In his best-selling book, The New Rules of Marketing and PR, David Meerman Scott exposes the futility of continuing to embrace the old rules of marketing in an online world. The same conclusion can be drawn for agencies who continue to execute their new business prospecting and pitching the way they always have. Marketing has changed. Marketers have changed. Understanding and adapting to these new rules can mean the difference between life and death for your new business efforts. And that can mean the difference in life and death for your agency!
In a previous post, I identified nine new rules for pitching and winning new business. In this series of posts, I will discuss these new rules in more detail. As always, you can do everything right and still not win the business, but I firmly believe that if you adapt your program to embrace these new rules, you will dramatically increase your chances for new business success.
Rule #1 - Project work is the name of the game. Most clients don’t want or feel they need an Agency of Record (AOR) relationship.
A few years ago, agencies tried to make a case for providing all marketing communications services under a single agency roof. Large conglomerates like Omnicom and WPP added media buying services, public relations, direct marketing, research, digital services, etc. but the true benefits for the client were hard to identify and justify. A recent survey by American Association of Advertising Agencies (4-A’s) confirms that unbundling is accelerating across the country. Marketing directors cite several reasons for this trend, ranging from lower costs to specialty expertise to an attempt to keep agencies “on their toes”. Regardless of the reasons, and no matter how much agency heads protest that fragmenting service providers can greatly reduce the singularity of the brand message and personality, the classic AOR relationship is a thing of the past.
There is a proliferation of small consulting firms that are making a comfortable living through one-off projects that help a client set up and use tools like search engine optimization, email, Facebook, MySpace, Twitter, etc. Then they show the client how to run and maintain this on-line portfolio of communication and move on. They don't make a whole lot of money on a particular client assignment, but they have plenty of projects to work on. And without high overhead, this business strategy can be very profitable.
Importantly, they are creating an expectation and setting a precedent that traditional agencies cannot afford to ignore. Agencies must recognize and accept this new rule and identify the type of project your agency can use as an entry point for new clients. A careful evaluation of your prospect's current effort can usually identify a conversation starting point for a project that will grow or enhance their business. After you successfully complete that project, you can use the results and the relationship to garner additional projects. Hopefully, over time, you can build enough trust and relationship equity to warrant special, automatic consideration for new work, even if you never become agency of record.
Rule #2 - In today’s world of fragmented media and extreme audience segmentation, you must own a niche, or even a niche within a niche to differentiate your agency.
For many agencies, their new business focus has been to be seen as experts in a given category – e.g. healthcare, financial services, hospitality, digital marketing, etc. Or they have positioned themselves as having a unique understanding of a particular audience segment – teens, tweens, seniors, working women, etc.
Changing customer dynamics and new technology tools make it difficult for a generalist agency or category specialist to compete today. Understanding hospital customers and marketing strategies does not necessarily mean you know how to market local specialty clinics. And it certainly won't give you an inside track on how to help healthcare insurance providers optimize their marketing communication efforts.
Being a good website designer doesn’t automatically qualify you to be an expert in search engine optimization. And being an SEO expert doesn’t make you an SEM expert.
With the explosion in new media channels and digital marketing tools, clients need to be very precise in developing messaging to build small audience niches. Agencies can differentiate themselves by understanding and adapting their positioning strategy and new business efforts to take advantage of this trend.
Chris Anderson’s insightful book, The Long Tail, was about a new model for business in a world of near limitless choice for consumers. In many ways, that same “long tail” applies to the marketing communications environment. Simply being an expert in a general category or audience segment or media channel isn’t enough. The more specific you can build your expertise, the better story you will have to a client base that is increasingly hesitant to take a chance on an agency that hasn’t already proven its value in their market niche.
As marketers become more focused and precise in segmenting their audiences and media channels, agencies will need to become more targeted to be successful.
Rule #3 - Creative expertise is yesterday’s discriminator. It’s still important, but ROI is the most desirable characteristic today.
The power of a strong creative story in new business can never be discounted or eliminated. Creativity is the most exciting aspect of our business, and a well conceived idea that is presented in a unique and memorable way will always gather praise and admiration from clients.
But the most desirable characteristic an agency can offer to a prospect today is return on investment. Budget-strapped marketers are desperately seeking ways to break through the marketing clutter to reach new customers and sustain the attention of profitable customers through messages delivered at the right place, time and through the right channel. Agencies that demonstrate an understanding and a process for how to analyze and use customer information more effectively will have a much higher success rate than agencies who continue to market themselves as creative experts. Marketing analytics are not the cure-all for marketers’ woes, but they are the next big thing for agency new business prospecting.
The question for many advertisers is not just how to effectively use email, blogs, podcasts, mobile marketing, viral marketing, pay-per-click, user-generated content, Twitter, etc., but how to mix them with traditional media to create the most impact. The concept of “above the line” and “below the line” is no longer valid, if in fact it ever was.
It’s all important. It’s all potentially valuable. And metrics now give us the ability to support a recommendation beyond the traditional "trust us" concept of yesterday. The old saw that "half of my advertising is wasted, I just don't know which half" is no longer accepted by CMO's who know that there is a better way.
Being able (and willing) to apply a sound evaluation of the return on the investment is a great opportunity for an agency to attract new customers. Or build a stronger relationship with your current clients.
Stay tuned for more!
