The Art and Science of Selling Agency Services: How to Stop the Churn (Oct. 18)

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Paul Roetzer @paulroetzer

The Art & Science of Selling Agency Services How to Stop the Churn

Founder & CEO, PR 20/20 Author of The Marketing Agency Blueprint

Oct. 18, 2012

“It’s  not  about  who  we  are,  but  what  we,  as  

marke1ng  agencies,  have  the  poten&al  to  be.”  

@PaulRoetzer #AgencyBlueprint

growth is the easy part. retaining it, and making it profitable,

is the real challenge for agencies.

A Cautionary Tale of Churn

@PaulRoetzer #AgencyBlueprint

PR 20/20 New Campaign Clients (2009)

‣ 15 new campaign clients ‣ $195,000 in 2009 revenue ‣ $503,000 in 2010 forecasted revenue

@PaulRoetzer #AgencyBlueprint

life is good!

@PaulRoetzer #AgencyBlueprint

1 client remains

@PaulRoetzer #AgencyBlueprint

avg. client relationship = 11 months

Image Credit: Hollywood_PR

49% of marketers report they will consolidate or change agencies over the next 12 months.

another 15% aren’t sure.

Source: The Chief Marketing (CMO) Council report More Gain, Less Strain.

only 36% of marketers are firmly committed to their agency relationships.

Source: The Chief Marketing (CMO) Council report More Gain, Less Strain.

51% of business leaders reported reducing their agency roster in the past 3 years. 44% say they

will continue to consolidate.

Source: Avidan Strategies Report, via MediaPost

Churn Factors

‣ Over promise and under deliver

‣ Focus on outputs, not outcomes

‣ Talent turnover

‣ Weak processes

agency side

‣ Financial instability

‣ Stretched too thin

‣ Stagnant business model

‣ Siloed services

@PaulRoetzer #AgencyBlueprint

Churn Factors

‣ Unrealistic expectations

‣ Weak foundation

‣ Poor management

‣ Lack of vision

‣ Bad product

‣ Financial instability

client side

‣ Short-term focus

‣ Marketing technology utilization

‣ Conservative business practices

‣ Sales/marketing team strength

‣ Personnel changes

‣ Mergers & acquisitions

@PaulRoetzer #AgencyBlueprint

the cost of bad relationships

‣ Agency resources (people, time, money)

‣ Opportunity lost

‣ Financial pains

‣ Loyal account neglect

‣ Mental health (of employees, leaders)

‣ Employee burnout and turnover

‣ False foundation (The Red Zone)

@PaulRoetzer #AgencyBlueprint

45% of recurring revenue is at risk to churn

The Red Zone

monitor and grade client portfolio health

@PaulRoetzer #AgencyBlueprint

‣ Commit to prospects who value your people, time and energy.

‣ Watch for red flags.

‣ Trust your instinct.

‣ Be willing to walk away.

‣ Take a more sophisticated approach to sales.

Choose the Right Clients

@PaulRoetzer #AgencyBlueprint

make retention the priority.

1) assess strengths and forecast potential.

2) offer integrated services. 3) benchmark performance.

4) connect actions to audiences and KPIs.

1) Success Starts with the Assessment

@PaulRoetzer #AgencyBlueprint

PR 20/20 Inbound Marketing Survey

175+ audits completed

@PaulRoetzer #AgencyBlueprint

challenges with the current process

‣ Time intensive

‣ Requires high-level personnel to analyze

‣ Lacks scoring system and visualizations

‣ Not a true assessment of success potential

‣ Fails to properly set expectations

‣ Not scalable

@PaulRoetzer #AgencyBlueprint

‣ Assess business and marketing strengths.

‣ Forecast potential for success.

‣ Build an integrated marketing strategy.

‣ Connect actions with KPIs and audiences.

‣ Determine talent needs and team structure.

‣ Forecast agency services costs.

‣ Allocate resources — time and money.

A More Intelligent Process & Platform

subjective analysis. assessment scoring. automated recommendations.

@PaulRoetzer #AgencyBlueprint

Net Marketing Score

Every element of an organization, as it relates to marketing, can be divided into: assets, neutrals and escalators.

@PaulRoetzer #AgencyBlueprint

Net Marketing Score

By evaluating and scoring these elements, an organization can devise marketing strategies; allocate the time, money and talent;

and adapt resources and priorities based on performance.

Net Marketing Score: Model

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Net Marketing Score: Model

Marketing Manager Section NMS = 62%

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Net Marketing Score: Model

CEO Section NMS = 38%

@PaulRoetzer #AgencyBlueprint

Business Fundamentals

‣ Business life cycle stage

‣ Competitive advantage

‣ Financial stability

‣ Growth goals

‣ Leadership team

‣ Pricing strategy

‣ Product/service quality

@PaulRoetzer #AgencyBlueprint

Marketing Foundation

‣ Brand awareness

‣ Internal inbound competencies

‣ Lead sources

‣ Marketing/sales integration

‣ Marketing technology utilization

‣ Reach

‣ Website performance

@PaulRoetzer #AgencyBlueprint

www.NetMarketingScore.com

2) Offer Integrated Services

@PaulRoetzer #AgencyBlueprint

Published January 2010

@PaulRoetzer #AgencyBlueprint

Published July 2010

@PaulRoetzer #AgencyBlueprint

80% of chief marketing officers think integrated services will increase in importance over the next five years, according to a

study by The Horn Group and Kelton Research.

however, in the same study, 60% of CMOs indicated that they are unable to find an

integrated firm to meet those needs.

only 9 percent of senior marketers believe traditional ad agencies are doing a good job of evolving and extending

their service capabilities in the digital age. that means 91 percent are not!

Source: The Chief Marketing (CMO) Council report More Gain, Less Strain.

72% of marketers say agencies are “inconsistent and need to improve” when it comes to delivering integrated

communications programs.

Source: Avidan Strategies Report, via MediaPost

“There’s an underlying level of frustration among senior corporate marketers worldwide when it comes to agency

contributions to business value creation, strategic thinking, and digital marketing development.”

— Donovan Neale-May, Executive Director, CMO Council

‣ Search

‣ Social

‣ Content

‣ Web

‣ Mobile

‣ Brand

The New Marketing Services Mix

‣ PR

‣ Digital advertising

‣ Email

‣ Analytics

‣ Tech integration

‣ App development

3) Benchmark Performance

@PaulRoetzer #AgencyBlueprint

Build Custom Scorecards

establish expectations.

@PaulRoetzer #AgencyBlueprint

52% of senior marketers do not have a formal scorecard for rating agency performance on an annual basis.

Source: The Chief Marketing (CMO) Council report More Gain, Less Strain.

71% of clients cited accountability as the main area of frustration with agencies, as CEO and board levels demand

greater marketing ROI effectiveness.

Source: Avidan Strategies Report, via MediaPost

4) Connect Actions to Audiences & KPIs

@PaulRoetzer #AgencyBlueprint

Deliver Results

let performance tell your story.

@PaulRoetzer #AgencyBlueprint

breakups sucks. 4 steps to stop the churn.

@PaulRoetzer #AgencyBlueprint

1) assess strengths and forecast potential.

2) offer integrated services. 3) benchmark performance.

4) connect actions to audiences and KPIs.

Client Services Series: A Year in the Life of a Hypothetical B2B Account

(Live sessions start Oct. 25)

33% off promo code: hubspotwebinar

www.Marke1ngAgencyInsider.com  

•  Session 1: The Marketing Assessment

•  Session 2: The Scorecard

•  Session 3: The GamePlan

•  Session 4: The Honeymoon (Q1)

•  Session 5: The Reality (Q2)

•  Session 6: The Tipping Point (Q3)

•  Session 7: The Renewal (Q4)

paul@pr2020.com PR2020.com

NetMarketingScore.com MarketingAgencyInsider.com

thank you

Paul Roetzer

http://bit.ly/InboundPartner

www.MarketingAgencyInsider.com