Smarter Advertising Agency Business Development

How To Build A Better, Smarter Advertising Agency Business Development Program
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WARNING: This is a long blog post about how to build a better, smarter advertising agency. Actually, this is Part One of an even longer post. It is a looong post for a couple of reasons.

  1. This is a transcript of a 40-minute interview on advertising agency business development that I did with the super savvy Drew McLellen and his must / should listen to advertising podcast, “Build A Better Agency“.
  2. Google loves loong blog posts. So, having an interview transcribed into text is a very good SEO tactic. I’ve done this before with some of the interviews I did for my book on pitching. Having text allows me (us) to have an audio and text for a blog post which can then be marketed across social media sites like LinkedIn, Facebook, and Twitter. It is a very smart idea to extend the reach of any thought leadership you do. So easy too.
  3. Some people would rather read an interview than listen to it so here it is.
  4. I want to use Drew as an example of how to do and market a podcast. To date, he has done 49 interview podcasts. Podcasting provides 4 basic but sweet benefits. 1) It is a great way to look and sound like an expert by interviewing other experts; 2) podcasts are relatively easy to do; 3) interviewing people helps you make friends (imagine having an agency podcast in your agency’s specialized category where you interview potential clients); 4) it is all about marketing yourself or your company.

Here is a link to some other smart marketing podcasts.

Build A Better Agency

Drew:         Hey everybody, thanks for checking out this episode of Build A Better Agency. Drew McLellan here, and I am really excited about the topic today. This is a topic that I love to talk about. Agency owners are obsessed in talking about and our guest today is a huge expert in the area of new business and pitching and positioning your agencies. We’re going to dig into all of that. Build a Better Agency is all about helping agency owners just like you do it a little bit better so you can make a little more and worry a little less. With that, I want to introduce today’s guest, Peter Levitan.

Peter is a builder of successful brands, digital technologies, publishing and advertising environments and highly effective marketing programs for Fortune 500 clients, ad agencies, tech companies and publishers. He spent 16 years at Saatchi and Saatchi Advertising running their business development and some major accounts. He owned his own agency in Portland and was CEO founder of two Internet startups. Many of you are familiar with The Levitan Pitch: Buy this Book. Win More Pitches, which it was a great read. We’re going to really dig into Peter’s expertise around how agencies can grow their business. Peter, welcome to the podcast.

Peter:         Well thank you very much. Thanks for the introduction. One thing you didn’t say was that I did all that in two years.

Drew:         And you’re only 29 right?

Peter:         I’m actually 26, thank you.

Drew:         Sorry, didn’t mean to overshoot. Have you always been in the agency business for the most part? Is that the lion share of your professional career?

Peter:         Well it’s an interesting question. I was thinking the other day, what is the string? What ties my having left college to get to where I am today and I realized that, to a certain extent, I could call it creative selling. I started as a photographer in San Francisco, I had a commercial photography studio, then I moved back to New York City where I grew up and went into advertising, then I founded two internet companies and then my own advertising agency. Today I help agencies develop better, smarter business development programs.

Across that entire lifespan, I realized that I have been selling. Whether I’m selling my photography to agencies. Selling advertising agency services to clients. Or today, selling my consulting practice to agencies, it’s all about selling. I think I just really come down to the conclusion that I know how to sell stuff.

Drew:         Well, and when you think about it, isn’t that what agency’s job are too? Is to help clients sell their stuff? It makes sense that you’ve hung out in that space for as long as you have then.

Peter:         Right, it certainly helps.

Drew:         I know one of the things that a lot of our listeners are thinking is, “Er, Saatchi and Saatchi and he did big brand, big new business.” Help them understand maybe a little bit about your own agency after you left Saatchi and just how some of this translates. Everything we’re going to talk about today … You know, if I’m a ten person agency in a second tier or third tier city, how do I scale this stuff down?

What Is Your Agency’s Sales Goal Line?

download-salesPeter:         It’s really all about fundamentals. As I say that word, I’m thinking about the start of the NFL football season. To a certain extent, while the NFL is different from high school football, essentially, they’re trying to get the ball from the line of scrimmage to the goal. To a certain extent, that’s all that agencies do and it’s consistent whether you’re a thousand person agency or a ten person agency.

What it comes down to is understanding what your goal line is, understanding what your objectives are and I don’t think, frankly, that that’s any different in my conversations with major agencies down to small shops.

Two, three, ten people. It’s really understanding what the objective is and then focusing on it. I think that that’s, in particular, critical for small agencies that are time stressed, management is stressed. It’s really all about focusing and understanding what the objectives are and being realistic.

Drew:         Yeah, if anything, smaller agencies are trying to do the same job, they just have fewer resources to do it with right?

Peter:         The Saatchi bit. I haven’t worked there in about 20 years, but my time there, in New York and London, becomes the way people position me. I’m positioned as a Saatchi guy and I certainly use those words because, frankly let’s face it, it helps me position myself-

Drew:         Absolutely. Great cache.

Peter:         Exactly, but the reality is, I probably learned more about sales running two internet companies and running my very own agency, which fluctuated between about 20 and 35 people over the course of 7 years. I learned more running an agency, than I ever did actually working at Saatchi and this is in respect to business development.

Drew:         Give us an example of something that alluded you when you were at Saatchi, but you learned … you got punched with it square in the forehead at either your own shop or one of the startups.

Peter:         I had an interesting point in time near the end of my career at Saatchi. I was running business development in Europe and we were a very successful London agency, but we were having trouble in our New York office. In fact, things were kind of falling apart. It was the last year that Morris and Charles actually owned and ran the agency. New York was having major new business problems, so I moved from London back to New York to help run business development and I started asking around to see what the plan looked like.

I said P-L-A-N and people said, “We don’t have a business development plan.” Let’s face it, you need a plan and when I started to talk to management about having a marketing plan for the agency, they couldn’t wrap their head around that. I think that they were so used to doing things the old way – our phone used to ring all the time, that the idea of actually having a plan with objectives and strategies and target audiences was something that was alien. Strangely enough to an advertisement agency. That was my big lesson. It’s important to have a plan.

The Referral Problem

Drew:         Yeah, absolutely and yet, most agencies that are listening to this podcast and most agencies that you and I interact with on a regular basis don’t have a plan. When I talk to agencies and I say, “Well tell me about your new business plan,” I get the, “Oh well …” First, I get the cobbler’s children excuse and then I get the, “Most of our business is word of mouth or referral.” In essence, I translate that to, “We sit around and wait for the opportunity.” Way too passive for me.

Peter:         I agree completely. I think the problem with the word referral unfortunately, is on one hand, it works. There are a couple of agencies in Portland that have been around 30 years and they are very well known and they get incoming calls. That’s nice. But, the problem with referrals, which is really a big problem, is it becomes the default. If you don’t do anything else to grow. I ask agencies, “How do you win business,” and they don’t do anything but wait for the phone to ring. They say, “We get referrals.”

Of course they love referrals, but if you were to sort of turn it into a dating situation, it’s like sitting by the phone waiting for the phone to ring. It’s not a particularly robust technique in terms of strategically growing your agency. Referrals, I think, are good. It’s nice to be referred because, referred to, because I think your reputation is the most important thing you have. On the other hand, you’ve lost control of the process at that point.

Drew:         My perception of that is you don’t have the volume that you need and they’re choosing you versus you choosing who you should be working for. You’re sort of taking whatever comes through the door as opposed to saying, “Here’s who we should or shouldn’t work for.”

Peter:         I’m sure you’re, even though you said it, I’m sure you’re tired of the analogy of the cobbler’s children. The often stated reason that agencies do not do enough smart business development.

Drew:         Ugh.

Peter:         It’s absurd. It doesn’t make sense and frankly, if I was a client looking at agencies, one of the things I would look at, and I’m not everybody, is how do they promote themselves. I’ll go to the agency website to see if the agency is sharp.

Drew:         Absolutely.

Agency Websites

frank-prPeter:         It’s mind blowing to me how similar agency websites are. They’ve gotten even more similar as a lot of agencies use similar WordPress themes. It’s just bizarre. I don’t understand it, but it’s such an easy fix.

Drew:         Even worse than the themes are the language they use to describe themselves. I was poking around on your website and your blog. You had a great blog post where you basically showed how different agencies refer to themselves and they use, every agency it seems like, use the same 10 words to describe themselves.

Peter:         I’ll be kind to agencies. It’s very difficult to find new words to express what you do when what you do is very very similar to what the guy down the street does, so I get it.

Drew:         Absolutely, yep.

Peter:         I’ll point your audience to two websites that I think are ‘different’. A friend of mine in London has an agency, great name for the agency, London Advertising. It’s essentially a one page scrolling website. They have a brief descriptive video which is something I always recommend agencies to do. Just figure out a way to get a short video on your website to introduce yourself. I suggest people look at London because these are very strategic guys.

I found a website the other day that I thought was … the way it was drawn and I use actually drawn as in illustrated. It’s a website for an international public relations agency called Frank PR.

Right off the bat, you’ll see that these 2 websites do not look like all other agencies. You don’t have to build a website that is wacky. You just have to find an angle and both of these companies have done that.

Drew:         I think we’re in agreement that a lot of agencies struggle with new business and where they struggle is they don’t apply their resource to it in a thoughtful sort of planned way. I’m curious your take on how that comes to be. When I look at the situation, I think every agency owner will tell you, without hesitation, that new business and cash flow and having enough work to keep their good people busy is the heart of what makes their agency thrive.

In theory, they’re saying it’s their oxygen and yet they don’t do anything to make sure they get more oxygen. From your perspective, what gets in the way of agencies having a robust new business plan or marketing plan and actually doing all of the things that they tell their clients to do to help grow their business?

It’s Sales Stupid

Peter:         I think one of the issues, and believe me there are many, so it’s hard to completely generalize, but I think one of the issues is that many agencies actually do not understand sales. I often find and sort of laugh at the idea that we call sales in the agency business, business development. It becomes a euphemism. The bottom line is it’s sales. I just don’t think a lot of agency CEO’s or leaders actually understand the sales process.

Frankly, I think that they should read sales books. They need to read them, they need to look at how to do sales videos online, they need to go to conferences where people are talking about sales to both be conscious and be stimulated to do it right.

I’m going to say that since easily 60 to 70% of agencies don’t have business development plans, even a one pager, frankly guys, one page. They also don’t really understand sales.

I invented three words today, I’m sure they’re somewhere out there, they are SMART SALES PRESSURE. I thought, “Gee, that’s really what it’s about.” It’s being very smart about who your potential customer is, or in this case, client. What their needs are, how you’ve positioned your agency to meet those needs and then you’ve got to apply a little pressure to it. It’s not cold calls, it’s more like warm calls and it’s very much about thought leaderships, something you just mentioned. It’s not that hard, but I just don’t think a lot of people … Just because you own an agency, you actually understand how to sell.

Drew:         Well, and again if the way you’ve built your agency is sort of the friends and family model, which turns into the referral model, you haven’t had to sell aggressively, certainly because you’ve had opportunities present themselves and in often cases in that situation, there is no shoot out or pitch or whatever. It’s yours to lose, if anything at all.

Peter:         I did some math recently and I use it in a presentation I give on pitching and I try to find an average agency. Ten hour of RFP development a year plus six pitches a year plus business development can cost an agency $500,000. Somebody might say, “How is that possible?” Well, how much does it cost to do RFP’s, how much to do six pitches and either you’re paying yourself or you’re paying a business development director some money. It’s not that hard to get to $500,000. Though, some of that might be soft cost.

It’s imperative that agencies figure this out. It’s a side note, … another agency I point people to is an agency that just got purchased called G5 that is based in Bend, Oregon, which was one of the two cities I had my agency in in Oregon. G5 is worth looking at simply because they picked a niche and they stayed with it. It’s a niche that has not only a business development plan, but more importantly, a business model to it that will make money.

It can be done, but it requires a great deal of focus and an understanding that this is an expensive business and you better get it right. I think it’s about staying hungry, frankly.

Drew:         Yeah, I think it’s about recognizing that you’ve got to keep the pipeline full because at any moment you’re at huge risk of the big one walking away. I think when we went through the recession and talent was cheap, it was easier to let people go and hire new people and all of that. I don’t think it was easier emotionally, but it was easier just from a supply and demand point of view. But as agencies are facing a real crunch in finding and keeping great employees, the ebb and flow of business that requires agencies to layoff and hire, layoff and hire gets to be a very expensive proposition.

Lot of experts out there talking about agency new business. Some believe that a good strategy for small to mid-size agencies is to, as you described the agency in Bend, to sort of niche themselves in a category or an industry and ride that industry or category. Others suggest that it’s dangerous to just pick one niche and that you should have multiple legs on the stool, if you will. I’m curious, what’s your take on that?

Specialization and Thought Leadership

download-einsteinPeter:         We’re in the agency business for different reasons. One is to make a good living and another is to have fun. When I point people to G5 sometimes and they look at them and they go, “Wait a minute, they’ve really only concentrated on four or five categories.” One of which, for example, is storage units. Another are apartment rentals and they said, “It just doesn’t look like a lot of fun.” Okay, I get that, so it is a balance between fun and making money, but the bottom line is you got to make money first. I think that it’s imperative for agencies to figure out what is it they want.

Let me give you an example. A lot of … I talk to a lot of agencies and I say, “What do you specialize in?” I would say half of them say healthcare. Now, why healthcare? One, obviously it’s a huge industry. Two, it’s very local, it works for smaller agencies. I ask them, “How are you getting healthcare business?” The great majority just go after the accounts. They look just like the other ‘healthcare’ agencies.

They have not employed a very smart thought leadership process to sounding and looking different and looking like an expert in that category. If you want a healthcare account, you better walk the talk – and sound like an expert.

Drew:         Absolutely, and I think often times too, they jump into a broad category like healthcare as opposed to sort of carving that down even deeper and saying, “You know what? We’re in the pharma side of healthcare,” or the … One of the agencies in one of my networks, they work with small and regional hospitals, so they’ve narrowed their niche to a more definable sort of category that allows them to have a deep expertise in that.

Peter:         You just, you know, you have to look desirable. It’s kind of like going out to the bar, assuming most people still go to the bar and they don’t just use Tinder to find dates these days, but you have to look good. I’m just not sure that just saying I’m a healthcare agency is enough these days. There’s too much competition out there. How do you look and act different. One of the things my agency did, and this is a few years ago and it’s still a relevant strategy, was we studied the major healthcare brands in our region and nationally on the basis of how they were doing in social media.

My agency Citrus created a thought leadership program about healthcare social media that was very compelling to marketing directors. These directors wanted to see not only how larger organizations were using social media, this was very quantitative, but how their competitors were. We wound up winning two fairly major accounts based on that alone, because we looked like experts and we were giving them exactly the kind of information they wanted. Did it cost us a lot of money? No, but it cost some time, but it was very focused. There are lots of smart ways to get this job done. Clearly, one of them isn’t just saying, “We’re a healthcare agency.”

Drew:         Yeah, so in that example, how did you package that data? Did you hold an event, did you create a white paper, did you do a web NR? How did you a) let them know you had the data and then b) how did you deliver it?

Peter:         We did two things. We created a digital document that could be sent via email or downloaded from our website (see it here) and we created a physical document that we sent. We knew the top 20+ marketing directors we wanted to talk to. Go to my SlideShare account to see how we created some charts and created a very compelling look at a category.

Now, let me tell you that we borrowed that idea from a company in New York called L2, which did the same thing for the luxury market. I urge your audience to take a look at L2 in New York and see how they did it. Really what it’s about is educating your market. By educating them, they realize that you’re smart.

Drew:         Right.

Peter:         Of course you have to follow it up, frankly, with some phone calls. You still have to nudge them. As we all know, marketers don’t necessarily put two and two together and then make the call. You’ve got to call them, but you’ve warmed them up at that point.

Drew:         You actually have to try and sell.

Peter:         You have to sell. Correct. Smart Sales Pressure.

Drew:         I like it. You better patent that right away or get a trademark on it. Right.

Peter:         I know, like business development Warm Calling the art of which I have written about over the years. I should’ve patented that one too, but okay.

Part Two

Part Two is HERE….

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