I've had an interesting Twitter conversation with Bob Sanders aka New Business Hawk this morning on his latest post "How can a small agency compete in new business". It's a good post and I recommend that you read it at http://bit.ly/b6s6tf.
My biggest takeaway from his article is that a small agency shouldn't be discouraged or defensive when pitching against a big agency - take the offensive. As Bob points out in his article, there are several obvious advantages that a small agency has over a larger agency - senior management direct oversight, faster turnaround, more responsive with fewer distractions, and lower overhead costs, to name a few. But there are other advantages that I've found can be capitalized on when selling against a big agency.
1. Look for ways to convince your prospect they will be a bigger fish in your pond. This is similar to the senior management oversight and other issues Bob listed, but can speak in a different way to your prospect. Senior management oversight, etc. is a practical way to address the quality of service a prospective client will get in a smaller agency with less bureaucracy. Being a bigger fish is more of an emotional factor. Every client wants to be important to their agency, so emphasize that importance in every way that you can by showing it during the "courting" process.
Make sure your senior execs are very visible throughout the search process. They need to attend every meeting and phone call, be a prominent part of the email chain, and even initiate contact on a regular basis to demonstrate that they are invested in the prospect. In my experience, the big agencies are saying the same thing, but don't always pay it off in their actions.
2. Build the relationship with the people who will actually service the account. Big agencies are most vulnerable in this area as many have a new business team that the client will seldom (or never) see again after they win the business. While this seems obvious to a smaller agency, I've found that the prospect is often seduced by the glamour and professionalism of the new biz team, only to realize after the fact that they won't be the ones to actually service the day-to-day activities on the account. Get every staff member that will be assigned to the account invested early and often, and merchandise that fact to the prospect. You don't need to trot them all out at the final presentation, but you should look for ways to involve them during the RFP and prep stages to give the prospect greater confidence that your agency will deliver on promises made.
3. Stress your creativity in areas that big agencies don't always pursue because they are below the line. In my experience, the bigger agencies still live in an outdated world that stresses above the line media over other options as the basis for a campaign. They will, most likely, include other integrated campaign elements in their thinking, but still rely on traditional media in some form as the base element(s) of their campaign thinking. This is a great opportunity for a smaller agency to demonstrate their attention and focus on doing what is best for the client, not what is most profitable for the agency.
4. Show the prospect how you can provide more value for lower costs. This may be obvious when discussing overhead costs, but another great way to demonstrate this fact is through production costs. Broadcast production is a great area to demonstrate your focus on saving the client money whenever possible. I've found that creatives and producers at bigger agencies always look at higher cost directors. Smaller agencies can seize on this fact as an opportunity to cast doubt in the prospect's mind. At my last agency, we made a point to emphasize that we look for ways to save the client production dollars by combining broadcast production and print production on the same day at the same site to create better campaign continuity and to lower session fees for actors. We also stressed smaller production crews and our focus on "rising star" directors who were less expensive but would still give us outstanding production value. I've also been impressed with Partners & Napier, an agency that used Six Sigma analysis to find ways to streamline the creative development process and thus save time and money for their clients.
5. Get creative with your financial package. And I don't just mean lower costs. Many big agencies talk a good game regarding incentive-based contracts, but few are able to actually find a way to get their corporate management or holding company to agree to implement. So standard cost-plus is still the basis for most of their contracts. At one agency I managed, we had many different contracts, but the most creative was a contract we negotiated with a long time client for a flat 20% of the advertising budget for agency income, and then used cost-plus for add-on projects that arose during the year. The client paid us a flat monthly fee as income so both sides had good cash flow planning in place. And the client saw all media and production bills at net cost with no mark-up. It worked because we had a great relationship with a client who was fair and honest with us, and because we managed that account very judiciously, our gross margin was north of 30%.
Small agencies have a lot of advantages to tout when facing bigger agencies. The key is to find which advantage can best neutralize your competition and then ride that horse to victory.
