The Ad Agency Business Development Director: How To Get Past Wishful Thinking
The awful “Death of a Salesman” image at the left means two things: The salesman is dying and his company’s sales program is probably heading towards a death spiral as well. Advertising agencies should not want to go in this direction. However, many agency sales programs are spiraling — or, are at best just static.
The way out is to have a very smart business development plan (crazy fact coming: most agencies do not have one) and, in many cases, a well-focused sales professional leading the way. Here is a path to get there.
First: The Business Development Plan
You cannot win at new business if you do not have a business development plan. I’ve written about how to develop a business development plan here – “How to Build A Winning Advertising Agency New Business Program.” Warning… it is over 2,000 words. Another warning, as of today, it has been read over 4,780 times and there is a decent chance that one of your agency competitors has read it.
Next: The Business Development Director
I am asked a few times a month about how to establish and manage the role of the ad agency business development director. I was one (at Saatchi & Saatchi New York and London) and had them working for me at my own agency and two Internet start-ups.
Most agency leaders hope and pray that they will find the right sales leader and then sit back and watch the right leads role in. Sorry, it simply isn’t that easy. Sales management is hard work.
I wrote about biz dev director position and interviewed Brooks Gilley of 52LTD (a leading creative and agency staffing firm) here – “Is Your Advertising Agency Business Development Director Doomed?”
Doomed? Why was I so down… Well, most ad agency business development directors fail. Most!
They fail for a couple of key reasons.
- Your agency does not have a business development plan.
- If you have a plan, you do not make running it an agency priority (you’ll wait until you lose that large client to get to it.)
- You do not have a sales-oriented sales compensation plan (see below.)
And, from my “doomed” blog post:
Yes, wouldn’t it be nice to have a business development director that brought in more business for your advertising agency than you can handle. But is your business development director doomed from the start?
He could be if you do not have agency objectives, a competitive agency brand positioning, something to sell beyond, “Hey we are a full-service / digital / social media agency”, a list of clients and categories you want to nail, an active up-to-date CRM system and you are not in a state of panic because you just lost your largest client and are freaked out.
Next: The Business Development Director Compensation Plan
The Business Development Director offer letter below – which is essentially a ‘sales map’ – was used by my Oregon advertising agency Citrus from 2002 through 2009. It worked, we had a solid business devopment program that helped us grow regionally and nationally. After selling the agency and becoming a new business consultant, I have shared the offer letter with my advertising agency and corporate clients. It is an excellent template that you can modify to meet your specific needs.
To win, a Business Development Director and the sales staff, for that matter, must be guided by a commission plan that creates a win-win scenario for the sales team and company. If the plan does not direct the sales person and align with your corporate sales objectives, the chances are mighty fine that your team will not find their way to the sales goals you are looking for.
This sounds obvious, right? However, most agencies do not have clear quantifiable objectives and incentives. Agencies are not alone. I recently discussed the role of sales with sales people from two major San Francisco SaaS software companies. I was surprised to find out that that these folks were a bit unsure of how their goals meshed with that of their company. Frankly, this has to be crystal clear. The offer letter is a great way to start to deliver this alignment from Day One… and it makes it very clear what SUCCESS means to your agency and… your sales team. Frankly, for many agencies this as critical a goal as it gets.
Here you go. Use it as a blueprint. Modify it to meet your agency’s goals, culture and our ever-changing ad, design and digital agency universe.
The Advertising Agency Business Development Director Agreement (A Sample For Your Agency)
Name / Address
Re: Employment with ABC Agency, Inc.
This letter is our formal offer of employment to you and confirms the terms of your employment with our advertising agency. Your starting date will be XXX.
Should you accept this offer you will serve as a full-time employee in the position of Business Development Director. Your responsibilities will include, but not be limited to, developing new clients for the agency according to pre-defined client criteria, gathering information about prospects that fit client criteria and preparing thought-leadership and research reports to be used in attracting prospects to the agency. In addition, you will make outbound sales calls, appointments for agency meetings and stay in touch with prospects via regular correspondence and mailings. You will play a key role in managing the agency’s response to proposal requests, participating in presentations and if business is successfully won, assure a smooth transition through introduction of the account team for them to take over of the new account. Please refer to the accompanying job description for a more complete review of the responsibilities.
You will receive a monthly salary of $X, beginning on your first day on the job, payable on the 15th and last day of each month. You understand that this position carries an exempt status and therefore you will not receive overtime compensation for services performed under this employment arrangement.
In addition to receiving a monthly salary, you will be eligible to increase your income through commissions earned based on obtaining new business for Agency. The program will work as follows:
- You must be instrumental in the pursuit and attainment of new clients for Agency based on prospect lists developed with Agency senior management and approved by Agency shareholders. If you are successful in obtaining a meeting with an approved prospect, you will receive a meeting bonus in the pay period following the meeting. Meeting bonus will be $500 less taxes.
- If Agency is successful in retaining the client, you will receive a commission based on the client’s cumulative earnings. The commission rate will be 5% of AGI (Adjusted Gross Income defined as gross billings collected less direct costs related to those billings) generated on each client acquired. The client must be current with payments and be in good standing in order for commission eligibility. The commission will be paid 45 days after the end of the calendar quarter and will continue for the shorter of up to 2 years from date of first billing or until the business affiliation between Agency and you ceases to exist.
- Because business development is such a priority at Agency, we want to reward active employees for their assistance in business development. As such, we want to be clear in identifying what “instrumental” versus “assistance” means in developing new business. Please see the attached Exhibit A, as a part of this offer letter, and which has been made available to certain existing Agency employees with contacts that may be in a position to bring new business to Agency.
At all times, your employment with Agency is “at will”. “At will” is defined as allowing either you as the employee or Agency as the employer to terminate your employment at any time, for any reason permitted by law, with or without cause and with or without notice.
You will be eligible for health, vision, life, disability and dental insurance the first of the month following your 30-day employment anniversary. With a start date of XXX, 201X, this coverage would be effective XXX, 201X. As an employee your insurance coverage is paid for by Agency. Any dependents you wish to cover under our group policy will be at your expense.
Please review the Citrus Employee Handbook accompanying this letter. Company policy requires that you read this handbook and acknowledge your understanding of Agency policies by signing the acknowledgment that accompanies the Handbook. A copy of the acknowledgment also accompanies this letter. Please return this signed acknowledgment to my attention at your earliest convenience.
All designs, logos, copy, production records, estimates and other material, whether written, printed, or drawn, whether or not subject to copyrighting, made or devised by you or by you with others, will remain the sole and exclusive property of Agency. Upon termination of your employment with Agency for any reason, you shall immediately return to Agency any and all documents and materials containing confidential and proprietary information.
Should your employment with Agency terminate for any reason whatsoever, you agree and understand that for a period of one year from the date of termination you will not solicit or influence any clients, or otherwise divert or attempt to divert, directly or indirectly, any client from Agency that Agency did business with at the time of such termination or had solicited or did business with during the twelve-month period ending on the date of termination.
Also, for one year following such termination, you will not attempt to recruit or hire, directly or indirectly, whether it be as an employee, consultant, agent or representative, on a part-time or full-time basis, anyone who is an employee or independent contractor of Agency now or was an employee or independent contractor of Agency during your association with Agency. You acknowledge that the restrictions contained in this letter, in view of the nature of the activities in which Agency is engaged, are reasonable and necessary in order to protect the legitimate interests of Agency and that, in addition to all other remedies available to Agency, the Company shall be entitled to injunctive or other appropriate relief. You further acknowledge that Agency has introduced you to its sources of referral, its customer lists, its processes, databases, fee schedules, etc.
If the provisions in the foregoing two paragraphs are found to be overly broad or restrictive, then they will be construed in the broadest manner consistent with applicable law.
If you are in agreement with this offer, please sign and date two copies of this letter where indicated below. As this is being sent via email, return both copies for final signature by Agency, upon which we will return a fully executed copy to you.
We look forward to having you rejoin us as an Agency employee and to a mutually beneficial association.
Very truly yours,
Peter Levitan, CEO
Acknowledged and Agreed:
Business Development Director Agreement – Exhibit A
Our advertising agency is moving into a more aggressive business development program and will be committing incremental agency resources in the form of time and funds to support this effort. Our primary goal is to add higher margin clients to our list.
We have business development agreements with some senior members of our team. These business development agreements are designed to reward specific employees for being instrumentally involved with growing our client list. The language from our agreement is as follows:
“You must be instrumental in the pursuit and attainment of new clients for Agency based on prospect lists developed with Agency senior management and approved by Agency shareholders. If you are successful in retaining a client you will receive a commission based on the client’s cumulative earnings.”
Since Agency is not in the position to pay multiple people full commissions for their participation in the attainment of a new client, we need to be very clear about what “instrumental” means in respect to business development commissions.
- Being the direct contact with the prospect and managing all on-going communications to nurture the prospect over time.
- Doing deep research and building the communications strategy and directly managing the development and delivery of the “sales pitch.”
- Running the management of the bulk of the business development process. This would include oversight of the development of specific sales materials targeting that particular prospect and managing agency resources — with the assistance of the Business Development director.
The concept of an “Assistance” reward
Because business development is such a priority at the agency, we want to reward active employees for their assistance in business development. The actual reward will be determined on a case-by-case basis but will be clearly rooted in stimulating employee participation in our business development efforts.
To be clear, assistance could mean at least one of the following:
- A direct introduction to a prospect. Direct means a clear hand-off of the prospect from you to XXX, that results in our ultimately gaining their business through her efforts.
- The sourcing of a lead. This means that you have sourced and have deeply researched a clear opportunity that leads to our gaining the account.
- The management of an agency expertise category in which your expertise and contributions to the pitch process assists in gaining the business. Categories in which we have clear expertise include: sports marketing; healthcare marketing; financial services; tourism.
Our ultimate goal is to grow the agency, increase profit margins and reward all of us – in particular, the active team members – for the great job that we are doing for our growing list of clients. We want all of the boats to float higher and know that creating a culture of active business development consciousness and support will help us realize these agency and personal goals.
I’d love to get input on this advertising agency business development director offer copy. Plusses and minuses. I work with agencies every week on their business development plans and systems. I’d love input.
Give me a shout if you want even more advice.