Expedia And Sales Chutzpah

A Lesson From Expedia On Sales Chutzpah

Screen Shot 2017-05-20 at 5.02.30 PMOK, we all have bad customer service experiences. I get it. But when the bad experiences go across four Expedia service phone conversations (that lasted about three plus hours over two days) and another six back and forth Twitter direct tweets and the customer who is spending over $5,000 on the trip is still unsatisfied (that’s me), there must be something wrong with how Expedia runs the humanbeing (vs. digital) sales service side of its business.

No, This Post Is Not About Expedia. It Is About Your Ad, PR, Digital, etc. Agency

Stick with me because this blog post is actually about a way to grow your agency – a way that requires a bit of chutzpah. However, before I get to your agency and an unignorable sales tactic, I have to share a tiny bit of customer service related background to set up the chutzpah recommendation.

A few weeks ago, I used Expedia to book two tickets from Mexico City to Budapest for a summer trip to see the Hungarian F1 Grand Prix race. This week, I called Expedia to change the trip by adding a few days up front and move the original first destination from Budapest to Vienna. I knew about and was willing to spend the extra $500 flight change charge and, before I called, I had also looked at all of the available flight options. I was prepared for the service rep call. But, I was not prepared for the following:

Expedia’s phone system could never recognize my itinerary number or phone number (the ones that are listed on Expedia’s original flight plan document). I knew I was in the system because when I finally got to a rep, she recognized the numbers. What’s up with Expedia’s automated phone system and the interface with its database?

While it took me about 30 seconds to get to the Iberia Airlines and Expedia sites to find my reservation detail, it took the multiple Expedia reps I talked to at around two minutes.

I was repeatedly asked if Mexico City was my origination airport (I live in Mexico) and if I was to change flights in Madrid as stated on my reservation. Um, yes.

The reps took forever to find alternative flights although I was helping them find the alternatives. And on. I won’t bore you with more including the third rep who apologized for how sloooooow Expedia’s computer was working.

Taken individually, these don’t appear to be too onerous. However, in aggregate, they were and I gave up without making the flight change.

OK, two more points.

I was so pissed off that I sent LinkedIn InMails to three Expedia marketing execs gently complaining about the service and asking them if they ever sat in on customer calls – consider this action an internal “Store-Check”. It’s been four days since I sent the emails. Any response? No. Sure these folks get lots of emails. But, I used attention-getting customer-centric subject lines.

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The Cost Of Ad Agency Business Development

Ad Agency Business Development. What Does It Actually Cost?Screen Shot 2017-05-13 at 9.53.38 AM

Simple answer? Ad agency business development costs… a lot. A more detailed answer follows.

I recently spoke about ad agency business development (essentially the art of Account Based Marketing) at Hanapin Marketing’s PPC Hero conference in L.A. and did a day long ‘how to pitch’ workshop for a major agency network at their annual meeting in Miami. I came away from both sessions thinking about the high cost of business development.

The True Cost Of Business Development

Since there is no one size fits all answer to what BD costs, I am going to illustrate the cost for a typical medium sized agency. Based on many conversations with agency leadership and the research done for my book on pitching (see the top of this page or just go here to buy it), the cost of participating in a serious pitch can cost close to $100,000. Sounds high, right? But, here is my math.

I am making the assumption that a typical medium size agency responds to 10 RFP’s and participates in 6 serious pitches per year. Of course, your mileage may vary.

RFP’s cost $15,000 to write and produce. This includes both hard and soft costs as in labor and overhead. At 10 RFP’s per year, that’s $150,000.

Pitches are more expensive.  Lets go with $35,000 per pitch. If you are an active agency, you’ll do 6 per year at a total cost of $210,000. FYI, I’ve run pitches at Saatchi & Saatchi that cost over $100,000. Not at all happy about that but that is a fact at the huge agencies pitching for huge pieces of business.

OK, back to the mid-size agency. The annual agency cost for RFP’s and pitching is $360,000.

But, there is more and I am going to be very conservative here. I am going with $200,00 per year for the cost of an active business development program itself. That’s the hard costs and the cost of a BD director and significant management time.

The total… $360,000 plus $200,000 = $560,000 or $56,000 per RFP and $93,333 per pitch.

Ouch.

Business Development – A Cost Center Or Opportunity?

The big question at many client companies is whether or not marketing is a cost or a business opportunity. Of course, you tell your clients that it is an opportunity that pays for itself. No marketing, no sales. Well, this is the case at many agencies. They simply do not spend the effort (as in time, investment and planning – oh, and execution) to run smart aggressive business development programs. As both an ex-Saatchi guy and small Oregon agency owner, I am blown away by this.

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How Do Clients Choose An Advertising Agency?

How Do Clients Choose An Advertising Agency?

choiceAh, let me count the ways clients decide which advertising agency to contact when they need to dial up their marketing. But, let’s just keep this blog post real simple. They choose them based on what they do.

The “Data” Agency.

I am going to Miami next week to do an all-day workshop on business development pitching (plus agency sales in general and negotiating) for a large data marketing firm. While prepping for a discussion on how to sound unique, I took a look at how many of the top data oriented agencies talk about themselves. So, just to demonstrate what I call sameness vs. distinction, I offer their descriptions. These come from their websites. I’ve kept their names off to protect the innocent.

Note: I know that it is very difficult to find the words that deliver distinction when you need to start with a very clear definition of what you do. However, I think the following, at least, demonstrates that an advertising agency has to think hard about their words.

But, you know this. Therefore, this is just food for thought. I suggest that you take a hard look at your own descriptive words vs. your direct competitors. Since most clients are making a high percentage of their decisions about your agency before they ever call you (an understatement), this is a rather smart analysis that I recommend you do every six months given the speed of change.

The Agencies…

ABC. Make lifetime connections with the industry’s most advanced data-driven marketing.

DEF is a premier digital data analytics firm that works with the world’s leading brands to create, implement and action advanced analytics. 

GHI. We use data, technology, intuition and creativity to connect people to brands in a meaningful way.

JKL. We’re a data-driven marketing agency. We build individual relationships at scale using sophisticated data platforms and the same technologies that are disrupting the media environment.

MNO is a technology and services company that provides the data foundation for the world’s best marketers.

PQR is a global data-driven, technology-enabled performance-marketing agency.

STU is the leading global information services company, providing data and analytical tools to clients around the world.

Write Your Advertising Book

Write Your Advertising Agency Book

I’ve written and presented at conferences about writing an advertising agency book. It could be a book book, a digital book or even a zine. Just write it and benefit.

The benefits? People will buy it. You will look like an expert. You could make a few bucks. You will get more incoming leads. Actually, it should be about getting more leads.

The Levitan Pitch — My Sales

The sales of my book The Levitan Pitch. Buy This Book. Win More Pitches. (look at the top of this page) are still growing. And, I keep getting leads from people that read it. This is all good. While not a goal, I even make some bucks (for me and Jeff Bezos). See a decent the two month period below. Hey, book sales are buying me my trip to this summer’s Hungarian Grand Prix (that’s Formula 1 for you NASCAR fans.)

 

My Two-Month Amazon Book Sales

How Digital Agencies Win Clients

How Digital Agencies Find (and Keep) Clients

Screen Shot 2017-04-04 at 8.56.39 AMI was interviewed for the DM News article, “How Digital Agencies Find (and Keep) Clients”. Were my comments brilliant? Well, brilliant might be a stretch. But here are my key points.

Referrals – The Default Business Development Tool

Where do clients come from?

“The traditional rules of marketing have not changed,” says Peter Levitan, former agency executive and owner, now a self-employed strategist. “The primary way, the default, is referrals.” Levitan says. “Who doesn’t like referrals?”

So why is it that word of mouth is the way agencies get business? “They do not have an active business development program,” Levitan says. About 60% of all agencies have no business development plan. “That is the problem of being in a low-margin industry….finding the manpower to run  business development when you spend 10 hours a day taking care of the client.”

Takeaway. I love referrals and have a master plan for how to actually manage a referral program, Too many agencies are passive about getting referrals from friends, family and current and past clients. Hey, ask people to refer you. Have a plan.

However, the issue with referrals is that mot agencies rely on them to get new business because they do not have a proactive 24/7 business development plan. Referrals become the default new business tool.

The Power of Insights

“I suggest providing an insight the client does not have,” Levitan says. Google Survey is a good place to start looking for those insights, he noted. Finding that insight “will get you new business,” he says.

Levitan gave one example from personal experience. While trying to get a non-profit to sign on, he pitched this insight: the public perceived the organization as one of the five most well known, but least in need of donations.

Pitching the crucial insight harkens back to the Mad Men era of advertising in the 1960s, when ad agencies pitched on the basis of the “one big idea”. Levitan explains that today, “ad tech rules. The Mad Men days of the big idea have been pushed to the back burner.” Digital firms lead with technology, but “forget they are dealing with humans.” he added.

Actually, the non-profit story is about an agency that hired me to help them win more new business. I’ve helped them achieve their goal. One piece of advice I gave them was to lead every pitch with a very compelling insight. I bet that sounds easy. It isn’t. It can’t be just any insight. It has to be an insight that the client never thought of.  But, you know that.

A great insight tool is Google Consumer Surveys. Try it out.

Or, just go to my Let’s Talk page and I’ll help you out.