Not every one that winds up in the marketing and PR space started there. Take Chris Forhan for example. After college, he spent seven years in capital markets, “trading corporate and high yield bonds for a large regional money manager.”
An interest in digital marketing and technology eventually lead him to a sales gig with Vocus, the former PR software maker that was eventually swallowed up by Cision. From there, he parlayed that experience into helping agencies with sales and business development.
Today, he is a partner and the chief growth officer at Bytelion, near Baltimore. The company provides custom software development and helps companies of all sizes form SaaS startups to enterprise innovation.
I specifically wanted to ask him about sales in the agency world. His comments are a great read whether you are a corporate client looking to hire an agency, or are an agency striving to build sales and BD processes.
Chris is my guest on this 43rd edition of the Off Script Q&A series.
1) You’ve spent a lot of time doing sales and business development (BD) for agencies. How is that line of work different your work in enterprise software sales?
CF: When I was at Vocus selling enterprise software I started having real success once I took a value-based sales approach. That is, I began to focus on client outcomes as opposed to selling on features and price. Whenever you could present a solution that demonstrated a way to grow their business and have demonstrable ROI, you were much more likely to succeed.
As it turns out the agency model of charging a monthly retainer for services is not a far stretch from the SaaS model where companies charge a monthly fee for software as a service. I found that in both worlds, software as a service and the traditional services model, the client must clearly understand how the service is helping them grow as a business, whether that is through traditional ROI or achieving cost efficiency that improves margins.
The moment clients in either space start examining your costs for alternatives it is usually a sign that they are no longer clear on the value or return on investment your services are delivering.
2) What are some things you’ve learned about sales and BD for agencies, that would be useful of other salespeople in professionals’ services to know?
CF: Sales for agencies is a very demanding and competitive space to sell as there are tons of competitors, especially when clients issue an RFP. I’ve come to learn that responding to RFP’s to win new business can be a very costly and time-consuming way to generate new business. Especially when you consider the very low win rate when there are several parties competing for the business.
As a result, I learned to spend a lot more time qualifying, RFPs, justifying if they are worth the time and investment. Agencies get so excited to be invited to an RFP, especially with big recognizable household brands, but they do not always realize that the client issuing the RFP will usually have a shortlist of companies they are considering hiring. Therefore, if you can’t prove that you are on that shortlist, it’s probably not worth your time in proposing.
A much better way to engage and win new business is to create your own opportunities by targeting companies that are an excellent fit for your services and then pitching them creative ideas and solutions, that demonstrate your expertise so that they’ll engage with you on that idea or to help them develop and execute others.
3) How do you think the client-agency relationships have changed in the last 10 years? What’s been the effect of that change on BD?
CF: The days of the “Agency of Record” seem to be numbered. Clients are now able to seek out and manage agency relationships with specialists who fill in the skill gaps that might be present on their own internal teams. Agencies trying to be all things to all people are going to have a hard time keeping up with the specialists such as smaller niche agencies focused on industry vertical or specializing in certain skills such as eCommerce, CRO, PPC, Paid Amazon, etc.
4) When we talked last, you noted you’ve seen the Big 4 consulting firms increasingly get into the agency space to the extent it was affecting even smaller firms. Where have you seen them get involved – and what should agencies do about it?
CF: Yes, especially here in the greater DC metro area we have seen consultants such as Accenture, Booz, and others start to staff very large benches of software development teams, creative teams, data science teams. In the past, the execution of these tasks was often contracted out to partners, which included local and national agencies.
Taking these services in-house the consultants are not only keeping a bigger piece of the pie for themselves, but they are also gobbling up the talent in the marketplace that smaller and large agencies used to depend upon in order to deliver their services. Small agencies cannot keep up with the salaries benefits and stability that these larger consultants can provide which are balanced out by having other very large business lines.
5) The unemployment rate is near record lows. What effect has that had on clients, agencies and process of BD in your view?
CF: I think the demand for talent is outdriving supply and the overall lack of available resources for hire in the marketplace is also putting a strain on the client-side as well. Many clients who would like to make internal hires and can afford are also running into competition from other companies looking to do the same, from agencies and from the big consultants. As a result, they are forced to look external to augment their staff which definitely has benefitted agencies.
In these instances, the agencies are providing them with a resource or a person with a certain skill set that helps the client fill that gap, where in the past the agencies were designing, developing and executing on these campaigns. Again, this is where the specialist or niche agencies are positioning themselves very well to give clients exactly what they want and no more.
6) What do you think clients value the most in agencies?
CF: I think different clients value different things depending on the reason they engage a digital agency. In my experience technology seems to be becoming more commoditized and the value or premium is being placed on creative skills, strategic insights, and prescriptive advice.
Clients, being more outcome-focused seem to just expect the technology to work and seem to have devalued it somewhat. That is technology without a strategy. The premium is being placed on the strategy and insight that goes into technology. Big bets are being made on ways to better use data to engage and personalize. For this reason, strong user experience design is one of the most sought-after skills that clients are seeking from agencies.
7) What value do agencies bring that you think goes under-recognized by clients?
CF: I think the value that agencies bring that might fly under the radar with clients is the cross-industry perspective that agencies can bring. Our smartest and most successful clients want to know what sort of solutions we have built for our clients who are in different industry verticals.
For example, we work with a very large hospital system who is constantly looking to improve efficiency in the hospital with software and applications so that they can increase their profit margins. They literally cannot handle more patients, so they have to look to efficiency for increasing profit margins. On many occasions, they are able to translate innovations made in other industries to their world. Otherwise, they are looking at things from the same lens as everyone else in the healthcare space.
8) Just for fun: in just a word or a phrase, fill in the blank:
- One company with marketing you admire is…(CF) Carvana.
- One business book you’d recommend reading is…(CF) The Challenger Sale.
- One app on your phone you can’t live without is…(CF) StockX.
- One person you recommend following on Twitter is…(CF) @unmarketing (Scott Stratten).
- One publication or blog you read regularly is…(CF) A Sales Guy.
- If you weren’t doing what you do now you’d be…(CF) Golfing.
- If you suddenly got 10% more marketing budget, you’d spend it on…(CF) Clutch.co.
- If you suddenly got 10% more time to spend on marketing, you’d spend it on…(CF) Client case studies and testimonials.
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