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There are no two words that have more power, mystique or anxiety associated with them in the communications business. They are perceived as the lifeblood of advertising agencies, design studios, production houses, public relations firms – you name it.
In reality, new business isn’t the only way companies grow —but it is the most high-profile way to do so. That’s why the glamour position in the agency food chain is the hunter/gatherer, and not the anonymous schlub who keeps the home fires burning.
Indeed, that’s part of the paradox connected to the importance new business commands.
The invitation to pitch new business frequently goes to a shop that gets the attention of the trade press, agency search consultants and agency peers for its ability to get new business—or at least get into the really cool reviews. But to get that recognition, an agency must establish itself by winning major account pitches. It’s a little like trying to get into a locked room where someone is waiting to give you the key.
It is, all in one sweep, unfair and maddening and frustrating and necessary. Agency principals swear by new business. Some swear at it.
Survey those same agency heads—or their chief financial officers—and they’ll almost always point to retaining and growing existing clients as the way they keep their doors open and their balance sheets squarely in the black. It’s easier to keep someone in love with you than to stay constantly on the make.
Love the One You’re With.
"Retention is king, “ said Patty Knap Tucker, Executive Vice President of The Headline Group, a public relations firm. “ [Our] first two clients are still with us 19 years later, and the majority of our clients have been with us between three and nine years. This fact alone means a steady stream of new clients knock on our doors month after month. Right through recessions and right through booms.”
“ Client retention is far more important [than new business],” said Chris Hall, President and Chief Executive Officer with BBDO South in Atlanta. “ But you have to stay engaged in new business to fuel growth, attract and keep good people and stay fresh.”
“ Client retention is absolutely essential to sustaining the health of any agency,” said Dave Fitzgerald, President and Chief Executive Officer of Fitzgerald+CO. In fact, the agency retains an outside company specifically to monitor client satisfaction.
Tenacity Inc. conducts “ Fresh Eyes Review” to solicit feedback from the shop’s client companies. During these reviews, clients are asked to discuss the expectations that they have of the agency and how well it’s delivering on those expectations. The work of their people, the services they offer and the value they deliver are all scrutinized.
The end result is the beginning of dialogue—unarticulated problems or issues that can impact the agency/client relationship are aired and addressed.
Tucker, Hall, and Fitzgerald are all true believers in the value of client retention. Taken to a logical conclusion, their assertions inspire an interesting analogy: Client retention is a little like the faithful, dependable spouse that keeps life running smoothly.
If that’s so, then new business is surely the trophy wife of the agency world.
Because the fact is, the advertising trade press cares not at all about faithful, dependable relationships —or about the nurturing of a firm’s existing clients. Long-term relationships that grow progressively more profitable may make the chief financial officer happy, but Ad Age and the Wall Street Journal lust to write salacious headlines touting accounts won, lost, or in review.
For example, in September of this year, Atlanta-based BellSouth placed its $100+ million advertising account into review. All the major advertising media outlets covered the news. None of them had (or have) ever run a story on the longevity of BellSouth’s relationship with WestWayne (only one of BellSouth’s agency partners) with the same fervor. But no one has ever said that life was fair. Especially life in advertising.
The Chase
How companies pursue new business is as varied as the disciplines they represent, but the process is always directly tied to the size of the company and its resources.
To wit: it’s easy for an agency billing well over $100 million to have one person who does nothing but search out prospects, maintain communication with those prospects and field inquiries from agency search consultants or potential clients themselves. In this group would be shops like Fitzgerald+CO and BBDO South, both with billings topping the $100 million mark.
“ [New business] is too important a function to do it part-time or as part of another job,” says Dave Fitzgerald.
For smaller companies, however, the role of rainmaker is usually positioned as someone’s other job. Often it’s a 50-50 split between taking care of existing business/agency administration and chasing new business. It can be a difficult balancing act, but it can also offer some unexpected dividends.
“ We feel it is better to have the entire agency work on new business instead of bringing in a hired gun with a lot of razzle dazzle,” said Alex Van Winkle, President of Van Winkle & Associates. “ As a medium-sized agency with a history of long-term client retention, it’s important to show prospects exactly what they are going to get when they partner with us. Many clients enjoy the fact that an agency principal actually works on their account.”
“ As the owner and chief executive officer of the agency, I have a vested interest in the success of our program, so I work at it virtually every single day,” said Jamie Turner, founder of Turner Fernandez Turner. “ We used to have [a full time new business person], but there’s nobody who can sell an ad agency like its owner. So we got rid of that position.”
There are exceptions. Lucid Partners, a design firm headquartered north of Atlanta, has committed one person to bulldogging future clients.
“ We made the decision not to rely on internal growth and to broaden and diversify our client base,” said Lucid President Zia Kahn. “ This requires constant and dedicated business development.”
What most agencies keep on hand is the agency book, a publication that offers items like biographies of the shop’s principals, list of clients, case histories, samples of creative, statement of agency philosophies and other information they hope will be attractive to prospects.
Beyond that, many agencies also have what outsiders call the “ agency box.” This box can be assembled at a moment’s notice with the agency book, a creative reel or a CD-ROM with examples of the shop’s creative product.
And while this magic book or box has a lot of names, it is, essentially, a direct-mail piece.
“We have a ‘MATCH book’ we send out that covers our philosophy and gives an idea of who we are in personality as well as specific account experience and bio information,” said B.A. Albert, Co-Founder of Match Inc. “ Our feeling is that each pitch is different, each client has their own set of rules and needs, and we have to learn that up front. We also make sure early on that if we are not a good fit we don't waste each other's time. If they don't like laughter and dogs, they are not for us.”
The pursuit —and process—of new business has created a whole industry related to the advertising business: agency search consultants. The majority of the time, these consultants are employed and paid by the client to oversee the review process – from inception to the selection of an agency.
It is the job of consultants to know the agency landscape, the better to match the right firm with the right client. Their methods vary. Some keep exhaustive databases of agencies, drawing on reports from the trade media. Others pull in information from the media and from the agencies themselves. At least one search consultant claims to start from scratch every time out, saying he doesn’t keep standing files on shops, or stockpile their reels.
However search consultants prepare themselves, hitting their radar has become a major part of the new business game for agencies.
“ We’re currently using a series of 17 different postcards going to a list of over 300 potential clients and consultants,” said Patrick Scullin, a Partner in Ames Scullin O’Haire. “ While we don’t expect clients to change agencies on the basis of a postcard, the intent is to give them a sense of who we are and what we do so that when and if they go into an agency review, we’re in the consideration set.”
“ We have a formal brochure we send out to prospective clients,” said Eric Hyman, Senior Vice President and Director of Business Development for DWP/Bates Technology. “ We typically send that out only after we've made contact and there is an interest in receiving it. It is a comprehensive piece and a bit expensive so we don't send them out to just anyone for cost control reasons.”
When search consultants act as the gatekeepers to major pieces of business, however, the reviews on their role are mixed.
“ Agency search consultants are an excellent resource for new business,” said Bob Kadrie, President of Point of Vision Design Group. “ It’s like having an intelligence operation. The best agency search folks know who’s doing what out there at any given time. That kind of insight is extremely valuable.”
“ I don’t think of search consultants as the wall, but I do think they need to do their homework and not rely on old standbys,” said Scott Marticke, Managing Director and Partner of Titan Advertising Group. “ That’s the danger in the [agency search] industry. Since many consultants are limited in their personnel, its sometimes difficult for them to keep their finger on the pulse of the business, and they often miss opportunities.”
“ Good consultants benefit both the agency and the client,” BBDO’s Hall said. “ Bad consultants do nothing but get in the way, preventing the agency and client from understanding what the working relationship would be like.”
In the end, there is an addictive quality to the process. Just as some doctors are content to make you turn your head and cough, others thrive in the trauma center. The thrill of the chase is something that can get into your system and never really come out.
“ It is very hard and frustrating,” said DWP’s Hyman. “ Yet once you get into it, working on an account day to day can seem boring. Winning can be so satisfying. As long as you can happily handle rejection and remain positive and upbeat, it is a great place to be in an agency.”
While new business may get a disproportionate share of attention, the heat it generates becomes the modern-day siren song of the communications discipline.
“ I’m not sure we have any big silver bullets, but whatever we are doing is working, so we’re going to continue doing it,” said Match’s Albert.