CAMPAIGN REPORT ON CHOOSING AN AGENCY: The new business - New business is the lifeblood of agencies - but it seems a growing number are asking specialist consultancies to do the donkey work. Robert Dwek reports on two companies who operate in this delicat

In these competitive times, agencies are increasingly casting aside strategic and creative qualms and turning to specialist companies who promise to help them acquire new clients. The obvious question is whether this third party - a complete outsider - can navigate the tricky course between the client, him or herself, and the client’s potential client without sailing into stormy waters.

In these competitive times, agencies are increasingly casting aside

strategic and creative qualms and turning to specialist companies who

promise to help them acquire new clients. The obvious question is

whether this third party - a complete outsider - can navigate the tricky

course between the client, him or herself, and the client’s potential

client without sailing into stormy waters.



Ian Forbes, managing director of one such agency, Alchemis, believes he

created a new market when he formed the company 12 years ago and began

offering an outsourced new-business service two years later. He has a

background in ad sales and now claims to represent ’every type of

marketing services agency’, ranging from advertising to design and PR.

Most of his 55 clients are medium sized agencies, although he adds: ’We

have a couple in the top ten.’ However, like others in this secretive

line of business, he prefers not to name names because agencies ’like to

keep it quiet’.



Alchemis claims to be a cut above most of the telemarketing agencies in

this area because of its strict recruitment policy. ’We go out and pay

serious money to people who like new business, have a track record in it

and are good at it,’ Forbes says. The age profile tends to be late 20s

and early 30s. The company operates with a flat management structure

which makes it more akin to a management consultancy than to the average

telemarketing outfit. Forbes’ employees - currently 12 - ’really get

under the skin of their clients and occasionally go with them to

new-business pitches’.



Despite the traditional image of bold and brash agencies doing anything

to woo potential clients, Forbes maintains that cold-calling has always

held a particular terror among the advertising fraternity. It seems that

ad folk, for all their front, are desperately afraid of rejection. Or

rather, they were. Nowadays, thanks to the generally increased

competition in all walks of business life, the stigma of cold-calling

has receded. This has made it much easier for ad agencies to consider

outsourcing some or all of their new-business work, especially where the

wooing process can take years rather than weeks or months. ’It’s not

easy to keep your eye on the ball unless you’re 100 per cent focused on

the potential client,’ Forbes says, by way of explaining his company’s

increasing popularity.



But are agencies really safe in his hands? Is there not a danger that

clients will be confused about who they are dealing with and that the

likes of Alchemis will be singing from a slightly different hymn sheet

from their agencies?



Absolutely not, Forbes says.’My staff are complete professionals who

want to do the job, know how to do it and will research everything to

the nth degree before they pick up the phone. They inspire confidence at

all stages of the process. In fact, unlike many new-business directors,

who are paid an awful lot of money to get in front of prospects, our

people are almost paid not to set up meetings. They are acutely aware of

the fact that most of their agency contacts will be senior directors who

have better things to do with their time. For us, it’s definitely a case

of less is more.’



John Pummell, the chairman of the New Business Consultancy, also makes

great play of his company’s long-term approach to capturing new

business. Now with a staff of 25, he started the agency in 1991 as a

’one-man band’ and claims to have worked for more than 50 agencies since

then. He believes his focus on winning international new business gives

NBC a lead over its rivals.



Pummell has an agency and media buying background and says his

experience at TMD Carat as new-business director prompted the launch of

NBC. ’I ran everything myself, from telemarketing to credentials pitches

and sometimes ran the account if we won it. This wasn’t the most

efficient use of my skills and, when I talked to industry colleagues, it

became clear that there were loads of people in a similar situation. I

started to look around for help but found there was nobody who really

understood what I needed. I realised there was an opportunity for such a

company.’



He believes the ’cultural nervousness’ of using an outsider for new

business is decreasing daily. ’There has certainly been a very big

change in the past five years. I would liken it to companies making the

decision to outsource their PR, which is now seen as an added-value

activity. More and more agencies appreciate the fact that the way we

work makes us incredibly motivated and accountable. It’s very hard to

match our focus on new business.’



NBC tends not to get involved with the actual pitches but it does get

involved with agency training and database building. The core business

has naturally expanded into areas which include the training of agency

staff for presentations and in such arts as the psychology of

meetings.



The company has also found a demand for PR, specialist recruitment in

the new-business arena and management consultancy - which means project

work such as putting together agency teams and advising start-ups.



NBC’s new-business staff are rewarded with a mixture of retainer and

performance fees. The company is paid every time it books a credentials

meeting, although Pummell stresses this is ’not just a case of sticking

a boot in the door. It has to be with the right person at the right time

in the right company.’ Sometimes a higher fee is negotiated in advance

of NBC bagging a really big pitch - ’the kind of thing that appears on

the front page of Campaign’. And, occasionally, there is what he calls a

’win bonus’ which might take the form of a flat fee or a percentage of

profit from the first 12 months of trading with the new account. He

stresses that this is optional, although Forbes at Alchemis finds the

idea distasteful, arguing flat fees are sufficient.



As for the thorny problem of treading on agency toes, Pummell insists:

’When we’re appointed we make sure that we don’t target any of the

existing client list or anyone else the agency doesn’t want us to

contact. And we always call the agency first before making contact with

a prospect.



For us, the process of building a new-business relationship is like a

courtship - we’re not so over-zealous that the prospect expects us to

turn up at the pitch if we get to that stage.’



Although the average age of staff at NBC is 26-27, Pummell also claims

they are well-grounded in new-business work. In addition, ’we are

constantly re-evaluating and retraining’. The task of getting to know an

agency’s business is taken very seriously. ’We have a thorough immersion

process when we’re first appointed, spending hours with the client and

getting to know them in a very focused way. Our people have to go

through this because they work without scripts.’ After these initial

meetings, NBC staff will liaise with their appointed agencies on a daily

or weekly basis.



The argument in favour of outsourcing new business does seem to be

gaining ground among ad agencies. David Muir, head of new business at

O&M, says: ’Used properly, these companies can be extremely useful,

basically because there’s a hell of a lot of slog for in-house people to

do and so much to keep track of. People like Alchemis can help you

manage that process and provide real added value.’



Robert Bean, chairman of the two-year-old agency, BANC, believes they

come into their own once an agency has reached a certain size and

becomes more discriminating about who it targets. ’I think of these guys

as highly skilled battering rams, although they’ll hate me for saying

it. But the pulse and direction must always come from within the agency

because new business should have everything to do with strategy and

nothing to do with hustling.’



Some ad agencies, however, remain unconvinced. ’I’m sure these companies

have created a successful market for themselves in getting appointments

for agencies,’ Steve Kershaw, the business development director at BBH,

says. ’But our experience is that if we’re trying to be more specific

with our targeting and to get a very specific message across then it’s

better done in-house.’



Even so, Forbes concludes: ’A lot of people are still very cynical about

this but I think there’s a snowball effect, certainly from our own

recent experiences. Agencies do seem to be more receptive to our kind of

service.’



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