You have to be in it to win it, which means pitching is an inevitable part of agency life – be that design, digital, PR or creative agency, you have to spend time and money winning the work.
Are you tracking how much the new business process, including internal and external meetings, travel, expenses and work spent on the pitch itself is really costing you? Are you also thinking of fair and reasonable ways to recoup some of these costs?
In this post, we offer some advice gleaned from our agency network and respected publications on tracking new business costs and using agency insights to help inform your new business function.
If you’re a project manager you may be familiar with the term ‘analogous estimating’ - learning from past projects to estimate for new ones. The same principles can be applied to new business.
Which pitches have you won, which projects have been the most fruitful, which types of projects have been extremely expensive to win, which client types stick?
All too often, agencies think any new business is great but the reality is that some projects aren’t worth it. They’re expensive to win, a nightmare for the team and if you look at the historical data, you’ll see there’s a history of such projects overrunning.
Having access to complete and accurate project data, in the context of new business, will help you make better-informed decisions about what work to go for in future. Sticking to what you’re good at will have number of game-changing benefits such as client retention, more successful projects, more work won on a reputational basis and a truthfully carved niche. A great backbone for healthy growth.
As important as tracking what works, is tracking what doesn’t. So rather than chalking off new business in a pool of agency expenses, record it. Every new business failure, if recorded, will help you learn what to go after in future.
When you start tracking new business costs you can see how much money is spent in order to win a certain amount of work, and you can start to think about recouping costs. But all too often new business is seen as outside of the project so costs never get factored into the project or wider client profitability evaluations, so the idea of recouping some of the costs isn’t considered.
If you’re preparing for a pitch by investing time getting under the skin of the client, understanding their project and their audience and working on concepts (basically, delivering a good pitch) then you’re doing a lot of the initial work needed for the project. If you’d normally charge for this work then you still can, you’ve just got a head start on the work.
There are other ways you can recoup costs too. You may have a lot of experience in one area, eg apps, so you’ll have done a lot of the exploratory groundwork needed already. The fact that you’re already a whizz is great, but don’t assume you can’t charge for your existing knowledge. Charging for strategic insight, in general, is a great way to use your skills, add value to the client and recoup some new business costs.
But the first step is to record how much you're spending winning work on a project and/or client basis.
We’ve mentioned the necessary nature of new business and pitching, but there’s one group where you can win business without this – your current clients.
Look at your existing clients. Do you have a stand out client? If so, do you have a dedicated process for nurturing them? Sounds obvious, and you probably do have a process of sorts in place, but are you maximising it? And do you have all the correct financial data to see which clients are the ones you should be nurturing? More work from an already over-serviced client will have the adverse effect. There’s some advice on how to accurately see which of your clients are your most profitable in our recent blog - how profitable is your flagship client?
If you have a system that can clearly and honestly show you which clients are working for you, then as well as the benefit of knowing who to focus on, you'll gain a greater understanding of which types of clients you should target from a new business perspective. Understanding which clients work for your agency, loops back nicely to understanding which project types work. If you nail both, then you're in a very strong position.
In many agencies, the new business department is a team of one, but the truth is, everybody in the agency has an impact, or an opportunity to impact, new business.
Client services listen to client’s wishes and grumbles all day. Project managers are at the coal face of projects. Schedulers can see what work would be ideal for the studio at any given time - maybe there’s a heap of design downtime coming up?
It’s everyone’s responsibility to think commercially and see where there are opportunities. Having the right communication channels and a solid, all-encompassing agency system giving you visibility of this will help enormously.
Synergist is a complete project management and job costing system with a dedicated function for tracking new business. You can track new business vs current clients as well as new business against an individual project or client.
The increased agency visibility gained through Synergist will give you a deeper perspective on what is working within your agency. You’ll also uncover hidden patterns and have a greater grasp on project and client health.
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