Part 5. Failure to demonstrate value
July 13, 2019
We have identified what we believe are the top five reasons most agencies fail at new business and written a guide on how you can start to put in place the right steps to combat them. This is a five-part series that we will release over the next couple of months, which includes:
- Failure to differentiate, stand out and target a specific audience
- Agency owners think they can fully outsource or delegate new business
- Lack of patience and consistency
- Little knowledge or experience in sales
- Failure to demonstrate value
We are all aware of the unanswerable question in our industry… what is the price of creativity? But, before I get into more practical steps you can be taking to demonstrate your value, I have to rant about the fact that as an industry we charge on a time / revenue model and therefore there is no incentive for the service provider to be innovative or be efficient as the billing is based on the hours put in. Agencies are actually penalised for solving problems faster and clients often end up receiving work slower as agencies ensure all their billable hours are accounted for! There are also issues around ROI, transparency, the involvement of procurement etc. but like Brexit, I can spend all day moaning and it’s not going to do diddly squat. As agencies, it is down to you to make the required changes and educate the buyers.
- My first simple approach is to stop agencies talking purely about the services they offer. By focusing purely on what you do, buyers see you as a production company and as such will compare the price of your services to other agency and choose the cheapest option. You’re a commodity. You will struggle to win larger accounts and projects because you’re not seen as strategic or creative and you will attract a more mid-level buyer looking to execute on a concise brief. This is a perfectly fine business model and to compete you will need to deliver more, cheaper and quicker and there is always going to be a demand for this. However, many agencies get themselves in this trap and want to create more interesting work with a freer license and also want to raise their prices. Operating on a service-level will prohibit you from doing this. No matter what route you choose to go down, you must still list the services you offer so people know your capabilities; you just might not want to lead with it.
An alternative option is to lead with ‘the challenges you solve’ or the value and solutions you bring to a business on a macro level. Often when buyers are looking for agency support, they don’t know the services they need; some don’t even know the right problem to solve. Therefore, by leading your positioning this way will help educate them and open up the opportunity for you and them. It will also help you connect with a more senior stakeholder who will have more purchasing power and budget control. More junior buyers will be tasked with looking for a video or SEO agency for a small project and have a set budget, whereas someone higher up in the organisation will be thinking about business challenges and will have more of an open mind when it comes to how they solve those challenges and the budget required to get the job done properly. One way to discover the challenges you solve is by going through your case studies and note down about all the business problems you helped resolved either directly or indirectly as a result of your work.
- Focus on results and outcomes. Buyers can often spend their time staring at the big scary price you have quoted them as opposed to the wonderful outcome at the end of the journey. In the world of sales, it’s your job to get them to only think about this outcome. If they truly believe in you, then the cost will become insignificant in the grand scheme of things. There are obvious tools you have at your disposal like case studies and testimonials but it’s so important that you stick to your guns and believe in your own value. Often discounting and price incentives can cheapen your quality in the eyes of the buyer and it also portrays a weakness in the sales process. There are often ways here you can offer something that will be perceived as more value rather than dropping your price.
- Confidence is attractive and I’m sure you’ve all had or heard of times when agencies are willing to walk away from a job and then suddenly the buyer comes back pleading. Sales is often about the power dynamic, which is something you can control from the moment a prospect gets in touch, to the close. Many only think about the negotiation at the end of the sales process but you have the power to set the boundaries of engagement out much earlier. There is no point going in all bullish in a negotiation when you have bent over backwards to accommodate the client every step of the way. Think of it like a dual, where you are testing each other out. Or better still, use the dating analogy. The keener you appear, the more willing you are, the more desperate you look and the more ground you retreat, constantly weakening your position. Stand your ground from the get-go and you’ll be able to dictate the terms. This is not about being aggressive and difficult, this is about respecting and valuing your agency and starting the relationship with the right balance.
- The last point I will make is about the proposal that goes over to the prospect and how this gets presented. It’s not just what you say, it’s how you say it. Your attention to detail, demonstrating how much you listened and how tailored your proposal is; all dictate something about your value and the type of partner you are presenting yourself as. Proposals and pitches demonstrate how seriously you are taking the opportunity. Buyers like to feel special and that they are the only one in the world that matters, and I have seen agencies go above and beyond to demonstrate this. You also have an opportunity to reinforce your brand message, convince them of your value and win their hearts and minds over. It is not simply a case of presenting your process and costs as this will take you back down the commoditised route again. Every touchpoint and interaction in the sales process is so important to the buyer and they will be making conscious and unconscious decisions at every step. It only takes one unknowing receptionist or a typo to unravel all your hard work.
Hopefully you can use some of these practical steps to improve your own sales process, maintain your value and convince buyers of it. Putting in place a process and checklist may help you to manage this better at each stage.
For more information on how we can support you, please book in a free 90-minute workshop.