The ad agency sales cycle

The ad agency sales cycle

Agency business development is a long game, unfortunately. The average client-agency relationship is about two and a half years. The average CMO tenure is between three and four years. Marketing budgets typically run for 12 months. When an agency targets clients who value the AOR model or brands with a history of long agency relationships, it can expect a long road ahead. That’s not to say there aren’t exceptions; however, agencies who need or expect fast results will likely be disappointed.

If an agency is looking at project work, the sales cycle will be much shorter. Projects are an excellent way to build trust and confidence that could become a more extended relationship with a consistent flow of work. Sometimes when you expect a flow of project work, it turns out to be a one-time event, making the agency’s investment of time and resources harder to pay off. If your service offering is typically a smaller scope of work or cost, it will have to be a shorter sales cycle and require a higher sales volume. A well-balanced diet of projects and retainer relationships gives an agency the security and flexibility to pursue its goals.

In my experience, most agencies prefer long-term client relationships even though the trends show that those are declining. More marketers are adopting a short-term perspective because of market and economic uncertainty, C-suite impatience, and declining ad performance, resulting in shorter projects and less or no commitment to future business. The pressures on speed and cost drive the magic of creativity, innovation, and differentiation out of the equation, and the result shows in performance. And AI is the rocket fuel for the decline. As this trend continues, the industry will be forever changed. 

Over the last many years, I’ve been doing business development at and for a wide variety of agencies, small and large, generalists and specialists, full and limited services, generating millions of dollars in agency services revenue. While working with a variety of different kinds of agencies, I’ve had to work within the sales cycle and learned a lot. I continue to learn as the marketplace and marketers evolve, including the commoditization mentioned above, and apply that learning to my approach and my processes. One framework has proven to be helpful in the development and execution of more effective new business strategies.

I’ve previously written about the Prospect Opportunity Timeline (see The Prospect Opportunity Timeline), and my client engagements have proven its efficacy. My research is all fieldwork, but others have done formal studies and analysis that speaks to the same. In B2B sales, such as ad agency services, copiers, or hydraulic pumps, when you look at the potential universe of buyers, there are time-based behavioral segments that should guide the sales process. Unfortunately, too many agencies and salespeople work from a one-size-fits-all approach and suffer from the results.

The Prospect Opportunity Timeline considers the sales cycle and buyer journey as defined by its timeline and buyer behavior. When you think about the buyer journey, it begins with a need, then research on solutions and the companies that offer the best; it continues with internal socialization, needs assessments, chemistry meetings, an RFI, a short list, an RFP, selection, negotiation, and award. Each step takes time, some more than others, particularly the beginning stage. When you overlay the buyer’s journey on your prospecting calendar, you can see how your prospecting activity aligns with that journey or does not. And considering buyer behavior, where 60% of a buyer’s journey is completed before they contact any agencies, you can understand why no one is responding. (see The anatomy of a win)

Long story short, research suggests that only 3% – 5% of your prospects are ready to consider your agency right now. The rest are somewhere in the process or not at all. When an agency does cold prospecting, regardless of how well conceived, clever, or entertaining, it may only reach or be meaningful to that 5%. The rest aren’t paying attention because their time has not come. It would be ideal to know what stage a prospect is in so messaging could better speak to their needs and interests. If your prospect is in the 5%, they want to know about services, cost, results, time to market, and more tactical things. If they aren’t, they will be more interested in innovation, vision, thought leadership, clever ideas, breakthrough strategies, and more conceptual thinking. Across a prospect list, your contacts will be somewhere across the journey with different needs and interests. 

There are tools that collect intent signals like a sudden increase in search activity around a particular subject, like retail media or Metaverse strategies. (see Are you using intent data) Other events, such as a new CMO or CEO hire, typically mean the company will be changing its marketing strategy, ad strategy, and agency. Also, there are time-based events like a new budget year or product launch seasons. Winmo is a great resource for tracking trigger events like all of these. And let’s not forget networking to collect gossip and speculation about a brand or marketer’s intent and actions. When a marketer wants to be stealthy about their agency intentions, this kind of detective work helps to understand her intent and know how to capitalize on it. 

Considering this prospecting dynamic, I execute a multilevel outreach program that broadly reaches across the segments I target to cast a wide net that can engage those in the 3% – 5% group. They will raise their hand if they want to buy and like what I’m selling. For those who aren’t ready, this broad outreach will also attempt to get a response such as, check back next year, or we just hired a new agency, or we are contracted through June. I’ll put this feedback on the calendar and develop an individual outreach strategy for each based on their time frame. But that isn’t to reach out in June. That is a campaign that leads up to June. I want to be on their list before June, if not at the top.

The challenge, as I’m sure you’ve picked up on, is how to speak to the needs of the different buyer mindsets within your list; I need it now, I need something someday, or I’m too busy to pay attention. Of course, I’m oversimplifying for brevity since the reality of business development has so many variables and nuances. The nature of an email, InMail, or phone call can allow for strategic messages that speak to different mindsets within your list. It comes down to a well-crafted messaging platform that can be interpreted as a sales message if the reader wants it to be. I’ll talk more about crafting the right messages in a later post.

Circling back to the Prospect Opportunity Timeline, it is a helpful tool for new business planning, and suggest you give it a try as you think about your 2024 plans. Take the time to plot your buyer’s journey, whether you target projects or relationships, no matter the service. Think about each step and the kind of information that your prospect seeks so you can craft messaging, content, collateral, or whatever you use to build awareness and motivate engagement. The more data-informed, personalized, and intent-driven you are, the better your results will be.

As always, I’m here if you need help.

Happy Prospecting.

If you need help planning your new business strategy for 2024, or your success rate is declining, or perhaps you are wondering what the best resource is to improve your business development process, I can help. Schedule a call. I would gladly discuss what I have learned from years of experience and hundreds of agencies, including leading business development at a variety of firms. I have a good sense of how it might apply to your circumstances.

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