A recent survey reveals that only 34 of advertising agencies and 57% of all other marketing services companies understand how to implement a proactive new business program. A key to any new business program is prospective client database.
This is a guest post written by Todd Knutson, CEO of The List, a leading provider of prospecting information on corporate marketing, advertising decision makers and a sponsor of FUEL LINES. Todd has extensive experience in new business development, particularly for ad agencies.
Many ad agencies and marketing services companies expect their new business director to build their own marketing and sales database. Is this a smart business decision?
I remember speaking with, Jeff, a twenty-something new business guy. Jeff was a new employee at a well-known regional ad agency. His management team had given him a group of industry categories that they wanted him to pursue, and had charged him with identifying likely companies and people he should talk to.
So, he called my company, The List about purchasing a customized database of corporate marketers that fit their criteria. Jeff determined that he could purchase exactly what his agency needed for only about $3,500 and have it in 24 hours. He said he’d call back with his president’s approval.
A few days later, I called Jeff and learned that his president told him it was his job to build the database. I told him I’d call back in 6 months to hear how he was doing.
Right on schedule, I called Jeff 6 months later. Not surprisingly, he had just been fired for not generating any new business. Why? Because he’d spent the entire time building the database (at the request of his president).
Let’s do some simple math: Assume Jeff was paid $50,000 a year. Add in benefits and his total annual cost was probably close to $60,000. So, over 6 months this regional agency spent $30,000 building a new business database they never used.
Think of the losers in this equation: Jeff is out of a job; the agency lost 6 months of potential revenue; and, the management team is disheartened about the “failure” of their new business effort.
This is a common mistake made by ad agencies and other marketing services companies that illustrates the fallacy and drawbacks of building instead of buying. I encourage readers to do the math to avoid making the same mistake.
Ask these 5 questions to help determine the quality and applicability of your new business database:
- How frequently do you call and verify the accuracy of each contact in your database? If you hear 6 or 12 months, given turnover in corporate America, you have to question the veracity of what you’re buying.
- How many companies can I access that spend more than $____ (fill in your minimum) per year on marketing services? If how much your potential clients spend on marketing is important to you, be sure that the resource you buy provides a number that tells you approximately how much it is (no one knows a company’s marketing budget, so media spend is usually the surrogate).
- How many (marketing) contacts do you have at the companies that matter to me? Too often, you purchase contacts that aren’t important to you. If you need marketing, brand, media, or C-level contacts, be sure your chosen resource has them in the quantity you require.
- What contact information do you provide? Do you need mailing address, direct dials, main phone numbers, email addresses? Be sure they have what you need.