Building on the release of our 2019 RSW/US New Year Outlook Survey Report, Mark Sneider, Owner/President at RSW/US, covers the most notable highlights in this 2/14/19 webinar.

Mark talks the state of finding and winning agency new business, roster consolidation trends, client perceptions of agency ROI, and traditional ad spend expectations from agencies and marketers.

 

From our 2019 RSW/US New Year Outlook Survey, an interesting stat: for the first time in five years of our survey, the desire for specialist agencies dropped.

And dropped 7%.

OK, the sky is obviously not falling, 64% of marketers told us they’re looking for a level of specialization from the agencies they work with, but there’s still that dip.

It’s frustrating, to be sure.  Agencies are consistently told, you need to find a level of specialization, generalists will find it harder to break through and win the business. (Hey, we’ve said that!) More on that in a moment. First:

Why the decline and what does it mean for your new business program?

It’s tough to pinpoint why this might be.  It wasn’t an open-ended question in our survey (next year we should plan on that), so we don’t know precisely why, but a couple of thoughts:

  1. For small to mid-sized agencies (which are predominantly our client sweet spot) we often see those firms become the client’s marketing department to a great extent. That isn’t always the case of course, but when it is, that client looks to the agency to get it all done, or to partner with other specialized firms to get it done. This feeds into the ongoing agency consolidation we see in this year’s survey as well. So those clients may be seeking out less specialty agencies, and instead looking to their agency to do so.
  2. From “a senior marketer at a global advertiser who feels no other alternative exists but to take more control from agencies when they can’t be trusted to make the right calls” (Confessions of a marketer: Agencies forced brands to in-house more marketing) comes this quote:

I know people say the agency model is broken and that clients should pay more to fix it, but it’s hard to think that will solve things when you see how petty things can get when working with multiple agencies. Agencies know they need to collaborate — some even want to — but they don’t. And that’s because those businesses all have different agendas which aren’t aligned to mine, so they’re all just focused — understandably — on winning the biggest part of my budget, but in a way that sabotages other agencies on the account or campaign. I think it starts with looking at the business model of those businesses and how they adapt for the future.

This quote does bolster the consolidation trend I mentioned earlier, but I think it also lends itself to the dip in specialization as well. I would argue they’re mutually exclusive in this case, per my first example.

If this is the way marketers perceive multiple agency relationships, fairly or unfairly, then they’re going to stay with fewer agencies who can do the majority of the work, or, again, look to that firm to partner appropriately and let them orchestrate the relationships.

So what does “generalist” actually mean today?

I’ve talked to, and we’ve worked with, agencies who consider themselves generalists.  They’ll say, we hear that we should be specialists, but what we’re doing is working, why fix what isn’t broken?  Fair enough, and here’s the reason why it’s working-

They still have a focus.

It’s when agencies try to be all things to all people that problems arise. There’s nothing wrong with working multiple verticals, but as we point out in our report, you need to have a defined positioning.

Speaking the prospect’s language

I’ll leave you with this to tie it all together: marketers are still looking for specialists. We see it with our own clients, and as you can see, 64% of marketers in our survey backed that up. However, you can be a generalist, as defined above, and still show your prospects you’re the experts in the services you provide, or over the multiple verticals you service, but one thing to keep in mind.

I’ll illustrate it in a quote from a conversation I had with an agency principal recently:

We can speak the language if we get in the room.

Perfect, and needed, but here’s the question:

Are you speaking their language before you get in the room?

If you aren’t, throughout your prospecting, you’ll never actually get in the room.

We’re excited to announce the 8th annual RSW/US New Year Outlook Survey Report-available to download now!

Topics explored include the biggest challenges facing marketing agencies (as seen through the eyes of marketers and agencies), spending and investment expectations, the growth of specialty agencies, the importance of measuring ROI (which marketers and agencies don’t necessarily see eye-to-eye on), and the ever-increasing importance of data and analytics.

We’re kicking off a series of mini-infographics to highlight key takeaways from our 2018 RSW/US-Mirren 2018 New business Tools Report.

The first, which you can download here, is based on a question from our original survey:

What most impacts your consideration of new business tools?

Per our report:

Effectiveness or an ability to provide a direct impact was ranked as the most important consideration (78%).

Following in close proximity were efficiency, or an ability to improve new business productivity (62%), and ease of implementation and use (55%).

Surprisingly, customer service (11%) and integration with existing software & systems (14%) was not important enough to make the cut with the vast majority of respondents.

As tight as client budgets can be, and as important as profit margins are, agencies are making a definitive statement here: we need tools that provide not only a direct impact, but are effective, efficient and easy to use, and we’re willing to pay for tools that can do that.

A direct quote from an agency in our report sums this up well:

“(We want) a simple and reliable, no frills contact management software program.”

Even more interesting is customer service coming in so low as impacting the decision to invest in new tools-second to last!

I suspect that percentage is higher in reality, but, again, it shows the level of frustration and/or driving desire agencies have for simple, but effective tools.

Two more infographics to come in the next few weeks.

You can also download our tools report here.

If you’re not feeling it yet, you will. 

The changing agency and marketer landscape has significantly impacted the way agencies find and win new business.

No longer can agencies exclusively rely on referrals and networking to drive the success of their firm.

Once an almost exclusive source of new business for marketing agencies, referrals from marketers as a source of agency new business have dropped significantly since RSW/US first started measuring their importance as a new business resource in 2007.

In 2007, 94% of marketing agencies selected “referrals” as one of their three primary sources of new business for the firm.

Back in the day, agencies worked their networks and there was less of a need to actively and proactively search for new business.  Agency principals would network, the phone would ring with a new referral, and the business would grow.

Today there are more agencies going after fewer AOR opportunities.  There are more big networked agencies pursuing opportunities they would have never considered a decade ago.  There are fewer marketers because big conglomerates are consolidating companies and cutting staff.

In 2011, the number fell to 71%.

And in our most recent Marketer-Agency Survey, the importance of this source dropped to an all-time low of 64%.

So why the decline?

We believe one of the primary reasons for this decline is the fact that a significant number of marketers are now using in-house agencies.

In this year’s survey, 67% of marketers stated they had an in-house agency. 

Last year, 61% of agencies stated that the new business they won involved working with an in-house firm.  So it’s clear this trend is not reversing itself any time soon.  With more agencies sitting inside the four walls of a marketer’s business, there are fewer opportunities for marketers to be exposed to outside firms – thus lessening the number of potential referrals.

While this is somewhat concerning, I don’t expect this trend to consume the industry to the point of it going away.  Just like we have seen marketers ebbing and flowing on consolidating agencies and expanding rosters over the past decade, I suspect we’ll see the same thing here as well.  The other heartening statistic is the fact that most marketers are using in-house firms for basic design work and social media.  So while social media firms and one-off designers should be concerned, I don’t believe we will see wholesale shifts to full-on in-house firms – like we’ve seen at places like AARP.

Project “Sampling” on the Rise

In addition to the growing number of in-house agencies limiting the number of opportunities for new business, the other changing dynamic is the growth of project work (versus retained work).  This year 41% of agencies state that 51%+ of the business they received was in the form of project work.  While only a slight uptick from last year (40%), we see it each and every day.  Our clients are either winning project work outright as their first assignment with a new marketing client, or they are actually having to compete for project work – something they have never experienced before.

We suspect what is driving this growing trend to push out project work versus assigning a single or a couple of AORs, is the fact that there are simply so many agencies knocking on the doors of marketers.  In this same survey, 60% of marketers stated they receive 6-10+ calls a week from agencies, so the competition is fierce.  This creates less of a need to refer agencies or seek referrals when you have the ability to “sample” agencies via the use of one-off projects.

The risk for marketers is mitigated when all they have to do is push out a project, versus dedicate their entire business to a single marketing firm.

 

So…What is an Agency to Do?

It’s clear agencies can no longer sit back and wait for the phone to ring or rely on networking events to find new business.  In order to win new business, they have to get more aggressive.  If your agency isn’t reaching out to make a connection, there are plenty of others filling in for you.

So, some advice on how to offset the potentially weakening stream of referrals:

  1. Follow the PR firm example and define your “practice areas”. Where can you call out your expertise and convince marketers in this same space that you are expert in their space.
  2. Be relevant. Marketers tell us in our surveys that agencies talk too much about themselves.  Find out something about the marketer you’re reaching out to and have a conversation, not a sales call.
  3. Be persistent, but polite. If you don’t put together a full-on outreach program to stay in front of the marketers you want to work with – all the time – you will find it extremely hard to win.  You need to be part of their consideration set from the day you start your outreach, until the day you win their business.  Stopping and starting can cause you to miss what could be an incredible win for your agency

Be yourself.  Consider what Leo Burnett told his agency when he gave his valediction speech in 1967.  He told them to not forget what made their agency great – to never veer off of that path.

And he told them that if they did, he no longer wanted his name on the door.  So be what made you great and it will shine through to the marketer on the receiving end of your call.

My post title is a stat from our RSW/US 2017 Agency-Marketer New Business Report.  We asked agencies:

“Why is it harder to obtain new business?”

Per the graph above, the top answer was it’s simply harder to break through to prospects. I’ll get to that shortly.

Looking at the other reasons given, 38% of agencies said the reason is “fewer opportunities out there”. While I can only speak anecdotally, that’s not what we’re seeing with our own clients.

It’s true that in-house agencies are increasing (which we touch on in the report), turnover within the companies agencies pursue is still prevalent, and increasing competition all make the process of new business harder, but the opportunities are still there.  Maybe they aren’t the opportunities you want however, and I’ll touch on that as well.

It’s interesting that 18% said new business is harder because developments in technology are impacting offerings.  Certainly there’s evidence of that in programmatic buying moving in-house, for example, but I would actually argue developments in technology are helping agencies drive more new business, for those using the tools and platforms consistently.

And lastly, only 10% of agencies said there was less time in the day to obtain new business.  I was quite surprised by that number, as I would have expected more like 90%. Even those individuals hired specifically to handle new business tend to get pulled into other directions, like account management.

But back to the highest percentage, 69%, saying it’s harder to break through, coupled with the 38% of agencies who feel like there are fewer opportunities out there. The not-so-great news is, it’s harder than ever to break through to prospects.  It’s, quite frankly, a big reason why my company is hired by agencies to drive new business.

The good news is the opportunities are still there.  Absolutely they are. But when you have new business directors at agencies lasting less than 2 years, agencies thinking awards and culture are unique selling propositions, and the majority of agencies believing they differentiate themselves from the competition (when often they don’t), you understand  why agencies get frustrated and feel like it’s even harder to break through.

I propose you take a step back and take stock of your new business process.

While it is difficult to obtain new business, there is also every reason to be optimistic.

Because with a consistent, structured program and the right person or team in place, you can and will close business.

But you also have to understand that new business is a process, and be willing to consider, (consider being the key word), every opportunity that comes through.

Agencies say there are fewer opportunities, but they’re leaving work on the table, for all kinds of reasons.

Some of those reasons are completely valid-I’m not saying you should take literally any work that comes your way, that would be counterproductive, but we consistently see agencies not want to even talk to a prospect because they have preconceived notions about them not being a fit.

Make sure your standards aren’t so rigid that you’re missing out on an opportunity.

And I’ll leave you with this: new business has always been hard, and yet agencies are still obtaining it. You can do it, or you can hire someone to do it.

Stay positive and make a plan.

The RSW/US 60 second agency new business video series, specifically, talking Project Work.

It’s been a hot topic from our 2017 New Year Outlook Report and with multiple agency principals I’ve talked to. Many agencies are embracing this ongoing trend (no, it’s not new) but just as many marketing services firms are still AOR-centric, and that’s something they need to think about.

That’s a stat from our 2016 New Year Outlook Report (released in January), and ideally that percentage held up for your firm this year (or was larger).

These are the kinds of stats that typically put our New Year Report at the top of our most-downloaded new business content.

We just launched the 2017 survey this week, and you can take it here: All Things Agency New Business Survey.

40-of-marketers-expected-project-work-would-increase-in-2016

As always, we greatly appreciate your time (we tried to make it as economical as possible).

And as always, we’ll be releasing the full report at no charge in a few months, with the goal of helping you prepare your new business strategy for 2017.

Here are a few of the topics we’ll be including:

  • Changes in new business opportunities
  • Most effective means of generating new business
  • The dynamics of in-house agencies and procurement departments
  • Benefits of social media and expectations of virtual reality

As in years past, Adweek has provided some provocative questions for inclusion as well.

And taking our New Year survey enters you for a chance to win a $200 American Express gift card.

We’re excited to hear your feedback!

change

Some things never change in agency new business development.  Like the daily “battle”, we fight trying to prove out to marketing agencies that we aren’t just another one of those hundreds of other lead generation firms with fancy names emailing agencies about how they can help them win it all.

We have a number of agency clients that tell us they that they get solicitations from folks daily.  Firms popping up from London (they may sound good, but they don’t get our market), one-off sales guys (with great, but finite rolodexes), companies with the “secret sauce” (no such thing).  Our clients often send them our way so we can stay abreast of anything truly legitimate that enters the market.  So far, I’ve been less than impressed which frankly kind of stinks.

Would be nice if we played in a category where there weren’t so many “used car sales people” selling their lead generation methodologies that work magic.  But as frustrating as it is, it is also a great challenge that we have and will continue to overcome.

Is Truth is in the Performance…or the Results?

RSW/US has enjoyed double digit growth and increasing client tenure since I established the company nearly 11 years ago.  At that time, one of the detractors to the professionalism this business deserves was a company called “Flat Iron” – based in – you guessed it – the Flat Iron building in New York City.   They are no longer in business.

Flat Iron contracted unemployed actors to play the New Business Director role.  These people sounded pretty awesome, but their understanding of agency new business development was about as deep as their stage makeup.  It was performance, in one sense of the word.

So, here’s what doesn’t change:

Truth: It’s in the RESULTS.  Sustained RESULTS.

A great and recent example is this past Monday: four clients called in one day reporting they had won new business from prospects they had met through their respective RSW/US new business programs.

It is awesome that we get several reports each month from clients winning new business on relationships we helped them start.  Four in one day is amazing!

swimming-men-s-4-x-200m

 

Truth in RESULTS.  The success our clients enjoy, and the success we celebrate with them is rooted in our SUBSTANCE – the tenure and experience of our New Business Directors, the way in which we reach out with relevancy, the integrated approach to outreach, and the combined use of inbound and outbound marketing.

The consistent growth RSW/US has achieved is due to our clients’ successes.  And their successes grow out of our legitimate and consistent methodology.

The client who sent me the most recent solicitation he received for Agency New Business Development services observed, “Crowded field…”

It is, and many in the crowd don’t have the tenure, the methodology, the professionalism or the intimate understanding of agency business that RSW/US does.

That may sound boastful, or yes, smug.  But our Truth is in the Results we deliver, time and again – for nearly 11 years!

 

I talked about my recent inclusion in the latest HubSpot agency survey report and the risk of relying on referrals in this post.

There’s some good information on pricing, rates and hiring in the report, and also an interesting section on new business.

And if the key stats from that section (below) represented a new business report card, we’re looking at some barely passing grades.

Your Agency New Business Report Card-You’re Going To Summer School

A few of those stats and some thoughts:

-54% of agencies are “very dissatisfied to neutral” in regards to their positioning.

Not a big shock here and in some ways is healthy.  Agencies should question their positioning on an ongoing basis.

Of course, you don’t want to “fix what ain’t broke,” but those agencies who undergo that new business self-analysis will be ahead of the curve.

But then there are those agencies in the 54% above who are dissatisfied for other, more troubling reasons, for example: too many people involved in the process (so nothing is getting done), unwillingness to seek help when there are internal stalemates or simply not taking the time to do it (see further down for more on this).

-72% of agencies say they’re “very dissatisfied to neutral” in regards to their sales process.

Given how often we’re talking to and helping agencies, also not surprising, but it is a high percentage.

Obviously there are all kinds of reasons why, but the remaining stats I lay out below actually tell the story.

-43% haven’t developed a strong positioning

That’s a good reason to be dissatisfied, but there’s really no excuse.

If almost half of all agencies surveyed simply haven’t developed a strong positioning, they need to look in the mirror and get their collective butts moving.

-44% don’t use a CRM to manage leads

Oh my.  Again, almost half of agencies not utilizing a key piece of the new business process.

Something that is entirely in their hands.

Of course, there can be substantive reasons for this percentage, to be fair, cost and ease of use are potential roadblocks, but for an effective, ongoing new business effort, a CRM has to be one of your tools.

-66% indicated that they do not employ a full-time new business person

And one more nail in the old coffin.

And one more thing, as an agency, you can control.

(I realize this stat is a bit misleading-agencies in the 66% may have a principal or principals handling new business.)

But, my point stands: if you don’t use a CRM, don’t have effective positioning and don’t have a full-time new business person, you will be quite dissatisfied in your sales process-I guarantee it.