With thousands of companies to choose from, and so little time to choose them, your agency needs to define who qualifies to be a prospect or client. Not every company does. Each agency does things a little differently and has different strengths, so agency principals should set parameters for new prospects and clients by identifying those agency strengths, and developing new business strategies to maximize success.
Build a basic client criteria form, and submit each new prospect to its scrutiny. Or, if you want to be highly proactive, take a much larger list of prospects (every company within a 100-mile radius of your agency) and run the criteria against each company. That way you will develop an instant list of "A" prospects really worth pursuing.
Here are some of the things you need to consider.
- What Is the Client's Ability to Pay the Agency? Whatever you do, make absolutely sure the prospect is able to pay. Many companies have grand plans, solid products, and competent personnel, but remain financially weak. Some of your prospects aren't even calling the financial shots. While they may be willing to pay your bills, their parent company may not. Or worse, and we've seen this a few times, your client is profitable and your work for them is successful, but the parent siphons off the cash. Or run credit checks, check with suppliers, use a business credit service like D&B or Experian.
- How's Your Knowledge of Their Business? It's hard to contribute if you don't have some sense of what the client does and how they sell. This does not mean you can't learn, or that many businesses don't operate similarly on a manufacturing to distribution to retail path, but it certainly gives you a leg up if you know something about what is going on in a prospect's industry. However, pitching only where you know the industry tends to limit your number of prospects. In how many industries can your agency be proficient? Most of you know we have reservations about vertical marketing. If you're heavily focused in the automotive industry, and the industry goes down the toilet, you're screwed.
You can overcome this and be proficient in many industries through gathering good research. Since many businesses market in similar ways, your agency's general knowledge of the marketing process, combined with your willingness to seek out specific information about the client, the industry, the buyer, the media, the distribution process, etc., will give you the power to successfully service an account.
- What Kind of Work Does the Client Want from the Agency? It's far better to work with a client who appreciates, desires, and even demands a first-class creative product than with someone who does not, even though the money is the same. Look for clients who will give you the opportunity to prove yourself, enabling you to stretch and grow. Just as important, it's a new business advantage to do good work for a client. Your portfolio pieces should be your best work, regardless of how you were paid. Not the mediocre projects where you were paid on time. Good work begets more good work. As a new client criterion, look carefully at work done by the prospect's last agency, ask them how they feel about it, and use the answers to gauge the prospect's creative sensibilities.
- How Important Is Advertising to the Client's Business? If you think we're going to say look for potential clients where advertising is paramount to the success of the business, then think again. Not that you can't do a good job for some of those clients as well, but in our experience, when there are plenty of visible ad dollars floating around, the big agencies are incessantly after the account. Better to do business with a "neat" account where advertising is third or fourth on their list of important daily tasks. These clients place manufacturing or sales first. Your job is to become indispensable to the selling effort, and in doing that make your agency hard to replace. It's the agency principal's job to make strategic decisions on what potential accounts will best serve your purposes.
- Does the Client Understand How Advertising Agencies Work, or Do You Have to Train Them? Always evaluate a new prospect's understanding of how agencies function. If your prospect doesn't get it, then you should not be the ones to supply the training. The training company never makes any money on the account.
- How Many Decision-makers Are There, and At What Level Are You Working? Do you know what a camel is? It's a horse built by a committee. Generally speaking, the more client people involved in decision-making, the less impact the work will have. Look for accounts where you can deal with one decision maker, or at least with someone who has enough power to fight for your work with the powers that be. Working with low-level employees is a frustrating experience.
- Will They Overwhelm You? We find individual accounts that constitute more than 30 percent of an agency's gross income truly frightening. To lose an account of that size is very detrimental to an agency. If you commit to an account, body and soul, and they leave for one reason or another, your agency is at risk until you can replace that business. Let us tell you, 30 percent AGI accounts are not that easy to replace. Look instead for accounts that will not exceed, at the most, 20 percent of your AGI; 15 percent would be ideal. It is a lot less traumatic to lose a 10 percent AGI client than a 30 percent AGI client. It's a real dilemma. If you are fortunate enough to land a big account, what do you do? Turn it down? THE ANSWER TO THAT IS NO. Never turn down good business. If the prospect meets most of the other criteria, take the account. Our only advice is that you begin immediately to lessen the impact of this new "gorilla" account on your gross income. Use the acquisition of a large new account to ratchet your agency up to another level. The leverage you gain by having a big account will help you obtain other smaller accounts to lessen the AGI impact the big one has on the agency.
- Into What Category Do You Fit in Their Scheme of Things: Pure Vendor or Partner? A sage old agency owner used to say there was "no life after collateral." He meant that once an account positioned you as a collateral vendor, it was very difficult to advance to the strategic marketing partner level. Today, that applies equally to agencies doing project or executional work that are struggling to move to full-service and strategic marketing models. Most of you know our position: we don't want you to be pure vendors to any accounts. We want you to be respected marketing partners, or at least, if you do project work for clients, we want you to do the kind of intelligent project work that might lead you to be thought of as "the second best agency the client knows." Their present agency is the best, naturally; but if anything ever happens to that relationship, you will be next in line. Pure vendors don't have this unique position; they are only as good as the last project or the last quote. Look carefully at this criterion each time you make a new business call.
- Do You Have Chemistry with the Client? Face it: you do business with people you like. It's that simple. If, upon meeting a prospect, you feel a sense of wellbeing, chances are they are feeling the same thing. Trust your instincts in this, and make your decisions based on what you feel.
- Are You Located Nearby? Remote work and digital collaboration tools have made long-distance client relationships more common and more manageable than they once were. But proximity still matters. In the smaller business universe, face time counts. All things being equal, it is better to be located down the block, or only a short drive away. When you're down the street, you can have daily contact, a "be right there for an emergency meeting" attitude. This proximity saves you and the client money and allows you to make more profit. You can spend more time nurturing local accounts, squeezing more work out of the budget or from other contacts you can make within the company. If your agency has a vertical or industry-specific focus, you may have to take clients all over the country, but client/agency proximity remains a meaningful new business criterion.
Determine if you have an "A" prospect by taking our ten points listed, or your own criteria, and using 100 as an index, score your agency above or below on each point. For example, if you are located just down the street from a prospect, score yourself at 125 for that point; but if that same prospect did not pay their bills on time, score them 75 for the payment category. After you have scored each one, add all the numbers and divide by ten, or by however many criteria points you have decided to use. The total will be the index number rating of each prospect.
Doing this frequently will give you a sense for which prospects you should focus on, and which ones will be less satisfactory as agency clients. Don't kid yourself; not everyone should be an agency client. Most agencies are not very aggressive about prospecting for new business, so when a prospect, any prospect, turns up, agencies may feel obligated to take the business. You should be selective. It is far better for you to pass on a prospective client that is not going to work out than to waste a lot of time and non-billable energy before both you and the client decide to divorce.
