You Need New Business Insurance
The good news: heading into last year, ad agency employment reached its highest level since 2001.
Given the tumultuous and ever-evolving nature of the industry, especially post-2008, it’s fantastic to see-but from a new business standpoint, the good times tend to make agencies forget a few things.
New Business Insurance?
Why and what is this new business insurance I speak of?
Agencies and marketing services firms already have a difficult time with new business to start with: they tend not to have that new business chromosome, clients come first, so new business comes last and/or it’s difficult to find that individual who can drive new business successfully.
Add to that the above-mentioned good news: budgets are growing (albeit slowly in many cases), you’re hiring and some new business is coming in organically.
All positives in every sense of the word-except . . . in regards to new business.
Here’s why:
1. It Won’t Last
Well thanks for the kick in the ass Lee, don’t let the door hit you! In all seriousness, you know this to be true. Whether it comes from the new political climate, the economy or simply the cyclical nature of the business, some or all of this trend will change to a certain extent. I’m not talking ‘the sky is falling kind of stuff” (knock on wood), and not fear-mongering here, but it will change and you need to be prepared for it.
2. 33% of new business personnel remain at an agency a year or less, and another 46% hold the position only two years.*
The trend holds steady unfortunately. It has been, and continues to be, tough to find good experienced individuals who can sell agency services and break through to your ideal prospects. So have a plan: mount an employment search, find someone internally, or outsource it (yes, a small plug) but do one of these things now.
3. A large percentage of your business is focused on one or two clients
You know how this double-edged sword works. Great to have that stream of work from your biggest client-until that stream turns into a trickle.
4. Referrals Are Fantastic, And Not Consistent
I’ve spoken to this previously: referrals aren’t always the right type of client and more importantly, are not a consistent and scalable sole source of new business. Just as your agency experiences certain lulls given the nature of your clients’ businesses, referrals function in the same way.
So what is the insurance?
Well, you already know-it’s a consistent new business process.
It’s the insurance your agency needs (and must have) against a cyclical business environment, that client who represents too much of your billing, and, well, a lack of new business.
Embrace your success and your victories wholeheartedly, while simultaneously preparing for the alternative
