Agency New Business Success and Value Pricing
A couple of days ago I saw a very interesting article by a new business agency that looked at the services an agency should sell when new business prospecting, arguing, rightly, that it’s easier to sell fewer services or a specialism – rather than leading with a ‘we do everything’ message, which to most clients is just noise.
When looking at the diagram, which I’ve modified below, I noticed it aligned neatly with another concept which is worth consideration – exploring an agency’s ability to charge by value, not by the hour.
Before diving into out-bound selling tactics, my first recommendation for any agency new business strategy is to work hard on creating a constant in-bound flow of leads and RFPs, which I have always focused on heavily – minimising the reliance on out-bound prospecting.
There are a number of ways to achieve a constant in-bound pipeline, as follows:
- Specialise – a specialist agency or agency with specialisms
- Be Famous – a top tier agency, exciting start-up, vertical specialist or ‘of the moment’ hot shop
- Be Recommended – be brilliant at what you do driving retention and recommendation
- Be Found – Make it easy for clients searching for new agency support to find you; Google, RAR, Creative Brief, Agency Matchmakers, Awards, Press etc.
Back to the point of this post… the fewer services an agency is marketing or the more specialised the offering is, the easier it is to sell, and the more opportunity there is to value price. And, if your new business leads are predominantly in-bound, the easier it is to have a conversation with a client about value charging.
Value charging is a critical part of an agency increasing its profitability. This is not a dirty subject. Sure, agencies have to expect to charge on a time basis for for generic / commodity services that can be bought from anyone, anywhere.
But where there is a true specialism, fame or deep level of expertise charging by value is possible. And, as has always been the way, the fewer the number of messages you’re communicating in your new business activity (services, value messages or points of difference… remember that age old principle that we should NEVER forget in agencies – single-mindedness), the easier it is to stimulate interest from and win a new client. And, maybe more importantly, if you have a well-artciulated and mapped price, product and service framework – it will be a profitable one at that.