Tag Archives: new business meetings

When Walking Away Is The Right Decision

I hate walking away from prospective business, but a recent situation made me realize that sometimes that is the best outcome. A few months ago I received an inquiry from someone purported to be a consultant who was given our name through a mutual business friend. She was looking to bring in a new media agency for a small HBC company. The brief she sent focused on two objectives; reduce the agency fee and improve the media efficiency (she meant to say lower the CPM because media efficiency and media cost are not the same thing).

I scheduled a conference call with her and one of my key people, while on vacation, to discuss the project and see if it made sense for us to participate. We opted to go forward and had an in-person meeting with the consultant the following week. As she briefed us it became clear that she was asking for spec work, a fully fleshed out media plan—read my prior post on this subject here http://wp.me/p2edMw-2s

There is a certain amount of spec work I am willing to do in a new business pitch. Anything more than that I ask to be paid for. In this case I asked for a “go-away” fee on the work if they did not hire us. It’s an interesting approach in that often times the work is good enough that it forces the prospect to hire us or pay two agencies. The problem here is that we wanted a lot more than the prospect was willing to pay. They did not put the same value on our work as we did. Our ask was 10X what they were willing to pay.

We settled on an intermediate number, but I insisted that it be only if the client agreed to our ongoing fee structure. It made no sense for us to continue if the client wasn’t intending on paying us the compensation rates we wanted. The consultant danced around the commitment and kept insisting that we needed to do the spec work and the fees would work out. Red flag number 1.

Red flag number 2: the consultant asked us to break out our fees for planning and buying separately because she wanted to manage some of the buying herself. Apparently she had a relationship in the :10 TV unit space and wanted to be more than the consultant. She was going to push for the agency that allowed her to maintain this position—and likely the one who planned the most :10’s.

It was then that we decided that we did not want to pursue the assignment because there would be a lot of spec work, which even if they did not hire us, would benefit the consultant more than the client or us.

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The Model Isn’t Broken. It’s Fixed.

Sony, VW, P&G, J&J, Bacardi, SC Johnson, Visa, 21st Century Fox, L’Oreal, Coca Cola, BMW, BASF. What do all these companies have in common? They all have placed their media business in review, or recently completed a review. Their incumbent media agencies; the usual suspects—OMD, Zenith, UM, Mediacom, Vizeum, Carat, Starcom/MediaVest. The agencies involved in the review; the usual suspects.

Insanity is doing the same thing over and over again and expecting a different result.

I’ve heard and read that some people believe that industry change (content, integration, analytics) is driving this rash of reviews. If so, why are the same agencies that some clients are dissatisfied with all of a sudden appealing to others? Why would OMD be a good repository for Bacardi, which they recently won, when current clients J&J and Visa have put their accounts in review? Is it because what is shown in new business pitches is not what is used on a daily basis? I witnessed much of this when I was at Initiative, albeit a dozen years ago. The people who work on client business think many of the tools and sexy stuff shown in new business pitches is just that, only shown in new business pitches. It’s not practical for everyday use because the planners have too many boxes of GRP’s to fill in. They do not have the time to solve real business problems.

So what is the value proposition of these mega-media agencies? It certainly isn’t buying leverage because smaller agencies can match the big guys on media pricing—and often beat them. The big guys speak of relationships with the media companies, but the media companies are putting more and more inventory up for sale in the open market, using exchanges to eliminate the human aspect of transactions that is rife with inefficiencies.

Others suggest that the reviews are procurement driven, which explains why only the usual list of invitees are participating. These big agencies hate losing business and they’ll promise everything to win. They have a beast to feed to perpetuate their own myth and they believe their own BS.

You don’t have to. If you want the same-old solutions join in the Mad Hatter’s Tea Party. If you want real change you really have to want to change.

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Buyer’s Remorse

A new CEO comes in, ousts the CMO and VP of Marketing and tells his smaller media agency that he won’t renew their contract because he has a larger media shop he’s worked with and believes their BS about bigger agencies always buying better than small ones.

This happened to us recently. When the CEO’s preferred media agency submitted a ridiculously high compensation proposal suddenly we’re back in the mix. Our fee proposal was very fair. We even offered the client a better deal. We get an opportunity to pitch ourselves to the new CEO who, for the previous two months, wouldn’t even acknowledge our existence.

We have a great meeting. We explain the fallacy in believing that larger agencies “always” get better pricing. We tell him you get best pricing (and overall work) from people who care about their work and have time to do a great job for you. They take the time to negotiate for value and continue to drive down costs if they can rather than stop when they reach the benchmark. Sometimes those people work at bigger agencies, but more often they work at smaller ones. He mutters on his way out “that was a great meeting”.

We have the support of the marketing team, the research team and the field marketing personnel who all lobby for us to be retained. The CEO asks us to submit pricing on a prototypical buy in 50 markets. We bought those markets the prior year so we used our actual achieved costs. The CEO hires his preferred media agency. We’re disappointed, as we should be. We felt we had a chance. We believed we won the CEO over. Then we felt used simply so he could get a better compensation deal from the agency he hired.

A month later one of the marketing managers calls us to ask how we got our media pricing because the new agency can’t meet those costs. Why weren’t they asked to submit pricing on the same prototypical media buy that we were asked to? The CEO could have hired the better agency if he held them to the same standard throughout the process.

We get more calls asking us to meet with the new agency to tell them how we achieved the costs we got. We outright refuse and offer to handle the business instead. “Hire us and you’ll get those costs”.

Now the CEO has a recruiter calling one of our senior people to ask him to interview for the head of media position. Our guy says to the recruiter “If he respected me so much and wanted me working on his business why didn’t he hire my agency?”

He wanted a larger media agency. He got one. Be careful what you ask for. You just might get it.

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To Spec or Not To Spec

To spec or not to spec, that is the question. During new business pitches, that is. One of the most debatable things to do during new business pitches is whether showing speculative work is beneficial or dangerous. Don Draper famously told a fictionalized Conrad Hilton in Mad Men “Connie, I get paid for that” when he thought Hilton was seeking free advice. That is the danger agencies face when a non-client wants to pick their brains.

I almost told someone the same thing a few months ago when the tone in a new business pitch took an antagonistic turn.  This prospect had an arduous RFP that required days of editing and wanted a meeting two days after the proposals were due.  The process we were asked to follow did not specify what they wanted to see in the final meeting so we prepared mostly case studies and credentials. A half-hour into our meeting I see the prospect doodling, frustrated and finally putting down his pencil and saying “No more case studies, please. We wanted you tell us your ideas. What you would do for us.”

I was tempted to respond as Don Draper did, so I looked around the room for a signal. Often I am the designated heavy because it comes so natural to me. But it seemed that my colleagues were very interested in trying to salvage this meeting.  I let them try to recover and they did exceptionally well.  A few minutes later the prospect was feeling better about the meeting as we tossed out a couple of strategic ideas, all of which were included in the proposal we sent them two days earlier. Yes, they read the proposal so all we did was embellish the ideas somewhat.

We left the meeting feeling a little better, but not optimistic about getting the assignment. In reality we weren’t certain we wanted to either. Our belief was that a prospect who isn’t clear about expectations in a pitch will not likely be more clear once they’re your client.

In this case not doing spec work didn’t get us hired by someone we realized we wouldn’t want to work for anyway. As a media guy there’s a certain amount of spec work that I find is helpful. I’ll sometimes present the construct for a proprietary customer segmentation, but not the outcomes or the recommendations it would suggest. Not all media folks do what I do, so I’m not sure what spec work a different media person would prepare.

Have you had a similar situation? How did you handle it and what was the outcome?

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The Value of Listening

Earlier this week my business partner wrote a great blog on why listening is a crucial skill. I encourage you to read it either before—but make sure you come back! –or immediately after you read on here.

http://markkolier.wordpress.com/2013/05/20/to-become-a-better-listener-try-not-saying-anything/

This became painfully clear to me later this week in a new business meeting. Allow me to set the stage; we get a lead from a friend which includes a link to the prospect’s website. We pore over the site, come up with some thoughts on how we can help improve the site and what types of executional ideas we would suggest in the first meeting with the prospect. We’re fifty yards downfield and so ready to let this prospect hear our ideas.

As we usually do in these meetings, we asked them to talk about their business and their situation first. Smart move. The ‘friend’ who sent us the company’s website link had sent us the WRONG link. We researched the wrong company. We had ideas that were irrelevant to the people in the room. What are the chances that two companies with such similar names could be in the same major product category but vastly different subcategory verticals?

100% this week.

Here we were prepared to toss out ideas that would have been head-scratchers to these guys in what would have been a very short meeting. Instead, by letting them talk we learned so much about their business and their issues. Of course we asked clarifying questions to show we were tracking along throughout, but they clearly did most of the talking. 75 minutes into a one-hour meeting we finally talked about ourselves for less than ten minutes. It was a great meeting.  They liked us.

Luckily my partners and I are very fast on our feet. We recovered like a kid flying head over heels from his bike proclaiming “I meant to do that”.

Who am I kidding? Asking them to speak first saved our asses.

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