The New Business Dingo

Can analyzing the numbers really help with proactive ad agency new business?  You bet.

At the Mirren New Business Conference this year I spoke on the topic “How to get prospects on the phone when no one is answering”, which essentially outlined the seven steps for agencies to build a proactive, metrics based new business strategy, rather than the ad-hoc cold-call based approach many continue to employ.

At the core of this plan is a new business or sales “funnel”.

The funnel allows a new business director the ability to plan and then measure the results from new business activities. The funnel allows you to look at conversion metrics and identify bottle-necks and opportunities for improvement in your process. Understanding where your strengths and weaknesses exist in the process will enable you to make timely adjustments to increase your productivity.

In planning out your funnel, I suggest that it be applied only to proactive new business efforts rather than including numbers from inbound leads, search consultant RFP’s and referral business – those numbers  will mess with your proactive metrics. Create a separate funnel for each of these other agency new business strategies to determine your best sources.

A quick note, always start at the bottom and work backwards in planning out your funnel, then flip it over as demonstrated below.

Here are five (5) metrics and examples to begin building your proactive new business funnel:

1. New Fees Revenue Goal – Annualized total fees from new business won through proactive efforts
Example Goal = $1MM

2. New Client Goal – The number and average fee value from each project / client
Example Goal = 5 new clients at an average of $200K in new fees

3. Proposal Conversion – the number of proposals required to be issued to win 5 new clients.
Example Goal = 2:1 Close Ratio
Therefore 10 new client proposals at $200K each in fees need to be generated.

4. Qualified Meeting Conversion – the number of Qualified Meetings required to be held to generate the 10 new client proposals.
Example Goal = 2:1
Therefore you may need to hold 20 Qualified Meetings

5. Quality Conversations Conversion – the number of Quality Conversations required to reach Qualified Meetings goal.
Example Goal = 3:1
Therefore you may need to have 60 Quality Conversations to reach the goal of 20 Qualified Meetings. *This may be significantly higher when you first begin.

The figures provided are simply examples, though are relatively good initial benchmarks to use. I’d recommend customizing each aspect of the funnel based on your proactive new business goals, and historical conversion data.

Once you have those numbers defined: drop them into the funnel as outlined here, starting at the bottom and working your way up.

Of course you’ll need to design and implement a structured, proactive new business campaign(s) to reach your Quality Conversations goal. The strategy behind that is debatable by many; however it begins with identifying a target audience that will find your expertise and offers both relevant, timely and of value.

How to go about that planning and implementation process will be the topic of another post. Stay tuned.

Happy hunting.