Developing new business is no longer a question of scrambling around for opportunities; it's now about making sure you pursue the right ones.The past few years of economic downturn have left many firms repeating the mantra "any business is good business." However, the recently improved economy, along with the accompanying rise in prospective clients, has left agencies somewhat out of practice when discerning which business options are worth the money, time, and effort it takes to pitch.
Rigid guidelines, such as number of employees or annual sales, remain useful tools, but agencies now have to scratch beyond the company's surface to ensure a good match.
"I think that when times are tougher, you might stretch the rules a little more," says Margaret Booth, president of M Booth & Associates. "When we go after a client now, we look to attract companies where we can become a partner and grow organically. We like to work with big companies where we'll take an assignment of any size and hope to eventually grow that business from within."
When selecting any new-business opportunities, Shawn Whalen, SVP at technology-focused firm Schwartz Communications, suggests looking for marketing-driven organizations to discover which companies will let PR impact the bottom line.
"Look at the composition of the management team," says Whalen. "If the CEO and other top-level executives have an engineering background, a lot of times they tend to be more fixated on the technology, rather than realizing that marketing will be key. The technology will not sell itself."
"I think we all went through years of being burned," says Jon Bailey, president of San Diego-based Bailey Gardiner. "Now I'm much more interested in working with people that are more respectful of us as professionals and look to our resources as credible and very real parts of their management process and executive team. I don't care to just be a vendor providing services to a marketing department. I'm not interested in working with clients that measure our success based on column inches or number of clips - it's a sophistication level that I'm looking for."
And that sophistication does not have to be directly proportional to the client's profit margin. "I'm willing to take clients that are not the most lucrative," says Bailey, "if I feel that they 'get it' and that we can help them get where they want to go."
A prospect's history with firms can also be a telling clue to the future of a relationship.
"When we're working with a company that's worked with agencies in the past, they know that there are many different avenues and aspects of PR," says Vince McMorrow, PR director at RMD Advertising.
"It allows us to work with smart groups and to be profitable quickly."
In order to help employees across the board determine which pieces of business are worth a pitch, Euro RSCG Magnet has created a "new business guidelines" document.
"People at an agency should know what makes a strategically important client for them versus a relatively unimportant client - and it's not always entirely clear," says president Paul Jensen. "For most organizations, a dollar of revenue equals a dollar of revenue, and they don't pay attention to making sure their teams really understand what makes the most valuable clients."
"Pitching a piece of business today is a lot more work than it was four or five years ago because there are more players and the clients have become very focused on RFIs and RFPs," he continues.
And the RFP itself can send up a red flag during a company appraisal. "When the RFP would have taken between $30,000 and $50,000 and the potential clients begin looking at between 12 to 30 firms, it becomes a cattle call," says Booth. "We just won't do that anymore because that says to us that the client really does not know what it wants."
According to Michael DeMent, principal at DeMent O'Flaherty & Collier Communications, his agency only pursues RFPs when it thinks it can offer a noticeably different approach than its competitors.
"Without clear-cut differences, especially against larger competition, the 'not wrong' choice for a prospect is still to hire the larger agency," notes DeMent.
One noticeable by-product of the increase in potential clients is the ability of agencies to ask the questions they may have skirted before.
"I think that I'm a lot smarter about the economics of the deal," says Bailey. "I ask harder questions of my clients about budgets and willingness to pay. I've gotten more direct in talking about the compensation and the dollars than I used to. Before, we were just happy to get the business."
In addition to asking financial questions, research into a company's history is essential to deciding where it's headed in the future - and that rings especially true during times of economic prosperity.
"In a boom time, it gets harder to qualify companies because everybody's growing, everyone's winning new customers and launching new products," says Morgan McLintic, VP at Lewis PR. "It gets harder to pick the ones that are really going to emerge"
Being sure about the company's future is essential to decision-making. "The problem when you work with a company that you are unsure about is that not only will you not put your heart into it, but your client is not going to give it their all because they have the same fears you do. Thus, you're doomed to failure," says Todd Defren, principal at Shift Communications.
But while firms may be calling the shots at this moment, they still need to avoid burning any bridges with potential clients for the future.
"In the late '90s, there was an arrogance on the part of a lot of agencies," says Marianne O'Connor, founder and president of Sterling Communications. "Now we don't expect clients to compete for our business - we just try to find the best fit."
Do diligent research on a potential client's business, both current and historic
Do ask specific questions concerning financial aspects of the account
Do look for a strong cultural fit between client and agency
Don't pitch if the client's expectations are not aligned with your capabilities
Don't put too many resources into a client who's asking for extensive RFP submissions from more than a dozen firms, unless the budget is suitably large
Don't neglect to decline a pitch process gracefully; your paths may cross again