5 Ways to Tell If Your New Business Prospect Is Worth It
The success of any organization is based upon its ability to grow in both a good and bad economy. Perhaps nowhere is this truer than in the world of marketing, advertising, and public relations, because retaining clients for long periods of time is extremely challenging due to the internal pressures that CMOs and marketing VPs have to drive sales, which indirectly has a net effect on your agency. Thus, new business outreach can never come to a standstill. But to be successful, you must have a game plan in place that helps guide you to determine which prospects are an appropriate fit for your organization. Otherwise, you might find yourself spending time, energy, and resources against chasing the wrong kind of clients. By answering the following questions, you will have a better understanding of whether the brand is worth pursuing or not.
1. Is the prospect sophisticated and do they understand what they are trying to accomplish?
As much as you can get the prospect to communicate what their brand is all about and what their marketing goals are, the better you will be able to determine whether they are a good fit for your organization or not. When a prospect is vague and uses terms like, "We really want to build awareness" or "We just need our marketing to work for us by driving sales," the less likely they are worth pursuing. If you find yourself talking to a new business lead that talks in those terms, you must challenge them with questions like, "Who is your target consumer and why would they care about your brand?" This will help you to determine how the prospect will measure success and whether that measurement is comfortable for you.
2. Is the company funded and does it have a clearly defined budget?
Many prospects want to be competitive with the big players within their category, yet have a budget dwarfed by their competitors. In many cases, they're a start-up that hasn't even defined their budget yet. In these instances, I suggest that you challenge prospects to define a realistic budget (even if ballpark) and do your best to avoid the "Looking at your proposal will help guide our budget decisions" scenario. If you are uncomfortable with the answers you're getting, I would avoid investing too heavily in upfront time and energy in a proposal or creative thinking.
3. Is the prospect truly committed to finding a partner or just kicking tires?
As much as I hate to say it, there are many brands that love to shop their business as a way to get fresh new ideas and thinking on behalf of their brand. Therefore, it's really important to look for concrete signs that they are, in fact, looking for an agency partner. Is there a formal RFP? Have they worked with an agency in the past? Why did it end? Are they offering full disclosure of information regarding their brand and new products, etc.? The worst case scenario is when you do a lot of front-end research, strategy and creative thinking only to have the prospect decide to not hire a partner. When it comes down to it, the only product you have to sell is your time and creative ideation, so you should always try to not give it away.
4. Is the prospect conducting a huge cattle call or carefully selecting a small list of agencies they want to work with?
Always try to avoid chasing new business prospects that have promoted their RFP via the media, aren't open to meetings or personal phone calls, or ask you to submit your RFP response blindly. These are situations in which the likelihood of success is limited based on the extreme competitiveness of the pitch, a likely lack of understanding as to what the client really wants, and the inability to determine if chemistry exists between the two companies. We have found that we increase our chances of winning significantly when presenting in person.
5. Does the brand really have a point of difference in the marketplace?
Though we all want to win new business, landing a new client that really doesn't "have a better mousetrap" can be a losing proposition in the long run. As you evaluate the opportunity, be certain to consider the prospect's innovation, what news they have to announce, where the company is heading, and anything else that might enhance your opportunity to be successful. A tremendous amount of time, energy and money goes into winning new business; as such, you want to feel confident that you will be able to sustain the relationship over time.
Having run Formula for more than 20 years, I have come to believe that new business prospecting can never stop and must be a 24/7 proposition. However, just because you are always doing it, this doesn't mean you should compromise your approach or accept business that isn't right for your agency. In some cases, the prospects you decide not to chase can still be a win.