Here are some questions that interviewees never, or at least rarely, ask. Not sure why. I expect there are others you can suggest, but here are mine:
1. Is the company profitable? – sure you can get old data from D&B or Companies House in the UK, but this is important. No profits means your prospective agency wonâ€™t be around for long. More importantly, ask where do the profits go? Into the ownerâ€™s gin palace? Paid out as dividends to insurance companies? Back in the business?
2. Can you give me revenues for the last five years? – if the company is shrinking or has missed a few yearsâ€™ growth, what does that say about your future role?
3. What is your staff churn rate? – prospects ask, but interviewees donâ€™t tend to, even though theyâ€™re more directly affected. If itâ€™s 33% – youâ€™ll only last 3 years on average.
4. How does staff churn vary by level? – this is a better question. Junior staff will have a higher churn rate since they are learning and many will fail to hit the grade. But if thereâ€™s senior churn, thatâ€™s less good. Better still, ask what the churn rate is for the position you are applying for â€“ if itâ€™s high, perhaps the job is unsustainable?
5. What is your client churn rate? – you want to know the agency can hang on to the wonderful-sounding clients theyâ€™re offering you.
6. What is your pitch to win ratio? – when clients go, you want to know that your new agency can win new ones. If theyâ€™re winning less than 1 in 3, the new business process is broken â€“ theyâ€™re either pitching the wrong clients or the proposition isnâ€™t right.
7. Who beats you in new business pitches and why? – you should get a straight answer to this. If they donâ€™t know, theyâ€™re not doing their market homework. If they spin you excuses, theyâ€™re in denial. All agencies get beat out sometimes, the main thing is to work out why.
8. Whatâ€™s your average account size? – this really just tells you whether youâ€™ll be working on several smaller campaigns or one large one. There are pros and cons to each. Some people are more suited to fast-paced, agile start-up campaigns, others to complex multi-dimensional blue-chips. Decide which is for you and make sure it matches the agencyâ€™s client base.
9. What percent of your revenues does your largest client account for? – this shows you how dependent the agency is on its flagship client. If itâ€™s more than 10-15%, that could mean trouble if that company moves to another firm, gets acquired or has budget cutbacks. For some agencies, itâ€™s literally in the 60-70% range. Your job security there will be directly related to that clientâ€™s retention, whether you work on it or not.
10. What is the equity structure of the company? – you want to know who you are ultimately working for, and also find out if they are responsible long-term owners or short termist. This will also give you an insight as to whether you can get equity down the line.
Iâ€™m not advocating that all interviewees ask all these questions at the first round. Of course, you need to decide which are most important to you, and you may find that you can get answers from other sources. But asked in the right way, these will help you decide whether the agency is commercially strong and a good fit for you. Itâ€™ll also help you come across as understanding the dynamics of how agencies work, which is no bad thing either.