Following the money without going broke

When you're on the hunt for new business, meticulously efficient allocation of time, money, and talent is essential. Anita Chabria learns how it's done.

When you're on the hunt for new business, meticulously efficient allocation of time, money, and talent is essential. Anita Chabria learns how it's done.

Bringing in new business is a priority at every PR agency, regardless of size. As the tight market of the past few years begins to show glimmers of recovery and more companies are searching for PR help, finding the best way to land clients against stiff competition is a growing concern. The new-business search can be costly, taking staff resources and billable hours away from paying clients, and there are a number of checks and balances that need to be taken into account in every decision. From conglomerates to boutiques and even one-person shops, every PR outfit seems to have a slightly different philosophy when it comes to scouting for fresh work. Some believe that the process is best handled by a single staffer. "The fundamental strategy we have is to put a dedicated senior-level person in place who handles new business exclusively," says Sandy Skees, EVP at Porter Novelli's (PN) Silicon Valley operation. "What we've found is that when you assign one person to work directly with the [potential client], it improves communication and increases the sophistication." Other agencies divide the task between top-level executives, letting each practice area mine their expertise and contacts for leads. "We have a percentage of several senior staff members who handle new business," says Judy Johnson, who manages the Los Angeles, San Francisco, and Seattle offices of Golin/Harris International. "We have a lot of people who are working on the process of making calls, looking for new leads. It's not like the burden is on one person." Regardless of who is charged with the task, the experts agree that the first step on the new-business trail is deciding if it's a client you really want, and determining if your agency has the capabilities to keep the company happy in the long run. "There has got to be a good fit with our expertise," says Tony Sapienza, cofounder of Massachusetts-based technology boutique firm Topaz Partners. "We just don't run after any new-business opportunity that comes our way." Evaluating that "good fit" can be a complex process. It involves examining what your agency can realistically offer, as well as what the client needs and expects. If those components are not in line, the new business might not be something that you can win in a competitive review or a client you can retain even if you do win. That makes it a financial loser in the long run, and a waste of new business resources. To avoid those kinds of costly errors, Skees relies on PN's in-depth process for weeding out less-than-stellar clients. "Culture and expertise," she says. "If you assess those two items, there really isn't much left to look at. If the expertise and talent is a match for the assignment, and you have the resources to put against it, the client is probably worth pursuing." Johnson agrees that culture and expertise are key considerations, and often determine how many resources she puts behind pitches. "If we feel that we have a great history in a particular arena, lets say it's a baby food company, we'll be all over it, people and resources, because we know we have a good chance of winning," she explains. "If it is something that is a strength for us but there are other people we think are better suited for it, we will not spend as much, or not even go after it." And while the size of the account is always a factor in how much resource will go into wooing it, David Nobs, GM of LA-based Rogers & Cowan, points out that some clients have value beyond billable hours that should be considered. "Usually the small ones are worth pursing because there is either a long-term benefit, they can grow into larger clients, or they really match up with the agency's capabilities," he says. "Some clients are indeed door-openers for other areas." Once you've targeted a prospective client, the challenge is to win the account without spending more than it's worth. With today's competitive pitch process, which can drag on for months or longer, knowing up-front how much money is acceptable to spend is a vital part of new-business strategy. "Like most things in our industry the process and approach to budgeting has come a long way," says Nobs. "It's no longer the dartboard method where you pick a number based on what you think it will cost." Many agencies have yearly allotments for new business. "Generally as a rule we set aside in our annual budget a percentage of expected revenue for the purpose," says Johnson, adding that Golin typically reserves about 1% of expected earnings for new business. For those with a less structured set-up, budgeting is often done on an account-by-account basis, looking at who the competition is, what the client's expectations are, and how much the business is worth to the agency. That involves examining specifics, such as travel costs to reach the client or assemble a team, creative costs for supporting materials, research into the market and the client, and staff hours to come up with a comprehensive pitch. Because of the competitive environment, those costs can add up. "Just responding to what people are asking for isn't enough," says Johnson. "You must go beyond the basic response earlier in the process. If you don't give them some great thinking, you're not in the next round." Despite that call to put more on the table sooner, Sapienza says there does have to be a limit. While large agencies might be able to throw big money at winning business, smaller agencies don't have that luxury. But that isn't always a negative. He gives an example of a recent pitch where the client asked that Topaz fly their entire team to a different city to make the presentation. Topaz declined, instead offering to fly only key executives and conference call in the rest of the team. He explained to the company that that kind of cost-saving tactic allowed his agency to offer its services for less money. "It helped us to stand out that we were trying to save them money. They appreciate that," says Sapienza. "I don't think it hurt our chances." ----- Technique tips Do have a clear structure in place regarding who is responsible for soliciting new clients Do evaluate whether a client is worth pursuing Do examine whether your firm has a good chance of winning before committing resources Don't go after just any piece of new business that comes along Don't pursue new business at any cost - set limits on spending Don't pass up smaller clients. They might have value outside of billable hours

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