easy (perhaps the industry overview) but give them a chance to shine.
 
Third - If they (junior staff) attend, they talk. While it may be tempting to bring a junior person to the pitch but not give him or her a speaking part, think about the message that this sends to the prospective client. The only message that the prospect can take away from this is that while you are happy to bill the prospect 100% for this person, you do not trust the junior person enough to talk at the presentation. Not the message you want to send to a client. While we are on the topic, make sure to give the junior person a part that is five-or-so minutes long. Most presenters get better after the initial nervousness. If the part is too short, the client will only get to see them at their most nervous.
 
I am not suggesting loading up pitch teams with junior staff, but it may be smart to bring one or two people that will working with the client on a daily basis. They will need some coaching and plenty of time to prepare (no changing their part at the last minute), but the energy that they bring to the pitch may very well help you win.

The Client Mantra--Marketing Effectivenes: Effie Awards as an Agency Credential & RTB in Your Agency's Effectiveness

Ms. Denise McDevitt
Ms. Denise McDevitt
Associate Director
Effie Worldwide, Inc.
Clients face intense pressure to continually prove that they are generating positive results from their marketing investment. So, if Effie Awards are synonymous with "ideas that work" then isn't winning an Effie a technique for demonstrating that your agency’s work is actually working?
 
Agency new business credentials are structured to demonstrate that the agency understands the needs of the client and that the agency has a track record of applying creative, strategic thinking and solutions to moving the needle on their clients' business. In order to help 4A's members' new business efforts, the 4A's is collaborating with Effie Worldwide, Inc. to conduct The Effie Entry Workshop Webinar for 4A's members.
 
The Effie workshop and Webinar will provide 4A's members with access to the Effie Awards staff, who will explain the dynamics of Effie awards: how to enter, how an entry is judged, and insights on how to prepare an effective case. Effie's are not just for large global campaigns. Print, digital, TV or guerrilla--BtoB and BtoC--all work is eligible to win an Effie, so long the work has a demonstrable impact.
 
 
If you have thoughts on what constitutes marketing effectiveness and great case studies we'd welcome your comments.

What Can Agencies Learn from Coke's VBC Approach?

Mr. Thomas Finneran
Mr. Thomas Finneran
EVP, Agency Management Services
AAAA
The agency community reaction to The Coca-Cola Company's (TCCC) approach to Value Based Compensation (VBC) has been mixed.
  • There is some skepticism about whether Coke's approach is really a wolf in sheep's clothing--aka a way to cut agency compensation disguised as a strategy to recognize and reward value. Is that the real reason that TCCC's VBC approach is strategically geared to set base fees at a level where an agency can't make money?

  • There are agency concerns about the even handedness and equitableness that will be involved in the implementation and stewardship of a Coca-Cola type VBC arrangement.

  • There are concerns about the starting point for base fees, i.e. a historic fee database of payment ranges for similar categories of SOW projects. Is the historic database a compilation of "discounted" fees that are not really reflective of agency costs and value added?

  • "Current Value Considerations" seems like a legitimate and strategically sound approach for establishing a client value framework for a project or scope-based arrangement. However, how is an agency's "Current Value Considerations" factored into the determination of the base fee?

  • The Coca-Cola VBC scheme includes a P4P (Pay for Performance) overlay that sits on top of the base fee. Under TCCC's P4P approach, an agency can earn up to a 30% increase (mark up) on top of the base fee. To some, this seems like a client endeavor to dictate and manage agency profitability. To others, the skepticism pertains to the actual level of payout that agencies will achieve over time.

  • The Coke P4P criteria are a blend of criteria; prototypical structure is 40% qualitative (Agency Evaluation) and 60% quantitative (40% Specialist Metrics, 10% Marcom Metrics and 10% Business Results). There has been a good deal of industry discussion about the appropriateness of the criteria and weighting. 
The 4A's does not--and can not--endorse any one particular form or level of compensation arrangement. That being said, I believe that there is value insight and strategic learning that can be derived from evaluation of a Coca-Cola type compensation approach.
 
So…..What Agencies Can Learn from Coke’s VBC Approach?
 
Coca-Cola spent three years thinking about a workable approach to framing value. The strategic thinking, discipline, information and tools that Coca-Cola evolved in the creation of their new compensation plan is laudable.
  • TCCC collected, organized and analyzed a robust SOW project fee database that includes a significant amount (three years) of information across a broad range of activities involving a diverse blend of agency relationships. Agencies would be well served to develop their own database of historic fees (and costs) for appropriately similar types of engagements.

  • Agencies would be well served to establish criteria, tools and management responsibilities for applying the agency’s "Current Value Considerations" to all significant pricing proposals.

The types of agency value considerations that you might want to assess before finalizing a pricing proposal include:

(i) What are the "opportunity costs" related to the assignment? Does accepting the assignment create conflicts or other restrictions that potentially limit other agency growth possibilities? Could the premier people that are being allocated to the assignment be better utilized on another opportunity?

(ii) Are key--most highly valued--agency services, capabilities and personnel being charged at premium rates?

(iii) Are there learning, credentials or other "non-economic" benefits that the agency might derive from the assignment?

(iv) What is the agency's competitive advantage (or disadvantage) versus other agencies that realistically compete for the project?

(v) Are there client-side continuity, speed-to-market or other considerations that provide the agency with a favorable "negotiating" platform?

(vi) How important is the project to the client? What is the range of upside for the client if the program is successful? If there is a misfire what are the client’s risk?

  • In structuring P4P arrangements with a client do you have a point of view of the type of criteria (quantitative and/or qualitative), measurement tools and performance calibrating ranges that you feel are appropriate and reasonable?
Summary Observation
 
Pricing of products and services is normally the domain of the product or service provider. However in the marketing services industry many purchasers have begun to dictate the method that they prefer to use to purchase services. Given this industry dynamic, when iconic marketers like Procter & Gamble and Coca-Cola introduce carefully considered, highly visible changes to the way they conduct business it is reasonable to expect that other clients will evaluate the feasibility of structures that are either strategically or tactically similar to TCCC's VBC approach as well as P&G’s sales based-BAL agency compensation models.
 
The 4A's encourages agency members to thoroughly evaluate some of the recent client initiatives that relate to agency services and compensation including the Coca-Cola and Procter & Gamble models. As a prudent practice the 4A recommends that members develop a robust data base of pricing, servicing and cost information at the agency.
 
Finally, members would be well served to evolve alternative compensation strategies and toolkits as means to optimize agency pricing as well as manage over reaching compensation tactics that are advanced by client procurement groups or one-dimensional compensation consultants.

The Dangers of Agency New Business Social Media

Mr. Mark Sneider
Mr. Mark Sneider
Owner and President
RSW/US
Social/digital should play a part in any agency's new business development effort, however there are four things an agency principal should consider when building a program.
  • Social media is passive. Just because you are an avid blogger or tweeter, don’t think that all the chips will fall into place without any other effort;
  • Social media easily gets tired. You have to keep content current, fresh, up-to-date;
  • Social media is “no different” than regular media. There are thousands of others doing the same thing, so you have to boldly stand out and consistently be value-added in your messaging;
  • Social media should not be left alone. Social media is sexy and intriguing, but don’t rely on it as the sole means of your prospecting effort.
 
What lessons have you learned about the use of social media as a new business tool at your agency?
 
Mark Sneider is Owner President of RSW/US
Mark@rswus.com

To Bring Junior Staff to a Pitch or Not: That Is the Question

Mr. Mark Schnurman
Mr. Mark Schnurman
Pitch Consultant and Founder
Filament, Inc.
I was speaking at a 4A's workshop on new business the other day and, after raising the question of whether to bring junior (day-to-day) staff to a pitch, I was surprised at the responses of the group. There are certainly points to be made for each case. On the pro-side of bringing day-to-day staff, it is what every client is asking for these days; clients are looking for an opportunity to interview the staff that they are going to be working most closely with. On the con-side of bring day-to-day staff, what if they do a bad job at the pitch?
 
What are some of your thoughts?
 
Mark Schnurman
Pitch Consultant and Founder
Filament, Inc.
http://www.filamentinc.com
 
Mark also has his own blog you can follow at www.pitchtherapy.blogspot.com.

Rules of the Road for Agency Search Consultants

Mr. Thomas Finneran
Mr. Thomas Finneran
EVP, Agency Management Services
AAAA
In a recent communication with leading industry agency search and new business consultants, the 4A's reiterated the importance of preserving industry best practice by adhering to the principles that were jointly established by the ANA/4A's and embodied in the ANA/AAAA "Rules of the Road for Agency Search Consultants."
 
The association provided consultant organizations with the ANA/AAAA "Rules of the Road for Agency Search Consultants," asked each consultant to review the rules, and requested that the consultant acknowledge their agreement to abide by the principles and spirit of the rules by signing their endorsement and returning a signed copy of the "Rules of the Road for Agency Search Consultants" to the 4A's.
 
The link to the ANA/AAAA "Rules of The Road For Agency Search Consultants" is provided below.
 
 
The 4A's is in the process of updating the association's Agency Search and Agency New Business Consultant lists. The 4A's will note in association records the industry search and new business practitioners that adhere to industry best practice and endorse the ANA/AAAA "Rules of the Road for Agency Search Consultants."
 
The 4A’s recommends that all industry participants review and embrace agency search and new business best practices. If there is best practice guidance that you feel should be re-communicated or expanded we would welcome your suggestions.

Increase Your Revenues By Up to 20% Without Pitching

Mr. Michael Farmer
Mr. Michael Farmer
CEO
Farmer & Company, LLC
In this economic environment, where clients are requesting more service for less compensation, "Scope Creep" is an unaffordable drag on agency revenues and a drain on already squeezed agency profitability. Unfettered "Scope Creep" can result in 10%-20% swings in uncompensated agency services and reduced account profitability.
 
To help agencies develop Scope of Work planning and tracking as a core competence, I have partnered with the 4A's to suggest systems, cultural mindset, educational tools and techniques for linking scope of work to agency staffing plans and agency compensation.
 
 
 
Does your agency have a comprehensive system for planning and tracking Scope of Work?
 
Is your Client Management team accountable to make sure that agency services are "approved" projects within the agency/client agreement--prior to start work?
 
Do you have established a project management change order process with each of your clients?

1st Half 2009 Accounts in Review

The 4A's maintains an analysis of published agency review/search activity. An interim report covering First Half 2009 activity is available by clicking on the link below.
 
The "Accounts in Review" analysis includes:
  • the account in review, winner (if known), incumbent, and finalists;
  • the nature of agency services that were reviewed;
  • approximate billings and/or approximate agency revenue/gross income, where known (12 ranges are specified at the end of the report);
  • if a search consultant was involved, the consultant is noted;
  • the marketer's business sector is designated into 33 categories.

The Accounts in Review information is provided on a spreadsheet so members can readily sort the information. The 4A's periodically reviews and updates the accounts in review activity through out the year. Please send any additions or corrections to Helen Miranda (helen@aaaa.org).

4A's Members: Download the Latest Accounts in Review Spreadsheet Here

Best of RFI's & RFP's

In previous 4A's BizDevBlog posts (3/18 "Frustrated With RFP's From Hell;" 4/6 "Why Are RFP's so Difficult?" and 11/18 "Winning RFP Proposals") members and industry experts suggested features that are or should be included in "Best RFP's."
 
"Best Practice" features include:
  • Give the agency insights into the client's business problems and needs
  • Dimensionalize what is lacking in the client's current agency relationships (i.e. why the review is being conducted)
  • Contain a well crafted brief and specific agency search and selection criteria
  • Crystal clear deliverables…Client deliverables and agency deliverables
  • Explains why your agency has been invited to participate in the review
  • Fosters "two-way" communications through both agency and marketer questionnaires (for example the 4A's Standardized Questionnaires + Toolkit)
  • Encourage agencies to ask questions and provide frank answers to critical questions including budgets, approvals and compensation
  • Introduce human components—encourage discussion
  • Frame cultural beliefs and foster joint discussion of relationship expectations
  • Process includes "work sessions" for jointly developing a spec brief, strategy and interim ideation approaches
  • Reference research and metric parameters that the marketer feels are relevant
  • Search criteria should specify key decision makers and include specific weighted criteria including expectations for capabilities, chemistry, process, spec and $$$$$.
The 4A's New Business Committees would like to gather your "Best of RFI’s-RFP’s Process" comments and suggestions so that we can craft a 4A’s recommended process. Should there be separate distinct RFI phase and then an RFP phase?
 
Please submit your comments below.
 
Posted by 4A New Business Committee: Mitch Caplan, Dave Lubeck & Tom Finneran

Worst of RFI's & RFP's

In previous 4A's BizDevBlog posts (3/18 "Frustrated With RFP’s From Hell;" 4/6 "Why Are RFP's So Difficult?" and 11/18 "Winning RFP Proposals") members and industry experts flagged "Worst RFP Practices" and suggested alternative approaches that can allow agency and client to achieve their objectives more effectively and efficiently.
 
"Worst RFP Practices" that have been mentioned include:
  • Out of Control Questionnaires: one infamous questionnaire included 281 questions (only about 10 of the questions related to marketing)
  • George Foreman Cooking (Applica Inc) wanted agencies to mail in strategy and creative executions
  • Blind RFP's (for an undisclosed marketer) are always a worst practice
  • Excessive long list of candidates
  • Too many "finalists" presenting ideas and executions (for example Amazon with 9 or Zappos with 12)
  • Scope and budget keeps changing during the RFP process
  • Clients remain remote and inaccessible
  • Unnecessary or unreasonable client requests for financial details
  • Client's insisting on ownership of all ideas and work [even if the agency is not selected]
  • Auctions particularly when participants are not identified or when auction process is not conducted by an independent third party
  • Failure to disclose any client mandatories is a waste of everyone's time—If location, time zone, compensation method or price, size, etc are "must have" then these requirements should be clearly articulated up front
The 4A's New Business Committees would like to gather your "Worst RFI's and RFP's Practices" comments along with suggestions of alternatives so that we can craft a 4A's recommended process. Should there be separate distinct RFI phase and then an RFP phase?
 
Please submit your comments below
 
Posted by 4A New Business Committee: Mitch Caplan, Dave Lubeck & Tom Finneran

P&G’s Sales-Based Compensation & BAL Model: How Can This Strategic Approach Be Applied to Other Agency-Client Relationships?

Mr. Rich DelCore
Mr. Rich DelCore
Financial Director, Global Market
The Procter & Gamble Company
In a 4A’s Webinar, P&G’s Rich DelCore and Cindy Deihl, along with Saatchi’s Jane Wagner (BAL-IAMS), discussed the expanded P&G sales-based agency compensation approach and the “Brand Agency Leader” model for driving brand growth by facilitating IMC strategy and planning.
 
P&G discussed alignment of interests geared to drive superior business results over time by embracing the following core principles:
  • Value Definition: focus on superior business results rather advertising or execution.
  • Degree of Unification: a single compensation budget and strategy planning process.
  • Relationship Structure: long-term relationships and compensation based on value and results.
  • Degree of Flexibility: ability to shift resources, funding and metrics among integrated disciplines.
  • Holistic Brand Building: integrated master planning, a brief for each initiative.
  • The Benefit of One: one check, one brief, one cohesive message.
  • BAL (Brand Agency Leader): coordinates all agency partners, “seat at the table” for all agencies, shared rewards for brand success.
  • P&G Franchise Leader: approves BAL, partners and final creative, rewards all agencies based on brand revenue.
We’d like to know what you think about P&G’s approach to brand building, agency relationships, value-based compensation and integrated marketing communications.
 
Do you plan to explore a “P&G-type” strategic approach with any of your marketing services relationships?
 

Client Perspectives: Agency Selection Fundamentals That Win Business + Build Relationships

During the 4A's Webinar "Client Perspectives on Agency Search and Selection," four marketers shared their perspectives on business development:
  • Kathy Witsil (Chase Credit Cards) challenged marketers to be clear about the objective of the search and challenged agencies to honestly assess whether their capabilities are a good fit with the client’s needs.
  • Katherine Beede (TJX-HomeGoods) suggested that agencies obtain "rock-solid" information about the brand at the start of the review. The agency should then ask lots of (intelligent) questions, understand the client's challenges, and work with the client to "nail the strategy first."
  • Mary Miller (PetSmart) encourage clients to "define the critical intent" of the search, i.e. Why? and What? The agency and client then need to take the time to define expectations: discuss how to build the relationship--goals & roles, communications and meetings guidelines plus organization and operating structures. Mary emphasized the importance of gaining alignment before starting the assignment—brief development (Strategic & Creative); approvals; timelines and milestones.
  • Andrea Riley (ally) reviewed "Rules of Engagement." Make your first impression memorable, do your homework on the client’s business, differentiate your agency by being simple and brilliant.
BizDevBlog readers, what are your observations about these client perspectives? Did the client panelists cover the key fundamentals? Did they miss anything crucial? Are there barriers that making adhering to the fundamental a challenge?
 
Posted by the 4A's New Business Committees

Twittering Away on Business Development

Mr. Theodore LaBarbera
Mr. Theodore LaBarbera
Web Editor,
AAAA
Back in April, the Current Television Network made waves in the new biz community by boldly soliciting agencies to respond to an RFP for an account review via Twitter, the popular upstart social-networking site usually filled with 140-character comments on what users had for breakfast or other pithy commentary.
 
What made the move so innovative, though, was that it forced agencies to embrace their inner digital selves and admit that they were either already engaged with new media – thereby in the loop enough to receive the RFP – or they weren’t with the times.
 
Beyond this development, though, it’s becoming clearer and clearer that social networking is fast becoming a staple of the average New Business professional’s toolkit, if it hasn’t already.
 
For instance, did you know that there was a growing and passionate community of users on Twitter dedicated to discussing agency new business best practices and sharing their own experiences? A quick search indicates several dozen tweets from the past week alone, all marked by the hashtag “#adagencynewbiz” (for the uninitiated, “hashtags” are Twitter’s simple means of sorting and aggregating content on a particular topic, acting as real-time keywords).
 
In addition, whole blogs and other social communities have arisen in pursuit of the perfect pitch, such as Michael Glass’s Fuel Lines and – of course – this very blog you are reading right now. Even Facebook has a group dedicated to “Ad Agency New Business,” although it’s languishing away with only eight members currently.
 
What about you? Are you currently utilizing the resources of the Internet Business Development Community to strengthen your own proposals and strategies in these rough economic times? Share your own best experiences and favorite sites in the comments to this post!

Dr. Jodi's Prescription for Pitch Preparation

I spent eighteen months delving into the minds of clients, agency personnel, and search consultants. Respondents all had significant experience in pitching and described the pitch process as stressful, exhilarating, tiresome, energizing, and deflating.
 
My research revealed that agencies encounter their fair share of challenges during a pitch process. This is largely an issue of control; the client (or consultant on behalf of the client) calls all the shots, is always right, and leaves agencies little choice but to just follow the rules and deliver...right?
 
In addition, in this stressful economic climate, agencies may feel as if they have to do whatever is asked and required by clients in order to stay afloat. The results of my study support three key recommendations that could potentially benefit agencies when participating in a pitch process.
  1. Build a Cohesive Agency Team
  2. Avoid Spec Work Like the Plague
  3. Insist on Collaboration Meetings

The Coca-Cola Company's Value Based Compensation Approach: What Do You Think?

Ms. Sarah Armstrong
Ms. Sarah Armstrong
Director, Worldwide Media & Communication Operations
The Coca-Cola Company
In a recent 4A's Webinar, Sarah Armstong of The Coca-Cola Company described TCCC's unique approach to Value Based Compensation. Coke's new compensation plan features the following tenents:
  • Coke establishes a base fee for a project;
  • The base fee is established through a combination of past fee amounts (adjusted to remove the profit component) plus/minus Coke's "current value considerations" (such as budget, strategic importance, talent assigned, industry dynamics, etc.);
  • The base fee is not directly tied to agency labor or cost;
  • Coke adds a pay for performance (P4P) overlay that allows the agency to earn +23% margin (+30% mark up) on the base fee; and
  • The P4P criteria (and weighting) include Agency Evaluation Score (40%-50%), Specialist Metrics (40%-50%), MarCom Metrics ( 10%) and Business Performance Metric (10%)
We'd like to know what you think about TCCC's VBC approach. Do you plan to discuss a “Coca-Cola Type” VBC arrangement with any of your clients or prospects?

An Account Not Lost

Mr. Richard Roth
Mr. Richard Roth
President
Roth Associates
The press is full of news on the latest accounts on the move, but seldom do they address accounts that stay married. Not losing an account is equivalent to winning one.
 
So...who at your agency (and client) is responsible to make sure the relationship is in good shape?
 

Making the Tough Decisions

Mr. Mark D. Goldstein
Mr. Mark D. Goldstein
Vice Chairman/Chief Marketing Officer
BBDO North America
Every single screw up, every lost account, every embarrassing pitch can be traced to one thing: a bad decision.  Not a bad intention, but a bad decision.
 
New Business is a series of tough decisions—from the galactic (like what kind of agency are you) to the infinitesimally tiny (who sits where in the pitch).  I’m here to tell you that you cannot win continually if you don’t pay extraordinary attention to both.  Your batting average (which for the non baseball fans among us is your percentage of wins to pitches) will be in direct proportion to the quality of your decisions.
 
One of those decisions was to never involve incompetent people in pitches.  I know that sounds funny, but you’d be amazed—or maybe you wouldn’t—at how often agencies hand over critical responsibilities to people who couldn’t handle them.  Those days are over.
 
I personally think that if you make the right decisions, you’ll win 3 out of 4 pitches.  And in batting .750, we’ll be light years better than every other agency in the world.
 
In my experience, there are fifteen crucial decisions.  Here are seven of them.
 
1. Deciding who decides: How do you decide who makes the call?  Just because someone can run an account doesn’t mean they can run a pitch.
 
2. Deciding who to pitch: How many of you have pitched a piece of business and known every step of the way that they’d be a bad client?  You need a screener for how you decide.  We have five criteria, and a client needs to hit all five for us to get excited.
 
3. Deciding on the team: Keep in mind that the pitch pursuit team doesn’t have to be the presentation team.  There’s getting prepared to win, and then there’s winning.  Different skills are required for both.
 
4. Deciding whether to pitch: This isn’t about the client, or the opportunity, or the size, or anything.  It’s really about the most precious thing you have: the energy and enthusiasm of your people.  There are some agencies who squander it on anything that moves.  Then they wonder why they can’t get the blood boiling when something exciting comes along.  Every time you’re faced with a pitch decision you have to say to yourself, "Is this worth me turning on the machine?  Can I get the enthusiastic support and passion of the team?"  If not, don’t pitch.
 
5. Deciding whether a client’s right for you: This is different than deciding who to pitch.  Often you can choose to pursue a client for all the right reasons, and then comes the chemistry meeting.  Sure, they’re interviewing you.  But are you interviewing them?  Do you make it clear—not just in your own mind but right out in the open—what you expect from them?
 
6. Deciding what to present: How many of you have sat in a pitch knowing you were presenting too many campaigns?  Or the wrong work?  Never think you’ll win by figuring out what the client wants to hear.  What they want to hear, and what they need, are virtually always different.  Trying to second-guess what the client wants means you don’t have a point of view.
 
7. Deciding who should present: I have one rule that is unbreakable.  If a person’s not a world-class presenter, they don’t get to present.  Period.  It doesn’t matter how important they’ll be on the business.  It doesn’t matter how much work they did on the pitch.  You’ve got one job in a new business pitch.  To win.  And a mediocre presenter can bring the proceedings to a screeching halt.  How do you tell them they don’t get to be in the room?  It’s easy.  Tell them they don’t get to be in the room.

The High Cost of Free

Ms. Jane F. Bedford
Ms. Jane F. Bedford
Founder
The Bedford Group
Clients are demanding more and more "free" work from agencies as a hurdle to winning new business.
 
Even when the client requests that there be no "spec work" at a particular stage, many agencies spend enormous amounts of time and money to do just what they’ve been given a “hall pass” to avoid. As a matter of course, the clients accept these gifts because, after all, the agencies are doing it for "free."
 
With the cost of pitching business growing higher and higher with speculative work shouldn’t we all act more responsibly? It's a recession for heaven’s sake!
 
 
Does Jane's call to action make sense? Can agencies differentiate their offering and can a client make an agency selection without spec work? We’d welcome your comments.

The Element of Surprise

Mr. Thomas Finneran
Mr. Thomas Finneran
EVP, Agency Management Services
AAAA

The Element of Surprise….Why, How & When it Works?

 

The starling performance of Susan Boyle singing “I Dreamed a Dream” on Britain’s Got Talent is a powerful reminder of how preconceived expectations can be way off the mark. Ms Boyle has touched the world. She is a great example of the power of being genuine and the dramatic impact of the “Element of Surprise”

 New business folklore includes numerous interesting case stories about the power of being genuine and the impact of appropriately and relevantly adding an element of surprise in a new business pitch.

 What are your most memorable examples and most effective experiences with “The Element of Surprise”?

What has worked ? What has backfired?

 Tom Finneran

Why Are RFP's So Difficult?

Ms. Judy Neer
Ms. Judy Neer
President
Pile & Company

During her recent Tips, Tools, and Tactics Webinar, Judy Neer suggested seven effective RFP habits:

1) Don’t just mail it in
2) Make everything relevant
3) Explicitly address the criteria
4) Know the venue
5) Let the agency culture come through
6) Succintly communicate who you are
7) Remember the Client

Challenge from Tom Finneran, EVP, 4A's Agency Management Services: Judy's advice sounds simple and straight forward, so...why are RFP's so difficult?

We'd welcome your comments. Is Judy oversimplifying the "RFP Challenge?"

Are agency brochures & reels outmoded?

For years, we have relied on oversized brochures and TV reels to introduce our agency and capabilities to prospects. But neither seems to be quite right anymore because:

1) With increased focus on sustainability, we rarely hand out copies of our brochure these days.

2) As we do more with non-traditional media, TV reels don’t show a complete picture of our capabilities and could create a perception that we are out of step with the times.

3) The Web has gained importance for promoting our agency, but we’re finding that we would like to have something to send/leave with a prospect that provides insight into our credentials and work.

I’d love to hear how other agencies that are facing a similar dilemma  are doing about presenting their credentials and capabilities. Please comment on:

-- How is your agency packaging its credentials to be more relevant in today's market?

-- What types of pieces/mediums do you use?

-- How are you packaging "difficult to show" capabilities, such as viral, search, and public relations?

Diane Woodruff, Director Business Development, Cronin & Company

Frustrated with RFP's from Hell?—Stop Carping and Do Something About It!

Agency biz dev execs are telling us that the RFP process is getting out of control. So, to that extent, I have two questions:

1) What are the issues?

2) What should the agency community do about it?

Please let us know your thoughts!

The Importance of Agency Culture in Tough Times: An Invitation and Question for Agencies

Ms. Lorraine Stewart Rojek
Ms. Lorraine Stewart Rojek
Principal
The Rojek Consulting Group
It’s a simple theory that we have held fast to for some time, or some might say even originated within the industry: the notion that the cultural compatibility between client and agency is the greatest indicator of teaming and relationship success. In our agency search consulting practice, we take the organizational culture of the client into consideration when helping it find agencies to meet its needs. My daughter jokingly refers to Rojek Consulting as the “eHarmony of the Ad Business.” I suppose it is the short answer to the kitchen table question from kids, “what is it that you actually do, Mom?”
 
In any event, we want to learn more. We recently launched an agency culture study in collaboration with the 4A’s, for the benefit of its members. Data collection is through our Web site. The purpose of this blog, however, is to invite your feedback as to what might be the highest value to you – the agency community – on the subject of corporate culture within the advertising industry. The link to the study on our site is at the end of the post should you just want to cut to the chase, or pen a response.
 
In the meantime, I’d like to share why, even in depressed economic times, this subject is worthy of your attention:
 
1) Articulating one’s organizational culture is a source of competitive advantage. How an agency is positioned vis-à-vis its competitive set – with a clear communication of its value proposition – is essential when communicating with prospective clients who seek to know what makes any one agency different from others, and what it might be like to work with them.
 
2) Agency leaders should articulate an agency culture and value system for the benefit of agency employees because it is essential for agency credibility and reputation management. “Culture” is part of the promise that an agency makes to its clients. If the culture is not clearly understood internally, the agency employees will not be able to fulfill that promise.
 
3) Creating a dialogue on the alignment of value systems between client personnel and agency talent is a critical factor in team building. It helps set expectations, establish norms and protocols, avoid problems, resolve conflicts and generally help people know how best to work together.
 
4) Agencies should evaluate prospective clients and new business opportunities through a cultural lens, being careful to work with clients who value what they are all about, with shared understanding of important values like innovation or risk taking and the behaviors that apply to them.
 
The simple truth is that people seek comfort and find solace in their harmonious relationships with others when the world at large seems brutal. Conversely, people are incrementally stressed by relationships that do not work.
 
We are happy to partner with the American Association of Advertising Agencies on a new Agency Culture Study, the findings of which will further illuminate understanding of business practices regarding agency culture.
 
To participate in the Agency Culture study log onto: www.rcgconsulting.com/agencies
 
If you want to dialogue on what would be important to explore or learn about the topic, we are all ears.
 
Thanks in advance for your response!

Putting Value Pricing to Work: How to Get Started Down the Path to Compensation Based on Value

For the past several years Ron Baker, Tim Williams and the 4A’s have been encouraging agencies (and advertisers) to explore agency compensation that is based on the value of agency services and the benefits derived by the client rather than being based on the cost of agency services. In the recent 4A’s/Ignition Consulting Webinar “Putting Value Pricing to Work,” Ron and Tim discussed the range/continuum of pricing options that can and should be considered, methods of calculating a value price, case examples of agencies that have successfully adopted value pricing, and steps agencies should consider to get started down the path to value pricing.
 
Agency business development executives may want to consider five important and foundational steps that can help get your agency started:
 
1) Gain Internal Alignment
 
The agencies that have consistent success with value pricing have a strong internal alignment within the agency management team that they want to be paid based on the value of the agency’s work. These agencies understand that pricing must be an agency core competency and they have made a commitment to aggressively recommend performance-based pricing with ALL clients and prospects.
 
2) Appoint a Value Council
 
Establish a leadership team within your agency that has the responsibility and authority to construct and experiment with value compensation arrangements, track key performance indicators that are the basis of outcome-based arrangements and ensure that the agency is continuous learning about pricing, negotiating and articulating agency value.
 
3) Every Assignment Is a Value Pricing Opportunity
 
View every client assignment or new business proposal as an opportunity to think creatively about compensation and pricing. Get smart people at the agency to think beyond hours and cost and to consider how else the agency can be paid for what you do
 
4) Test and Learn
 
Pricing is no different than any other discipline…pricers need to test, experiment and learn in order to refine both the communications and financial  benchmarks that are used to establish prices. Gradually, over time and with experience, your ability to price will get better. Your agency’s ability to customize techniques and calibrate payment based on performance will improve.
 
5) After Action Reviews
 
Establish a formal process for reviewing pricing and servicing lessons learned and opportunities for improvement following every assignment. For evergreen assignments, the After Action Review should be conducted no less than annually (a sample AAR can be obtained by contacting Tim Williams at Ignition Consulting, twilliams@ignitiongroup.com).

New Business Imperatives for 2009: Cleve Langton's Top 10 "Do's and Don'ts"

Mr. Cleve Langton
Mr. Cleve Langton
Founder
New Business 3.0, Inc.
At the 4A's New Business Transformation Workshop in Chicago, Cleve Langton, founder of New Business 3.0 Inc and author of New Business Lessons from Madison Avenue discussed 2009 new business imperatives. Cleve summarized his imperatives with 10 suggestions:
 
10. DON'T pitch everything that walks – be selective.
 
9. DON’T stretch the truth on the RFP – it's a two-way exercise.
 
8. DON'T use a team member if he/she is a weak presenter, no matter how smart they are.
 
7. DON'T go overtime no matter how brilliant you think the content is.
 
6. DON'T stop at a communications rationale – it must be tied to a business ROI.
 
5. DO follow-up with methodical, pre-planned steps. No follow-up – no passion or commitment – love 'em and leave 'em.
 
4. DO have 3 rehearsals even at the expense of excluding last minute "flashes of brilliance."
 
3. DO ask questions throughout the process and make sure you proved you've listened.
 
2. DO identify the 3 key points that you will reinforce throughout your presentation and validate where possible
 
1. DO make sure that there’s tight (left brain) linkage between the strategy and creative solution.

Confidentiality of Marketing Services Information

Recent industry tactics have emerged that potentially compromise the confidentiality of media and marketing services information, including media rate information and agency compensation information. To address these matters, the 4A’s Board of Directors approved a position paper that relates to the confidentiality of media and marketing services information.
 
AAAA recommends that agencies remain vigilant in protecting confidential media and marketing services information arising in connection with the agency’s work for its clients. Such information should not be disclosed, directly or indirectly, without at least obtaining the prior consent of all parties having a potential interest in protecting the information.
 
The 4A’s recommends that, in advance of sharing Confidential Information with a customer, supplier or advisor (or a potential customer, supplier or advisor), the parties should:
  1. Agree on the definition of what constitutes Confidential Information;
  2. Clarify the purpose for sharing the C.I.;
  3. Frame appropriate restrictions on access to and use of C.I.;
  4. Specify requirements for the return or destruction of C.I. at the end of the engagement; and
  5. Formalize the terms of the confidentiality understanding in a binding agreement (for example: a non-disclosure agreement or in the confidentiality provision of your agency-client contract).
The 4A’s position paper reiterates the importance of adhering to agreed upon confidentiality terms prior to sharing confidential information with search consultants, compensation consultants, auditors and other third parties that may gain access to agency confidential information. The 4A’s recommends that agencies involve competent counsel in drafting and reviewing all agency agreements.
 
To facilitate comprehensive discussion between agency management and legal counsel, illustrative client-agency “Confidentiality” contract provisions and Non-Disclosure Agreements (NDA) covering clients, prospects and consultants can be obtained from the 4A’s Management Services Division.
 

Arrogance or Insanity?

Mr. Stephen Boehler
Mr. Stephen Boehler
President
Mercer Island Group
I've had discussions with several very senior agency folks from many of our top agencies over the past few weeks, and have an unsettling reaction to what I'm hearing. Either there is widespread arrogance—or widespread insanity—at the most senior levels of many of our finest agencies.
 
Let me explain. The conversations have started off (as many water cooler discussions undoubtedly do) with a great deal of bemoaning about the economy and the prospects for this year. Upon hearing that less than rosy outlook, I inevitably ask "what are you planning to do differently in 2009 that will help your agency achieve your goals?" The answer has routinely been that the agencies plan more of the same. More effort. Being more aggressive. Really hitting on the reviews the agency is invited into.
 
This, my friends, is madness. 2009 is going to be a tough, tough year, and to think that you'll do better by just working harder, or that you'll somehow miraculously do a better job in 2009 than whatever you did in 2008? Well, that's just crazy.
 
It's time to draw a line in the sand and recognize that there are structural problems with client retention and with business development in the agency universe. It's time to put in place strategies that will prevent client losses. It's time for "new" new business strategies. It's time to learn how great sales teams really sell in other industries, as opposed to the generic new business pitches that are given in most reviews.
 
The good news is that the agency industry in the US is filled with remarkably talented folks. The rest isn't rocket science. It just takes senior leadership to take a stand and decide that doing the same thing over and over again and expecting different results is insanity.

The Marketing Services Value Chain---Business Development 1.0

During the recent 4A's Webinar on value pricing, Tim Williams and Ron Baker discussed fundamental steps to overcome client commoditization of an agency:
 
1st—Create real value for clients.
 
2nd—Measure and quantify the value that is created.
 
3rd—Communicate with your clients and prospects the value that your agency creates.
 
4th—Price agency services based on value rather than based on costs.
 
The principles of the Baker-Williams “Marketing Services Value Chain” seem to be relevant in any economy.
 
Do these foundational value principles represent an untapped opportunity for agencies in 2009? What do you think?

"The Marketing Forum"--Request for 4A’s Colleague Feedback

I’d appreciate feedback from the 4A’s new business community members that have previously participated in or carefully evaluated a Marketing Forum (Richmond Events) cruise. It seems to be significant investment in time and money. Based on your previous experience was the R.O.I. worth the investment? Did participation lead to legitimate new business leads? The promotional materials refer to a long list (+ 100) of client participants---.in your experience were the client participants legitimate decision makers?

Thanks for sharing your point of view.

Brad Bennett
Wildfire, LLC
Winston Salem, NC

What Is the Cost to Switch Agencies?

Ms. Joanne Davis
Ms. Joanne Davis
President
Joanne Davis Consulting, Inc.
After Tom Finneran sent the 4A’s Accounts in Review report, it made me think again about the cost of new business for both the client and agencies. So many clients immediately think a new agency will solve all of their problems. So many agencies love the headlines of being an agency finalist and, ultimately, a winner.
 
The cost to switch an agency makes me question the ROI for clients and agencies, versus working harder to repair the relationship or switch the agency team.
 
There are significant “hard costs” and “soft costs” for an agency to pursue a new client.
 
Agency Hard Costs: research, travel, production materials, freelancers, leave behinds, etc.
 
Agency Soft Costs: time of staff
 
TOTAL AGENCY COSTS: I remember a 4A’s study that averaged the hard and soft costs at $100K per pursuit.
 
What about quantifying the client cost to switch an agency?
 
Client Hard Costs: travel, briefing materials, consultant (sometimes), honorarium for finalists (sometimes)
 
PLUS: termination cost for incumbent agency—even though the terminated agency is technically supposed to work through to the termination period, we all know there’s a wind-down.
 
Client Soft Costs: time of staff
 
PLUS: disruption costs to existing programs, delays in marketing, time spent on incumbent wind-down
 
TOTAL CLIENT COSTS: can equal more than 15% of a client’s annual marketing budget
 
Considering that a review averages three months, the client is effectively without a functioning agency for 25% of the year. The “ramp up” period for the new agency is also three months—or another 25% of the year. Sure, the marketer will shift money to the new agency’s campaign, but the client costs to switch can be even greater.
 
It might be a good idea to quantify the client costs yourselves and use that as a mantra to find better client-beneficial solutions to keep your clients.

The Digital Services Your Clients Really Want

Ms. June Blocklin
Ms. June Blocklin
Partner,
Gilbert and Company
American agencies are pursuing a range of strategies to keep pace with the accelerating client demand for digital services. But the real question is whether the operations agencies are building are in line with what today’s clients really want.
 
The 4A’s commissioned Gilbert & Company to conduct opinion research among client and agency executives to compare and contrast their outlooks and plans. This post summarizes the findings of this study and draws implications for today’s agency leaders.
 
What are Clients’ Biggest Digital Challenges?
 
The top five client digital challenges include:
  1. Talent is scarce.
  2. Brand-building on the Web is new territory.
  3. Managing the interplay of media is complex.
  4. Disciplines need to align.
  5. Clients need to live with risk.
The Client Wish List
 
So what do clients want from digital agency service providers?
  1. Streamlined end-to-end solutions across the digital landscape
  2. Strategic, cross-discipline account leadership
  3. Search and social media understanding embedded in the creative development process.
  4. An institutional approach to digital innovation and trendspotting
  5. A scalable, global digital operation
  6. A new economic model that rationalizes costs to fit with the new digital marketing framework.
The overwhelming message from clients to agencies was “Integrate, Integrate, Integrate.”
 
The definitive digital agency solution does not exist today, according to clients. But it is within reach if leaders of digital and traditional agencies work to blend the strengths of each organization. Of course, clients are encouraging them to do so with alacrity:
 
“Agencies are fond of telling clients their principles. The only principle I am interested in hearing about now is the principle of evolution.”
 
 

New Business and Small/Independent Agencies

Mr. Randy S Snow
Mr. Randy S Snow
Principal and EVP, Creative
R&R Partners
They're a national advertiser and we’re a relatively small, independent shop…why would they hire us? That was the question recently when we found ourselves in a pitch for a national account against firms from at least two of the global conglomerates—with staff, resources and numbers we couldn’t hope to match. The key was not trying to match their raw numbers; instead, in the best traditions of ju-jitsu, we took take their massive strength and turned it against them.
 
How? By explaining that, as an independent, we can guarantee that the agency’s top people will touch their business on a consistent basis. By telling them that we won’t unearth some strange conflict based on a piece of business handled by an office in Kuala Lumpur. And by reminding them that, as an independent, we can concentrate on serving our clients rather than worrying about the numbers we have to send every 90 days to the analysts in Paris or New York.
 
Of course, most of that is obvious to those of us in the business…but new business prospects aren’t in the ad business. So what may be second nature to us is often news to them.
 
News that can swing the decision away from the global conglomerates and towards an independent.

You’re in Show Biz Now: Lessons Learned From a Casting Director

Ms. Donna Lynn Newton
Ms. Donna Lynn Newton
Partner, New Business Director
MediaCom
During the last 4A's New Business Committee meeting, we discussed generating ideas to improve the agency review process overall for all participants--marketers, agencies and search consultants--not just those of us in business development.
 
The discussion started me thinking about lessons I learned several careers ago during my decade spent as a casting director for film, television and theatre. Yes, it was a lot of fun, but not necessarily lucrative for those of you wondering why I segued into advertising! (In a later post I’ll broach what I know about casting a new business pitch from my entertainment experience.)
 
There are a lot of similarities across the marketing and entertainment industries, as we all know; both have primary goals to engage and entertain our target audiences and make them part with their dollars for our products. Looking closely at the process a creative team in film or theatre goes through to make sure they assemble the right performers to tell the story can yield nuggets applicable to agency New Business.
 
Let’s imagine the participants in a review roughly as:
  • Marketer Company as Director
  • Search Consultant as Casting Director
  • Agency as Actor
  • New Business Director as actor’s Agent

And what we create together--collaboratively--is the script, screenplay, and ultimately the finished piece that will captivate the audience’s imagination and allow them to identify and engage with our story. Over the next several posts, I’ll analyze each participant’s role in the selection process through the lens of an analogous film casting situation, with the goal of hopefully generating discussion around applying learnings from other businesses and industries.  So please chime in!

We’ll start with the role of the actor--the agency--since the majority of you are in business development at an agency. 

Actors have the least amount of power in a casting situation (sound familiar?). Many actors are auditioning for the same part; only one will be chosen. How can they tip the balance of power toward the goal of winning the role?

The best actors approach any new role by bringing everything they have to the table. So what exactly is that?

The single overriding factor is: they are themselves.

This has never been more true than in today’s cult of celebrity culture (we all know this from experience.  Chemistry almost always emerges as the trump card in a review “tie”).

In my experience, the very best actors--those most likely to get the role--brought way more than themselves to the table. They were always fully prepared for the experience of the audition, convinced that they could play the hell out of the part, and completely charged up to demonstrate that to the people on the other side of the casting table.

They had read the entire script and thought deeply about their character’s story arc, movitations and relationships in the script. They imagined the character’s life before the inception of the script, and what might be the future for this character beyond the story’s ending. They’d made some strong choices about how to embody that character fully and bring a real person to life onscreen or stage.

Yet they were flexible enough to listen to new or more detailed information given by the director or casting director, take that into their heads with everything else they’d prepared and make the appropriate adjustments to their interpretation--often after only thinking about it for a minute or three. In extraordinary cases, those of us at that table--the director, writer, and casting team--would see two very different, completely valid, captivating approaches to a key scene in our piece, played by the same actor, in the span of ten minutes. I witnessed many of today’s gifted actors – Calista Flockhart, Chris Cooper, Joe Morton, Willem Dafoe, Angela Bassett, Robert Downey Jr. and countless more – do exactly that early in their careers. And be good enough that if the camera was rolling, the director would have called “print!”

Probably the most important takeaways for agencies in this analogy are:

  1. Be who you are. Having a strong agency culture--one that can align with the client company culture--is critical. We must connect with our potential client--be certain we are “right” for them--or our relationship may be doomed to go nowhere or fade out after an initial infatuation.
  2. Be prepared. Be way prepared--we can never be over-prepared. Imagine the future of the brand.  Know the past history of the client. Understand their competitive situation. Dig for insights like a truffle pig.
  3. Be FLEXIBLE. Accept that there can be more than one correct approach to a client’s marketing situation. Listen carefully to everything your potential client and/or search consultant tells you. Demonstrate your ability in incorporate new ideas and information quickly. (Just to be clear, I am NOT advocating that we ask “how high?” when a marketer or consultant suggests that we jump into an impossible task).
Sidebar bonus:
A couple weeks ago I watched Tommy Boy--a very funny movie I’ve seen bits and pieces of dozens of times, as it shows up in rotation nearly as often as Seinfeld reruns--with my 12-year-old son. There’s a scene when Chris Farley explains to “Helen,” a waitress at roadside diner on a shift in between lunch and dinner, why he’s no good at sales and in the process manages to back-door convince her to get the kitchen to turn on the grills early.
 
The whole movie is a neat lesson in closing a sale, wrapped up in a shiny, relatively timeless fluffy piece of film. Take another look at it (savor the scene where Farley and David Spade drive down a highway singing the 70’s pop hit Eres Tu at the top of their lungs) and share some of your favorite “selling” characters and films on this blog.

The Procurement Perspective

Mr. J. Francisco Escobar
Mr. J. Francisco Escobar
President
JFE International Consulting, Inc.
On October 28th, I spoke at a 4A’s Finance Committee meeting and Webinar on the topic of “The Procurement Perspective: Understanding Procurement and Working Collaboratively with Client Strategic Sourcing.” I shared my perspectives on effective ways to interact with procurement in both a new business environment as well as with existing client relationships.
 
During the course of the discussion I provided background on Procurement’s roles and responsibilities and suggested rules for interacting with Procurement along with tactics for effective negotiations.
 
My suggestions for effectively interacting with procurement included:
  • Be inclusive, don’t treat procurement like the enemy.
  • Understand procurement’s key care-abouts.
  • Eliminate mystery and inefficiencies.
  • Be proactive, educate procurement about industry norms.
  • Focus on long term gains…Play to “Win-Win.”
The tactics for effective negotiation that I spoke about included:
  • Expect more, ask and demand more.
  • Initiate dialogue on value before talking about money.
  • Be stingy with concessions.
  • Say “no” one more time.
  • Provide alternatives on major sticking points.
In the current economic environment, clients are becoming even more focused on efficiencies. It is more important than ever for agencies to be open to and proactive in implementing process efficiencies, such as production decoupling, and communicating marketing value chain improvements.

The Best of…Top 10 Biz Dev Concepts

Mr. Thomas Finneran
Mr. Thomas Finneran
EVP, Agency Management Services
AAAA
The 4A’s has had the good fortune of having a host of industry experts share business development suggestions with our members over the years, and Management Services has picked out 10 particular quotes that I would like to highlight:
 
10) “Good ideas are getting funded—especially if they deliver data.” (Brian Martin, Source Martin)
 
9) “4A’s Agency Search is the go-to industry source for all things new business. Agency Search provides agency and new business information to over 50,000 visitors each year. If your agency does not have an up to date, comprehensive profile on Agency Search shame on you.” (Millward Brown and the 4A’s)
 
8) “You may not be able to win a pitch during the Q&A portion of a new business presentation, but you can lose the pitch if you don’t thoughtfully prepare how to answer—and who should answer—the prospect’s questions.” (Mark Schnurman, Filament Consulting)
 
7) “When interacting with procurement focus on long term gains. Play to win-win. The agency should initiate a dialogue on value before talking about money and provide alternatives on major sticking points.” (J Francisco Escobar, JFE International)
 
6) “Preserve ownership of agency new business search ideas, plans and work product.” (David Lubbars, BBDO, Candice Kersh, FKKS, and Nancy Hill, 4A’s)
 
5) “Agencies should ask clients/prospects three sets of value-oriented questions early on:
  1. How do you expect the agency to add value to your business, and how will you measure that value?
  2. Is there something specific to your marketing efforts where the agency is expected to add value, and how will you measure the marketing value?
  3. How can an agency add value to day-to-day relations, and how do you measure this component of value? (Dave Beals, Jones Lundin Beals)
4) “Successful client-agency relationships include shared vision and values, evergreen communication, and trust. It’s never too late to make repairs in a relationship.” (Lorraine Stewart Rojek, Rojek Consulting Group)
 
3) “The ultimate mechanism for agencies to regain control over business growth, pricing and margins is by independently developing and monetizing agency-owned and controlled IP. Pitch more selectively and pitch more efficiently; target a 20%-30% expense reduction and invest part of the savings in developing agency owned and controlled IP. (Tom Finneran, 4A’s)
 
2) “Clients are seeking change. They want balance between big-idea innovation and accountability. They expect channel-neutral communications with digital at the core.” (Catherine Bension, Select Resources International)
 
1) “Turn new business efforts upside down. Avoid account losses and organically drive current client growth by loving your current clients the way clients want to be loved. Learn to sell. That doesn’t mean giving theatrical presentations—ask the right questions and develop solutions to a client’s business problem.” (Steve Boehler, Mercer Island Group)

The End of Cold Calling

Mr. Tim Williams
Mr. Tim Williams
Founder, Ignition Consulting Group
Cold calling has always produced only modest results, and today’s avoidance-enabling technology only makes it easier for prospects to hide from your phone calls and ignore your e-mail. If you feel guilty for not spending enough time cold calling and cold e-mailing, here’s a really good excuse to stop: it doesn’t work.
 
If agencies spent more time and energy on making and marketing a relevant, differentiated “product,” they could spend a lot less time and energy on trying to sell it. Most of the agencies that constantly kick themselves for not devoting enough effort to “prospecting” are the same ones that have devoted below-average resources to marketing their own brand.
 
You need a multi-dimensional publicity plan…the only limit is the amount of creativity you apply to marketing your own brand. So, stop thinking sales and start thinking marketing, with how the product (your agency) is positioned in the marketplace.
 
For additional suggestions, download Ignition Consulting’s  white paper “The End of Cold Calling.”

Response to Diane Woodruff Re: Theater in New Business Pitches

Ms. Jody Sutter
Ms. Jody Sutter
Senior Vice President
Director of Business Development
MPG
Diane’s point about knowing your audience is an important one, especially when we have so many tools at our disposal – from the search consultant (if there is one) to LinkedIn – that make it easier to learn more about who your clients are.
 
Two other things are important to consider when plotting out your pitch theater strategy – is it relevant to the client’s business issues and does it relate to the theme that you’ve established for the pitch? If you can answer “yes” to both those questions, your pitch theater idea stands a much better chance of being successful.
 
Even better if your idea can live beyond the pitch meeting or provide a teaser for it. Recently we pitched a car company and we decided to send four employees on a cross-country road trip between our offices in New York City and their US HQ in California. Driving two of the client’s models, we got to test the product for ourselves and talk to people all over America about how they liked driving that brand (all captured on video, of course, and shown at the final meeting).
 
Now, I can’t claim that a “road trip” is a wholly original idea (I know because I’ve spoken to other new biz executives who did similar stunts for similar clients), but what made this idea really work is the blog that we set up and made available to the clients so that they could check in on the progress of our travelers as they journeyed east to west. Each night, our road trippers would make a posting, including photos and videos from the day’s adventures, to a secure password-protected site. Now, rather than being a rather expensive one-off, we were establishing a dialogue with the client during that important period leading up to the final presentation and the client got a bit of free (if somewhat informal) customer research.
 
Good pitch theater ideas are hard to come by and I also encourage brainstorming outside of the pitch team and the new business leader. Good ideas come from everywhere and I’ve found more often than note they come from someone who is not focused on the pitch assignment or bogged down with logistics.

Theater in New Business Pitches

I keep a file of lessons learned from new business pitches in my desk.  And, I actually do refer to it from time to time.  The interesting thing is that lessons learned in one pitch do not always apply to other pitches.  Each pitch is its own animal.  But there are some basic guidelines that seem to hold true across every new business pitch.  For example, in a highly competitive pitch situation, agencies need to work hard to distinguish themselves from the pack.  Smart strategies and big ideas do not always ensure a win – especially if they get lost in a sea of words.
 
The use of theater in pitches can help bring ideas and strategies to life.  And it can certainly help ensure that your agency is remembered after the client has sat through long days of back-to-back presentations.  But have you ever had “theater” backfire on you?   We almost did. 
 
We were pitching a large regional consumer brand.  It was a very important pitch for us and we pulled out all the stops.  We did research and came up with what we thought would be a winning strategy.  Our presentation was packaged to showcase our big ideas.  And, as part of the presentation, we’d planned to bring in several consumers who represented our target audience to talk about their self-perceptions and how the client’s product fit in their lives.  A powerful endorsement of our strategy and spec work. 
 
We were rehearsing our presentation one final time the evening before our presentation and everything was going off without a hitch, when the pitch leader was paged out of the room.  Turns out the client we were pitching was calling to tell us they wanted to low-key the presentation.  In fact, they wanted us limit our attendees to three staff members.  This caught us entirely off guard, since we had been in communication with the client throughout the pitch process and felt we had a pretty good handle on them.
 
This late in the game there was little we could do.  The pitch leader ran our plan of bringing the consumers in the room to talk about the brand, and the client highly recommended against our doing so since it would be too over-the-top for others we’d be presenting to.  So, we modified our presentation accordingly.  In the end, our presentation and ideas stood on their own merits.  We won the business. 
 
That experience did not turn us off on theater entirely.  In fact, we’ve used it in other presentations quite successfully since.  But we are always mindful of the following when incorporating an element of theater in our pitches:
 
Theater cannot be forced.  Theater for the sake for the sake of theater will come off as gratuitous.  Ideally, it is best used to demonstrate understanding or unique point of view on a client’s brand or customers, or to bring a breakthrough strategy or idea to life.  And, most importantly, know your audience.

Turning Your New Business Efforts Upside Down

Mr. Stephen Boehler
Mr. Stephen Boehler
President
Mercer Island Group
Agencies everywhere are finding new business development to be a greater and greater challenge, and, unfortunately, the business development strategies of most agencies are destined for failure:
  • Unattainable growth rates are often needed to achieve agency growth objectives.
  • The investment required and the low odds of winning pitches are debilitating.
  • The stress on organic growth is intense and rarely achieved.
  • Too much reliance is placed on a small group of senior “sellers.”
  • Difficulty “standing out” in pitches leads to expensive, wasteful theatrics.
  • Cold-calling experiences are generally unsuccessful and demotivating.
If you have experienced some of these challenges, your team is not alone! Most agencies face these challenges; hence an opportunity exists to reinvent the industry’s business development strategies. There is a better way—and if you start today, you may salvage 2009.
 
Agencies everywhere need to turn their business development strategies upside down. Instead of the classic priority order of:
 
1. Reviews
2. Prospecting existing relationships
3. Hoping for organic growth and praying you don’t lose accounts
 
Turn it around and re-invent your approach to each strategy:
 
1. Avoid account losses & drive organic current client growth by loving your current clients the way clients want to be loved. Evaluate each other and bond over the improvement opportunities.
 
2. Learn to sell. I don’t mean giving theatrical presentations. I am referring to asking the right questions and developing solutions to a client’s business problem—and then go get the accounts that you really want. Learn to bond with prospects over their business issues, as opposed to your capabilities. This approach will dramatically differentiate your agency.
 
3. Use your newly gained sales skills to improve your odds in reviews. Learn how to make presentations truly interactive and how to bond with your prospects in the first 5 minutes of a pitch.
 
Want to read more?
 

It's the People, Stupid

Mr. Chris Shumaker
Mr. Chris Shumaker
EVP and Chief Marketing Officer
Publicis USA
As the political season draws to a close, it seems fitting to borrow from a famous political campaign quote to concisely convey my point of view about what new business is really all about–people. Yes, we generate insights that lead to strategy, which produce big, giant ideas that resonate with consumers to the degree that they act with their loyalty and their wallets. And it is precisely this sequence of deliverables that our clients are seeking from agencies. So, it stands to reason that when clients seek a new agency partner, they ask for—and we provide—the insights and ideas they need for business and we need for a “win.” But, is that what clients really hire?
 
Agencies can get so caught up in the deliverables that they can forget about the delivery–the people. I have known pitch situations where clients have hired agencies with mediocre ideas delivered by people they trust and respect. But I don’t know of many pitch situations, if any, where clients have hired agencies with great ideas delivered by people they don’t trust or respect. Recently, a review consultant put an exclamation point on my belief by telling me that she has seen agencies come back and win after bombing an interim meeting during the pitch process. But, she has never seen that happen when the agency had poor or no chemistry with the clients. Never.
 
Casting is king. Be smart about who is selected for your team. Don’t just pick available people, pick the right people. No reluctant warriors…only people who have a genuine interest and passion for the business. Lastly, be a team, a real team. Don’t commit to the win, commit to each other that each person will give their absolute best. Don’t let each other down throughout the process and winning becomes a byproduct, even if you have a mediocre idea. Clients want a key insight and great idea, but that’s the price of entry. Recognize the winning difference is the people you put in the room, and you’ll be a genius.

Response to Jody Sutter and Diane Woodruff Re: When Client Conflicts Get in the Way of Pitching New Business

Mr. Thomas Finneran
Mr. Thomas Finneran
EVP, Agency Management Services
AAAA
Jody and Diane raised a host of interesting perspectives on the gnarly issue of client views related to agency conflicts. It has always fascinated me that clients’ standards for conflicts are vastly different and more restrictive for marketing services agencies than they are for other vendors and professional service providers—including management consultants, CPA firms, attorneys, etc. Several years ago the 4A’s issued a position paper on Conflict Policy Guidelines. The paper suggests five common-sense guidelines for assessing conflicts:
 
1) The agency servicing unit (agency brand) should be the criterion, not the holding company.
 
2) An agency office can be a valid separation.
 
3) Unbundled services are a valid separation.
 
4) Conflicts should be narrowly defined (brand vs. brand rather than at the marketer, corporate or division level).
 
5) Conflicts should be based on real competitive issues on a product-by-product and country-by-country basis.
 
Marketers that are seeking relevant expertise, deep insights and scale will derive operational benefits from adopting an intelligent interpretation of conflict parameters.

Winning RFP Proposals

Mr. David Beals
Mr. David Beals
President and CEO
Jones Lundin Beals
On October 23, I discussed Structuring Win-Win RFP's and Compensation Agreements during a 4A's Webinar. There are several tips, tools & tactics that I discussed during the Webinar that I would like to re-emphasize in this blog:
 
1) It is a difficult negotiating environment right now, so agencies need to do a better job of articulating their value and supporting their pricing rationale
 
2) Preparation is 90% of the battle.
  • Determine your "gotta haves" and "deal-breakers" in advance.
  • Ask the right questions of the client upfront (the 4A's Standardized Marketer Questionnaire is a good starting point).
  • Make sure you have sufficient credible information to develop a relevant proposal.
3) When developing a proposal, sweat the details, determine when/how viable alternatives can be presented, focus on the client's goals (not just the agency's cost) and be clear about what is included in the scope of the proposal and what is excluded.
 
4) Develop a negotiating strategy in advance—keep the negotiation focused on the client's goals and the agency's requirements. When negotiating, be creative and solution-minded. Stay objective. Bend but don’t break.
 
5) Watch for red flags:
  • Incentive approaches that are unrealistic or disguised fee cuts. Establish your reward-risk tolerances as well as goal criteria and measurement thresholds in advance.
  • Unreasonable or unnecessary client requests for financial details. Suggest alternative information such as aggregate or summary "fully loaded" labor rate information.
  • How low can you go? If your preparatory questions reveal that the client is basing their decision primarily based on price either provide a "best and final offer" or consider walking away.
6) Establish a formal after-action review plan that allows you to check original assumptions and estimates, monitor scope changes, and communicate value-added contributions and cost efficiencies that benefit the client.
 
Today's environment demands that agencies put as much discipline, thought and communication into pricing proposals as you do with your client campaigns.

Response to Jody Sutter Re: When Client Conflicts Get in the Way of Pitching New Business

As a mid-sized, full-service agency, conflicts are an issue we bump up against frequently. And, given our size, we do not have the infrastructure in place to create a total separation between conflicting brands within our organization.
 
I’m not so sure how much of it has to do with contract negotiation, since agencies are often asked whether a conflict exists very early on in the pitch process. It seems that most clients have an expectation that the agency they hire will not do business with their competitors. But we have found that clients vary in how rigidly they define competition, and in how hard they will push the point with their agency. So, we address conflicts on a case-by-case basis. Some clients are open to letting us work with another brand within their category, as long as it is not their top competitor. Some are okay with it, as long as the work is limited in scope (development of a Web site, for example) and does not overlap with the type of work we are doing for them. Others are less flexible. While this approach means that we walk away from some opportunities, there are others that have worked out for us.
 
I think what it comes down to is the type of relationship and amount of leverage you have with your existing client as well as how the client defines its competition. If you are offering them service and expertise they value and are unwilling to jeopardize, they may be more open to allowing conflicting relationships. If their view of their competition is very broad and ridged, you may need to be willing to walk away from that business to pursue clients that they perceive to be conflicts.
 
I think the problem with trying to resolve this matter up-front in contract negotiation is that contracts by their very nature usually don’t provide case-by-case flexibility and tend to establish a singular framework. Additionally, in contract negotiations when the parties are not really familiar with each other, clients will typically lean toward language and provisions that are more conservative and client-protective, which would make case-by-case negotiation more difficult later on.
 
I would love to hear about other agencies’ experiences and perspectives on this matter.

When Client Conflicts Get in the Way of Pitching New Business

Ms. Jody Sutter
Ms. Jody Sutter
Senior Vice President
Director of Business Development
MPG
In my experience at media agencies, it's extremely hard to pitch clients in the same, similar, and, at times, not-so-similar categories. There's a good reason for it: clients want to make sure that their media agency is pursuing category-relevant opportunities for their benefit and their benefit only.
 
There are some obvious cases (Coca Cola's agency can't pitch Pepsi without the certain consequence of losing the Coke business), but often the situation is not so cut and dry. Here’s a hypothetical scenario to consider:
 
Crunchy Cracker Company, with a large cracker, cookie and salty snack portfolio of brands, works with Mega Media Agency. Most of its top-selling brands have a respectable budget for marketing and media, but the company also owns a small saltwater taffy brand that gets almost no marketing dollars spent against it.
 
Mega Media Agency is presented with an opportunity to pitch Sweetime Brands, a major confectionary company with, you got it, a saltwater taffy brand in its line-up.
 
Should Mega Media Agency be allowed to pitch Sweetime? Should a saltwater taffy brand with little or no media dollars invested against it jeopardize the important Crunchy Cracker account?
 
I run into these kinds of issues all the time, to the extent that sometimes I feel like my job is more about saying “no” than saying “yes!” As an industry, we need to explore effective tactics that can be used when clients want to set overly broad restrictions, barring agencies from pursuing legitimate opportunities. What are reasonable limits, and in whose hands lies the responsibility to maintain (or push) those limits?
 
Perhaps the answer lies in approaching contract negotiation differently (full disclosure: I am not responsible for negotiating the contracts at the agency I work for, but have held that responsibility at other agencies in the past). Are there expectations we can set at the beginning of the negotiation process that will result in a better definition of what a competitor is?
 
Another solution often put in place is a “conflict brand.” This is a start-up agency within a holding company that is unencumbered by a full roster of existing clients, allowing it to pursue a whole host of business categories. This can be a great solution, but it’s resource intensive, requiring the right investment to build, market and maintain a new agency.
 
This is obviously the media agency perspective. What is the approach at creative agencies and is it an approach we can learn from?

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

Mr. Robert Moorman
Mr. Robert Moorman
Director, New Business
Merkley + Partners
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.™

Response to Matt Anderson Re: Can Anyone Do Business Development?

Mr. David Lubeck
Mr. David Lubeck
Executive VP, Director of Client Services
Bernstein-Rein
Great thoughts Matthew. Like Deutsch, we're doing everything we can at Bernstein-Rein to promote a new business mentality within all aspects of our agency--especially in our relationships with current clients.
 
Just the other day I was looking at a survey conducted for the 4A's by MilwardBrown. The survey asked marketers what challenges and frustrations they have with their current agency and what triggered their last search for a new agency. The responses clearly indicated that, in many ways, we should treat our current clients with the same eagerness, proactivity and innovativeness that we treat prospects. Throughout the report, marketers made scary comments like these about their current agency:
  • "They don’t listen to our needs sometimes and just offer a somewhat generic solution."
  • "They don’t come up with enough ideas on their own."
  • "They don’t listen, do not seem to care about our business."
  • "I need fresh new ideas."
  • "I want someone with the ability to develop fresh new creative."
  • "They need knowledge of our business and to bring us ideas."
When going after new business, don't we all try to have a profile that matches what those marketers are looking for? Don't our current clients deserve the same commitment, constantly? We should be wearing our new business hat at all times.

Why New Business is Everyone's Business

Mr. Mitchell Caplan
Mr. Mitchell Caplan
Chief Marketing Officer
Young and Rubicam
I was at the recent ANA Conference and (surprise!) found myself at the bar before dinner. Before I knew it, I was surrounded by about a half dozen of my favorite people: the CMO's and Business Development Directors of some of the best and largest agencies in the business.
 
These are people I highly respect and admire. The agency business is tough enough, but being in the bull's-eye of arguably the most stressful and challenging part of the business is in my opinion one of the hardest jobs. These folks are great at what they do, but manage to also be some of the best people (and friends) you would ever want to have.
 
As I looked around at the group I realized that this group of people had become another one of the "communities" I belong to. We all speak with each other on a fairly regular basis (sites like Facebook and LinkedIn have only accelerated this), sharing, when we can, information about pitches, prospects, consultants, and the general business of new business.
 
One of the reasons I've been lucky enough to be at all successful at business development is because of what I’ve learned over the years from this group of professionals and others in the same line of work. Now, of course, it’s a highly competitive group. We all want to win all of the time. But all of the members of this community have always been open and fairly transparent about sharing best practices and insights when there would be no harm to their own firm.
 
It's an unusual state of openness among competitors. But I also think there is a genuine understanding that new business is a tough gig, so we all want to see others succeed (when it doesn’t come at our expense). In many ways, I think we all feel a responsibility to help each other when we can, as this is one of the toughest jobs you can have in the advertising/marketing business.
 
Part of the 4A's Mission is as follows:
 
"To improve and strengthen the advertising agency business in the United States by counseling members on operations and management, by providing the collective experience of the many to each, by fostering professional development, by encouraging the highest creative and business standards, and by attracting excellent people to the business."
 
That is in essence is the spirit of this blog. What you'll find here is commentary and suggestions from some of the best in the business. No state secrets, just a continuation of the spirit of the "community" that I described above, and the "counsel" that is a basic tenant of the 4A's Mission. One that benefits all of us, while allowing for us as an industry and as individuals to be the best we can at what we do.
 
As Chairman of the Large Agency New Business Committee, I encourage all of you, regardless of the size of your agency, to contribute to this blog, and to participate in what we hope will be a highly beneficial conversation about new business.
 
Now, did anyone hear anything about that pitch for… ;-)

Can Anyone Do Business Development?

Mr. Matthew Anderson
Mr. Matthew Anderson
SVP, Director of Business Development
Deutsch Inc.
New York, NY
Absolutely. In fact, it is crucial to the success of your new business efforts to make sure everyone is doing Business Development.
 
Business Development is a mindset as much as it is a practice. It’s not about mailers or cold-calling or even writing an RFP or managing an agency review. It’s about curiosity. It’s about identifying opportunity. And it’s about establishing and cultivating relationships. These are skill sets that almost everyone has on some level or another. (We have Google, Wikipedia and Facebook to prove it.)
 
So what now? How can we get people to put these skills to use for you and the Agency? Well, I would start by talking with them. Everyone. Not just VPs and up. Give people an invitation to contribute. Tap into their passions. Get to know what they’re jazzed about. Get them to identify a client or a category that interests them. Once you do this, you may be surprised how they stay on top of research, looking for opportunities to attack. If they are vested and feel like they have the ability to make a difference, they will.
 
Something else to consider: you may want to use the guise of Business Development to open up creative thinking to the agency at large. Give people an opportunity to do something they don’t normally do. Work on a client they don’t currently touch. Push people to challenge the status quo and think of ways to create buzz-generating programs for existing clients. This can breed some healthy competition. And if you’re lucky, it may result in organic growth opportunities and more firepower in attracting prospective clients.
 
For example, at Deutsch we started an initiative that takes existing clients and puts their business through an accelerated new business machine (two weeks max). It’s completely voluntary and anyone can work on it, regardless of level or department. The briefs are loose and consist of only three requirements: 1) make sure to stay on brand, 2) make sure it leads to buzz-generating work, and 3) make sure it makes business sense. All other handcuffs are off.
 
In our last initiative we had 12 teams, comprised of people at all levels and from a range of departments. Over a hundred ideas were presented. In fact, one of the directions ultimately led to the thinking that became the strategic foundation for the brand.
 
The fact is people want to help. And you and I both know that we could all use the help. You just have to involve and empower the agency to do it. I’ve made it sound easier than it is, but if you can do it I truly believe you and your agency will benefit.

Getting the Best From Your Agency

Ms. Nancy Hill
Ms. Nancy Hill
President-CEO
AAAA
On Oct. 25, I spoke at the ANA’s Agency-Client Forum on the topic of “Getting the Best From Your Agency.” It was an ideal opportunity for me to present the 4A’s perspective on the agency search and selection process to the 150 marketers who attended the meeting.
 
Marketers—rightly—are demanding that their agencies totally understand their needs; that agencies provide deep data, insights, and analytic know-how; and deliver true, quantifiable ROI for their marketing spending.
 
Whether it’s providing holistic communications strategies that penetrate the already crowded content options of busy, multitasking consumers, or simply creating beautiful, thought-provoking and effective ads, an agency’s role as a marketing-communications partner has evolved over the past few decades—and continues to transform.
 
For decades it has been customary practice for marketers that are contemplating an agency search to circulate questionnaires and request capabilities, credentials, financial, and other background information from advertising agencies.
Historically, this information tended to flow only in one direction, with agencies submitting information to marketers, while—all too often—very little, if any, operational and relationship information flowed back from the marketer to prospective agencies.
 
The truth is, this traditional search process is not optimal for either agencies or marketers. Imagine if a social networking site like Facebook or LinkedIn allowed others to see your entire profile, but denied you access to seeing any part of theirs. Not very cool, I’d say… Would you date or marry someone under those circumstances?
 
So, rather than a one-way exchange of critical information, a better, more mutually beneficial approach to agency search and selection is to establish a dialogue up front that’s geared toward helping marketers and agencies discuss business goals, marketing objectives and service expectations.
 
The process also should foster a two-way assessment of capabilities, compatibility and economic expectations.
This courtship—and indeed, the agency selection process is just that—benefits all parties immeasurably when the dialogue is honest, robust and fair, from the very beginning.
 
What the search process should not be is a mechanism for marketers to generate a bank of ideas and materials from agencies participating in the search process. Which again, isn’t very cool.
 
I believe that the client-agency dialogue process is a critical—and transparent—first step to align business interests between marketers and agencies.
 
In fact, it’s the 4A’s recommended best practice and a cornerstone of our “Standardized Marketer New Business Questionnaire,” which is available as part of our “New Business Toolkit” in the Agency Search Information Center on our Web site.

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