New business in a boom

Here’s an article in this week’s PRWEEK about new business. My wise counsel is included and distilled into one sentence (in bold right at the bottom – look hard), but still good to speak to Christie who I had not met before.

PR TECHNIQUE New Business: Agency guide to pitching and choosing
Written by Christie Casalino
Published on January 10 2005

Developing new business is no longer a question of scrambling around for opportunities; it’s now about making sure you pursue the right ones.

The past few years of economic downturn have left many firms repeating
the mantra "any business is good business." However, the recently
improved economy, along with the accompanying rise in prospective
clients, has left agencies somewhat out of practice when discerning
which business options are worth the money, time, and effort it takes
to pitch.


Rigid guidelines, such as number of employees or annual sales, remain
useful tools, but agencies now have to scratch beyond the company’s
surface to ensure a good match.


"I think that when times are tougher, you might stretch the rules a
little more," says Margaret Booth, president of M Booth &
Associates. "When we go after a client now, we look to attract
companies where we can become a partner and grow organically. We like
to work with big companies where we’ll take an assignment of any size
and hope to eventually grow that business from within."


When selecting any new-business opportunities, Shawn Whalen, SVP at
technology-focused firm Schwartz Communications, suggests looking for
marketing-driven organizations to discover which companies will let PR
impact the bottom line.


"Look at the composition of the management team," says Whalen. "If the
CEO and other top-level executives have an engineering background, a
lot of times they tend to be more fixated on the technology, rather
than realizing that marketing will be key. The technology will not sell
itself."


"I think we all went through years of being burned," says Jon Bailey,
president of San Diego-based Bailey Gardiner. "Now I’m much more
interested in working with people that are more respectful of us as
professionals and look to our resources as credible and very real parts
of their management process and executive team. I don’t care to just be
a vendor providing services to a marketing department. I’m not
interested in working with clients that measure our success based on
column inches or number of clips – it’s a sophistication level that I’m
looking for."


And that sophistication does not have to be directly proportional to
the client’s profit margin. "I’m willing to take clients that are not
the most lucrative," says Bailey, "if I feel that they ‘get it’ and
that we can help them get where they want to go."


A prospect’s history with firms can also be a telling clue to the future of a relationship.


"When we’re working with a company that’s worked with agencies in the
past, they know that there are many different avenues and aspects of
PR," says Vince McMorrow, PR director at RMD Advertising.


"It allows us to work with smart groups and to be profitable quickly."


In order to help employees across the board determine which pieces of
business are worth a pitch, Euro RSCG Magnet has created a "new
business guidelines" document.


"People at an agency should know what makes a strategically important
client for them versus a relatively unimportant client – and it’s not
always entirely clear," says president Paul Jensen. "For most
organizations, a dollar of revenue equals a dollar of revenue, and they
don’t pay attention to making sure their teams really understand what
makes the most valuable clients."


"Pitching a piece of business today is a lot more work than it was four
or five years ago because there are more players and the clients have
become very focused on RFIs and RFPs," he continues.


And the RFP itself can send up a red flag during a company appraisal.
"When the RFP would have taken between $30,000 and $50,000 and the
potential clients begin looking at between 12 to 30 firms, it becomes a
cattle call," says Booth. "We just won’t do that anymore because that
says to us that the client really does not know what it wants."


According to Michael DeMent, principal at DeMent O’Flaherty &
Collier Communications, his agency only pursues RFPs when it thinks it
can offer a noticeably different approach than its competitors.


"Without clear-cut differences, especially against larger competition,
the ‘not wrong’ choice for a prospect is still to hire the larger
agency," notes DeMent.


One noticeable by-product of the increase in potential clients is the
ability of agencies to ask the questions they may have skirted before.


"I think that I’m a lot smarter about the economics of the deal," says
Bailey. "I ask harder questions of my clients about budgets and
willingness to pay. I’ve gotten more direct in talking about the
compensation and the dollars than I used to. Before, we were just happy
to get the business."

In addition to asking financial questions, research into a company’s
history is essential to deciding where it’s headed in the future – and
that rings especially true during times of economic prosperity.

"In a boom time, it gets harder to qualify companies because
everybody’s growing, everyone’s winning new customers and launching new
products," says Morgan McLintic, VP at Lewis PR. "It gets harder to
pick the ones that are really going to emerge"

Being sure about the company’s future is essential to decision-making.
"The problem when you work with a company that you are unsure about is
that not only will you not put your heart into it, but your client is
not going to give it their all because they have the same fears you do.
Thus, you’re doomed to failure," says Todd Defren, principal at Shift
Communications.


But while firms may be calling the shots at this moment, they still
need to avoid burning any bridges with potential clients for the future.


"In the late ’90s, there was an arrogance on the part of a lot of
agencies," says Marianne O’Connor, founder and president of Sterling
Communications. "Now we don’t expect clients to compete for our
business – we just try to find the best fit."

———
Technique tips

Do diligent research on a potential client’s business, both current and historic
Do ask specific questions concerning financial aspects of the account
Do look for a strong cultural fit between client and agency

Don’t pitch if the client’s expectations are not aligned with your capabilities
Don’t put too many resources into a client who’s asking for extensive
RFP submissions from more than a dozen firms, unless the budget is
suitably large
Don’t neglect to decline a pitch process gracefully; your paths may cross again

  • Nothing worse than hitching your wagon to a dying horse. In some ways we should regard our examination of new prospects the way VCs do – dig around a in the guts to discover odds of long-term viability. It’s not always easy to get an accurate read – particularly with private companies, but it’s worth exploring.
    -Todd

  • Agreed – due diligence is important for both parties if the relationship is to endure. My recent conversations with VCs have all highlighted the importance of a proven management team. That’s something that you can research and ascertain from the selection process, even for private companies. Personally, I think you can sense a good company from the moment you walk in the door. Even the reception area tells you a lot about the way the business is run, attention to detail, and the importance of marketing.