NEW BUSINESS, PR AND THE ECONOMY: THE COST-BENEFIT ANALYSIS OF PURSING NEW BUSINESS
Winning new business in any economy, and especially in this economy, is an urgent and constant necessity for any agency. Of course, servicing existing business should always take precedence over chasing new business, and it should be noted that there is always a cost to pitching, writing proposals and pursuing new business.
It is imperative that agencies take a long hard look on what the potential client is asking of you. In this economic climate, it is easy to see any “New Business” opportunity as something to vigorously pursue; but make no mistake, that ‘pursuit’ can often be costly and an ineffective use of time.
Case in point: While we have signed some great new business recently, have also seen and heard from some really “out there” potential clients, on which we passed.
A few examples:
An entity which asked us to write a very lengthy PowerPoint proposal, to be bound, color collated, 15 copies and presented in person by the whole account team… for a annual $70K budget (We cant spend 10% of an annual budget on the proposal alone)
A call just this morning requesting an RFP… which also went to 20 other agencies from whom they are requesting proposals (but won’t do meetings because of the time required for face to face meetings)
A big brand, which asked for 3 client CEO references prior to disclosing budget or timelines
We respectfully passed on each of these pieces of business, and I believe its also important to say no on new business. Not all new business is good business, and in this economy, I believe there are brands who are taking advantage of agencies.
A good client, and a good prospect is one who is respectful of an agencies time and expenses, and is up front and honest about requirements, budgets, and the process. They are in the majority… but don’t always say yes when asked to pitch, in any business.
Ronn Torossian
May 11th, 2009 at 11:51 am
you read my mind. i agree 100%
July 6th, 2009 at 10:12 pm
Well said, Ronn. We actually just had a prospect ask us to pitch their business, but in the RFP they stipulated that if they weren’t pleased with the first month of business, they were not obligated to pay for that month.
To which we replied: Best of luck in your search!
Crazy times out there. Fortunately, most companies realize that cutting off one’s nose to spite one’s face is not a solid long-term strategy.