Prevailing sales wisdom is clear. Organic growth is the best way to add to the top and bottom lines. McKinsey makes a simple, compelling case right here.
Yet too many agencies and firms invest way more resources in new business pursuits.
I get it. New business is sexy, exciting. It’s where innovation can occur. It attracts new hires. It’s a tangible metric of success.
It’s also necessary where you know the lifecycle of a current client relationship has an expiration date. An agency leader once told me the life expectancy of any new client at his shop is five years. So he needs a constant emphasis on the new business pipeline to ensure he hits targets every year.
I get this too. Churn is normal. Often healthy. Lop off the unprofitable accounts that put a drag on the organization. Replace them with better clients. Spot on.
Maybe You Have the Wrong Clients
If you feel you don’t have enough organic growth opportunities, I’ll bet you’ve taken on clients you never should’ve.
Some agencies and firms are too focused on new business pursuits. They might be pursuing short-term projects that don’t really present long-term, quality growth opportunities.
Does your new business strategy leave you with these sort of clients?
A great brand or corporate name, but a crappy project that doesn’t really prove your long-term value to the client, or show the true of expanse of what you can do.
A great project with great outcomes but with a client who’s too small, too wacky, or too in bed with other providers to give you a real shot at growth.
Both situations could’ve been avoided if you had done a better job of vetting the original opportunity. You didn’t, so now you’re stuck with ungrowable clients and the need to invest more heavily in new business.
Maybe You’re Going About Growth All Wrong
The other thing I see too often are agencies and firms with very growable clients, but without the skills and insights needed to grow them. And, man, that’s sad.
Relationships that started at a high level can easily deteriorate over time if care isn’t given. Here’s a problem that is way too common: Assigned personnel are too focused on getting projects done and not focused on building the relationship. Many causes:
Lack of business acumen or focus
Poor questioning and listening skills
Reactivity favored over proactivity
Lack of strategic insights
No real plan to sustain and grow
Bad ideas and bad solutions, of course, will kill any chances for organic growth with any client. But I don’t think this is the reason for failure to grow all that often. In my experience, ideas are fine. Relationships suck.
And, of course, messed-up relationships will, eventually, lead to poorer solutions and deliverables.
You can guide and train every one of your account teams to avoid all of these causes for failure to grow. And you must. The evidence isn’t up for discussion. If you have the right clients (meaning you’ve avoided the pitfalls above), then you can enjoy the results of organic growth. But only if you’ve invested in that relationship.
- Bob Wiesner