Beating the recession

19-Aug-2010

When times are tough we naturally tend to redouble our efforts. Our fighting spirit comes to the fore. However, it’s important to be aware of how and where to redouble your efforts, otherwise you could be wasting a lot of time and money. Here are a few points to remember: 

Win client ‘commitment’ 

There are going to be some increasingly hard pressed agencies approaching your clients with any number of tempting offers. They will undercut you and promise the earth. Never assume your client relationships are safe! 

The average agency turns over 20-30% of their client base annually. Reducing churn rates can have significant positive effects. So, refocus on your clients. Remember, client ‘satisfaction’ is not enough. Bain management consultants have shown that 65-85% of defectors had answered ‘satisfied’ in a client questionnaire immediately before leaving. You need ‘commitment’. Client commitment is won through delivering more than the project in hand. It’s about proactivity, staying close to your client’s business and issues, outstanding client service and good agency/client communications. 

Mix up your new business activity 

David Ogilvy was once asked why his agency was so successful. He said that when he did everything he could think of to market the agency – public relations, white papers, advertising, building relations with top media owners and managers, original research – to name just a few things, he got ‘lucky’ with new business but he couldn’t pinpoint one tactic that drove the process. On the other hand, he said that when he didn’t do everything more or less constantly and consistently, the new business flow seemed to dry up. 

Don’t put all your eggs in one basket. Vary your new business activity.  Generally speaking, conventional tele-sales activity just isn’t working anymore so don’t get tied into expensive, inflexible monthly deals. Any tele-sales should be used in a highly targeted and selective way where you retain full control. 

Think more carefully about targeting. Where could you go that is off the radar of most competitors? Re-look at your case studies in a business context – what did you really do? What are the insights that are transferable to other markets? What are your insights about the issues clients are most concerned about? Is your website still a glorified brochure or are you using it for proactive new business? Have you got a turgid, uninspiring new business plan or a flexible and constantly evolving plan of attack?

Most agencies are average or poor at new business. To be successful you need to avoid the obvious things that everyone else does and behave differently. 

Untapped potential 

For many agencies, 80% of turnover comes from the top 20% of clients. It follows, then, that there is almost certainly huge untapped potential sitting in your current client list. So, pick up the phone, write a letter, send an e-mail – do it NOW. Our research shows that it is 16 times easier to win business from existing clients.

Also, what about those client contacts from the past? If everyone in the agency made contact with everyone they knew/have known on the client side, you probably wouldn’t need to do any new business.

Be confident about your fees

It’s all too easy to start getting nervous about fees and lower your expectations to secure the project. Clients don’t respect nervousness. They respect confidence and success. When in negotiation stages, remember that any reduction in fees must be accompanied by a change in your proposal. Otherwise, you are not negotiating but just giving away. So never give, always trade. You have other elements to negotiate with, not just price. Think about issues such as payment terms and location of meetings.         

Communicate with your staff

Don’t patronise staff with mere pep talks and morale boosters. They are worried about an uncertain economic climate and general job insecurity. At a time like this, staff need to know your plan of action and vision for the company. They also need to feel part of your plan and clear about their role within it.

Jonathan Kirk


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