QuickPost #2: New Business Acquisition 101
Academic Source: Dynamics of Trust Between Clients and Their Advertising Agencies: Advances in Performance Theory, Mark Davies and Melvin Prince
The clients and companies that a communications firm pursues and chooses to do business with are the crux of their business (duh). Without the income paid by clients, communications firms wouldn’t be able to exist, so it’s crucial that communications firms offer a valuable service but also that they carefully select which clients they serve. Most firms have a division solely responsible for this function, which involves identifying prospective clients, pitching those clients the services offered by the firm, and vetting which clients the firm chooses to sign contracts with.
Clients or companies seeking the services of a communications firm will issue a request for proposal (RFP) wherein they describe their unique service needs and firms will submit proposals. In most cases, multiple firms submit proposals to clients and compete against each other in a selective pitching process where the client entertains various offers and ultimately decides on a firm. However, while most firms find themselves competing against other firms for new business, an important part of new business acquisition is choosing the right clients. If a communications agency is going to assume responsibility for representing a client’s image to the media, then the agency have a deep understanding of the prospective client. This due diligence is integral to ethical conduct and the firm’s success because in order to deepen trust and communicate effectively between a client and the client’s audience, the firm must trust that the client will act ethically and that the client company has the proper provisions in place to follow through on their promises. As explained by ex-president of Edelman, Robert Phillips, trust is earned rather than bought.
In Trust Me, PR is Dead, Phillips provides anecdotal evidence through the stories of his experiences as an industry executive that clients with tarnished reputation all too often believe that if they throw enough money at their problems and secure the services of the best communications agencies, they can quickly restore broken trust (Phillips). However, Phillips explains that trust can only properly be restored through a client or company’s actions over time rather than flashy high-budget campaigns. Choosing responsible and ethical clients also contributes to the reinforcement of journalistic integrity. Since communications firm act as the intermediary between a client and the media, the firm is responsible for providing journalists with credible and trustworthy information about the client. If the firm passes along misconstrued, skewed, or biased information to the media on behalf of their client, then the media’s reporting on the client will be inaccurate and the audience will ultimately be negatively impacted by the client/firm relationship. This would also sever the relationship between the firm and journalists which hampers the firm’s ability to communicate productively with journalists in the future. All too often, firms pursue as many clients as they can under the impression that their success is reflected by the extent of their client roster or the amount of revenue they generate. Phillips is an industry veteran that argues this approach is short-sighted and can often lead to a communication firm’s demise.
In Dynamics of Trust Between Clients and Their Advertising Agencies: Advances in Performance Theory, Mark Davies and Melvin Prince examine the relationship of trust between communications agencies and their client. Davies and Prince explain that,” Knowledge of pre-experiential trust sources gives agencies significant advantages, favoring their selection during the account pitching stage and continuing into later relationship stages… [Agencies] need to be aware of their own dysfunctional learning processes that, in turn, can depreciate client perceptions of the agency’s creativity and weaken client trust,” (Davies et al.). Here, Davies and Prince highlight the importance of pre-experiential trust sources, which refers to the ways in which clients can be deemed trustworthy before the agency has had any experiences with the client. In turn, agencies need to be aware of their own practices that can impact a client’s perception of the quality of the service being provided.
In order to refrain from the tendency to take on as much new business as possible, firms ought to rethink their new business acquisition strategies by enacting provisions that vet potential clients to ensure that they have an ethical track record and show a willingness to readjust corporate practices in order to ensure that promises will be followed by actions. Most importantly, the communications firms interested in long-term success must exhibit a willingness to walk away from risky clients despite how much revenue that client may be offering in exchange for the firm’s services. In turn, as explained by Davies and Prince, firms must uphold their end of the bargain and have measures in place to ensure that the client trusts the firm with their reputation and believe that the quality of the firm’s service matches the value being paid to the firm.
If you're interested in becoming a business acquisition expert, these are the reads with my highest recommendation: