2016 has been some kind of year. What kind of year, the choice of adjective, is down to you – so please insert as appropriate.
So, how was it for you and your agency? As you write your 2017 new business plan (it’s December so I’m not jumping the gun, right?) what lessons are you drawing upon to shape the year ahead? What will success look like?
Whichever way you look at it, it’s pretty much certain that 2017 will be no less challenging than 2016.
What are those challenges likely to be? Our inaugural New Business Barometer, a survey conducted amongst 112 New Business Directors between February and September 2016, may provide some clues.
Let’s start with an insight from that survey. Women working in new business are twice as likely not to have an incentive scheme in place compared to their male counterparts (42% versus 21% respectively).
Given that gender equality continues to be right up there on the social agenda – both in terms of pay and smashing the glass ceiling – this is surprising. And particularly so given that new business is essentially a sales role where incentives are the norm not the exception: 67% of agencies have an incentive scheme in place, so what’s the story with all those bright and talented women in new business roles and is there a case to be made to end the reward disparity?
Another survey finding which is rather less surprising: time and resource were most often cited as the key impediments to achieving greater new business success. This has been an enduring theme since time immemorial. What it suggests is that new business people have failed to make a sufficiently persuasive case for more investment, or that senior management do not fully appreciate the value contribution of the new business role. Or both. Neither is satisfactory.
Yes, there is increased competition for pitch briefs and some blurring of the lines between agency skills sets. These were also factors giving cause for concern amongst our respondents, together with the speed of digital transformation.
Digitalisation, as we all know, is the driving force behind changes in consumer media behaviour and their evolving relationships with brands. Marketers, our clients, are perhaps looking for more diverse skill sets and a broader range of perspectives to help them meet these challenges, and stay competitive. This is likely to be fuelling the competition for pitch briefs, but is client rather than agency driven.
And what did we discover about the pitch process itself? The average number of pitches undertaken by agencies was 29, although this varied by agency size. The pitch conversion rate was 44% – high when measured against the industry average, generally considered to be 35%.
But is 35% a useful benchmark? Let’s think of it this way. According to ISBA, even a relatively modest pitch comes in at around £30,000 (including production, agency time and management costs). If an agency pitches 29 times a year, that’s an investment of £870,000.
If it loses one in three of those pitches, that’s a wasted investment of £574,000.
So there’s clearly a commercial advantage in outperforming the market – how and to what degree is one critical issue amongst others, as you look towards the New Year.
If you’d like to discuss the results of our survey and/or the particular new business issues your agency faces, then please contact firstname.lastname@example.org