Many agree the best way to grow a firm is through organic account growth and not new business. David Ward finds ways to turn a small account into a marquee one
The welcome news for the PR industry in recent years has been that as the economy has steadied and strengthened, more companies are boosting their marketing and PR budgets.
This means more opportunities to pitch new business, but it's also a chance to grow the business of your existing clients. This isn't easy, of course, because even companies that are thrilled with the work of their outside firms still may need some serious convincing in order to expand those relationships. But all things being equal, it's probably the surest way of growing a firm's revenues.
"Generally speaking, if there is loose money in the budget, it can be easier to grow an existing account than land a new client," confirms Shawn Whalen, SVP at Waltham, MA-based Schwartz Communications.
Of course, in order to grow an account, an agency first needs to make sure it's working with companies and industries that are primed for expansion. That often means starting with a single, low-budget project.
"Some firms may turn their nose up at a smaller budget, but you really must look at the first project, big or small, as an opportunity to prove excellence," says Tom Coyne, president and CEO of Parsippany, NJ-based Coyne Public Relations.
Once you've landed the client, Coyne stresses the need to show patience. "You want to let them know that you're available for additional work and that these are some of the things your firm can do," he says. "But the last thing you want to do is push too hard because no one will want to work with you."
It goes without saying that you'll have to prove your firm's worth on any initial projects, but even then, says Formula PR president Michael Olguin, you can at least suggest additional projects, as long as you realize they may have to wait until the next fiscal quarter or year.
"We try to let our clients know that we're in a growth mode," he says, "and we try to develop an understanding that if we do a good job, you'll introduce us to other opportunities." Olguin notes that Formula was able to turn a one-off project for Newcastle Brown Ale into a comprehensive annual relationship. "All this doesn't happen overnight, so there needs to be a tremendous investment in the business relationship to grow an account."
Ironically, the best path for long-term account growth is to focus on short-term specifics and actionable ideas rather than try to articulate a broad vision. "It's historically been easier to entice a client to increase a budget if we are able to get them excited about either one new idea or a series of new project ideas," notes Allyson Rener, president of LA-based Murphy O'Brien.
Not all these new ideas will be embraced by your client. But Whalen adds that even pitching a specific project, such as a two-month analyst tour, helps drive home the message that you have a strong industry-analyst practice at the client's disposal.
With major companies often using multiple outside firms to handle their PR, new account growth on your part will likely come at the expense of another shop. "Every agency will tell you they want to play nice and [display] professional courtesy so that you don't develop adverse relationships with another firm," says Olguin. "But that doesn't preclude you from showing [the client] what else you can do."
But if there's already a firm in place doing work for another division of your client, it's probably better to let the company make the first move. "Most of our expansion within organizations has been initiated by internal sources," says Dean Bender, cofounder of Bender Helper Impact. "It's been my experience that the client constantly compares notes with their counterparts within an organization. When we initially signed a business unit of Yahoo, we heard shortly thereafter from another unit based on what she'd heard about us from her counterpart at the other division."
Coyne notes that most internal contacts are glad to recommend you to other brands and divisions within their company, in part because it can make them look good if an agency they've brought in ends up driving overall growth. But at the same time, those contacts will probably need some reassurance that your commitment to them will remain unchanged. "What they don't want to see you do is spread your resources so thin that your service to them drops," he says.
Coyne says you also never want to pitch additional divisions or other executives without the knowledge of your original contact. "Going above someone's head may shake things up short-term, but in the long run you'll hurt a relationship [in a way] that really can't be fixed," he says.
It's nice to think that growing an account can be an informal, almost organic process. But even if you deliver solid results, simply adding billable hours to a previously agreed upon contract will more likely get you fired than get you long-term work.
Olguin stresses the need to keep a client continually aware of where you stand, not only in terms of your work, but also on where you sit in regard to hours against the project's budget or your monthly retainer. "Keeping them up to date on the whole billing process will help them understand that either you're deferring projects or that the budget is too small for what they want to accomplish," he says.
Throughout this process, an agency needs to not only thoroughly understand its client's vision, but also its resources. Bender says that if a firm's track record is solid and its new ideas are strong, most clients will find more money to expand the relationship. "At the end of the day, even if it compromises what funds will be available down the line, it's very much a 'now' generation in the competitive marketplace for all companies," he says.
But even with this focus on the present, Olguin says, you must be aware of the client's long-term outlook. "Established brands are at least 12 months ahead in terms of planning, so you want to be ahead of that game," he says. "For a lot of our clients, we already know the products they're planning to release in 2006."
Do understand your client's budgetary timetable. Funding for both expanded retainers and new projects often gets determined months before the fiscal year
Do keep your original contact informed whenever you're pitching other departments within the same company
Do consider offering multiple division discounts. A reduced retainer for a second or third division can alleviate tight budgets while leveraging your economies of scale
Don't just pitch expanding a business in general terms. Specific actionable ideas/projects are easier for clients to green light
Don't push too hard, too fast. No client wants to be sold to all the time. Wait until you've delivered strong results before suggesting growing the relationship
Don't worry about geography. Most companies are now comfortable with modern communications technology, and working for separate divisions that are far apart is unlikely to be an obstacle