Ahead of our 31 August Auckland DA Workshop: ‘Keeping the pipeline filled: sales for creatives‘, our workshop facilitator – Sarah Ritchie – shares valuable intelligence on appreciating the real cost of new business development. Sarah has spent 25 years in design and advertising account management, which included 10 years running her own, successful graphic design business. These days Sarah works for 3rdeye Consulting and specialises in strengthening the client/agency relationship. She is also the author of the award-winning 2018 book ‘How to Wrestle an Octopus: an agency account manager’s guide to pretty much everything‘, and her new book ‘How to Tango with a Tiger: a marketer’s guide to working with creative communications agencies’ (publication date September 2019).
For more information visit www.am-insider.com
The cost of acquiring new clients
It’s a well-known fact that it will cost you less (money, time, effort) to maximise the revenue out of an existing client than to find a new client. They say that it can cost five times as much to attract a new client than it does to keep an existing one. Therefore, the first rule of running any design business is to work on retaining your clients and building loyal, long-term relationships to encourage client satisfaction and repeat business.
However, a wise studio owner or self-employed designer also knows that client loyalty can be tenuous, and there is no guarantee of repeat or regular business from any one client. Therefore, anyone with responsibility for ‘business development’ and ‘new business development (especially those who have to ‘eat what they kill’ or ‘keep the pipeline filled’) will understand the importance of having a client acquisition plan in place, and find the balance between acquisition and retention activities.
It’s no surprise that most designers hate the notion of ‘sales’ and selling. Along with invoicing, the process of acquiring new clients is probably a Creative’s least favourite task. A Creative’s new client acquisition plan will usually include one or more of the following tactics – all of which are removed from personal involvement and having to face potential rejection:
What a Creative’s typical acquisition plan (most likely) does NOT include is cold calling. The notion of picking up the phone and making contact with a stranger (who may reject their proposition) is enough to cause anyone to shake in their shoes. The irony in the situation is that cold calling will be the most effective tool in your new business development efforts; no other tactic will garner such immediate and pre-qualified results. Remember – no pain, no gain.
It’s important to remember that finding new, shiny clients – especially via cold calling – will come at a cost for you (in actual time) and your studio (in chargeable time). So, how much will the hunt for new clients cost you? Let’s do some calculations:
Increasing revenue from NEW business
Example: you aim to source 50% of your annual revenue target from new business.
From existing client business
Example: using the scenario above, repeat these calculations for getting 50% of your revenue target from existing clients.
What you can learn from these figures
Is cold calling worthwhile?
The short answer is “yes”. If your remit is to significantly increase your company‘s revenue, then a focus on sales (which will most likely include an element of cold calling) needs to become part of your tactical plan. You need to focus your efforts where the best investment of your time will be; the cost of acquisition of new clients; and the amount of return that you think you would get (per year) if you did secure a new client. Time is money, so all your efforts have to be worthwhile.
Remember, the alternative to not picking up the phone might be that you lose your job or your company goes out of business. Is that thought worth a little (potentially scary) cold calling? You betcha!
August 31 @ 9:00 am – 1:00 pm
Saturday 31 August 2019
9am – 12.30pm
Studio One Toi Tū
1 Ponsonby Road
$300 +GST Professional / $200 +GST Design Assembly Friend / $50 +GST DA Student Friends
(Not a DA Friend? Details on how to sign up can be found here).