This paper will be looking at the challenges that marketing services agencies face in terms of retaining an effective workforce to generate new business. It looks at staff retention rates, costs of staff turnover and the key factors needed to develop effective new business staff. There will be a follow up article next week looking at demographics within the role and average salaries for new business staff. You may find these blogs interesting as a tool for benchmarking or to see if there is any way to improve productivity within your own agency.
A few years ago, a study by PricewaterhouseCoopers revealed that staff turnover cost UK industry a staggering £42billion a year. This was based on an average salary of £25,000 per year plus costs incurred from lost productivity, training and recruiting new staff. This piece of research showed that an average of 10.4% of staff had resigned from their position in the previous year. More recently, research from monster.co.uk put the average turnover rate at approximately 15% a year.
Unsurprisingly, this varies drastically between industries. The highest levels of turnover are found in private sector organisations in retailing, catering, call centres, construction and media. Turnover levels also vary from region to region with the highest rates found where unemployment is lowest.
The staff turnover figures for business development and telemarketing roles will undoubtedly be higher than average – particularly in an area such as London. The reasons for this include the sheer number of businesses in the area, the easy accessibility of workplaces by public transport, the opportunities that will be constantly arising at other organisations, etc. On top of this, a company paying sales staff a lower basic wage with a commission structure is less exposed in the event that the sales person does not reach a given target as it is relatively easy to sack them for under-delivery.
Looking specifically at staff turnover in agency new business roles, our own findings suggest that the average New Business Manager working in an agency will stay in that role for around 18 months. We know this from anecdotal evidence gathered from years of talking to agency owners and directors who struggle to keep good New Business professionals. Part of the reason for this is that Business Development Managers who win clients often end up managing and developing these accounts at the cost of being on the phone to generate fresh new business opportunities.
However, analysing the data of staff turnover within our own company over the last 5 years, the average amount of time a New Business Manager stays with Alchemis is 41 months, so almost 3 and a half years.
The net effect of this is increased productivity. However good a new team member is, our statistics show that someone doing new business calling that has been in the role for 2 years, for example, will always have a higher average conversion rate for setting quality meetings than someone who has been in the company for 6 months. You build up knowledge and technique, develop your skills, receive coaching and it goes without saying that the more experience you gain within the company, the more successful you will be at identifying and closing genuine new business opportunities.
Key Factors for a Successful New Business Team
So, how does an agency develop and retain an effective new business person?
Let’s start off with a simple statement, “Happy people sell”.
Anyone who has seen the BBC
comedy documentary – “The Call Centre” will probably be familiar with the above sound bite as it has been used excessively to promote the programme.
Now, whilst most of you reading this won’t be working in a business development environment that is anything like the one featured in The Call Centre, I suspect the majority of you will concur with the “Happy people sell” message.
If we consider B2B rather than B2C marketing, business development is often very far removed from the stereotypical image of a call centre, particularly in the world of Marketing agencies. However, the initial seeds have to be sown somewhere. Most effectively, for reasons outlined here, this will begin with a targeted cold call to a prospective customer. We all know that first impressions count, so if the prospect you are calling is potentially high value to your business why would you want to risk an unprofessional approach?
There are various factors to consider in terms of staffing a business development team, or in the case of smaller agencies, a single Business Development Manager. I have listed eight key areas below (in no particular order), which although not necessarily covering every aspect of the role, are certainly the absolute minimum requirements for a successful new business team. All of these areas are interlinked and interdependent on at least one of the other factors.
- Good phone manner
- Tools for the job
- Rewards and incentives
Making new business calls all day can be a daunting job. The initial challenge to actually speak to a decision maker rather than a gatekeeper is difficult enough. Broadly speaking, on a B2B campaign targeting decision makers at managerial and director level within companies that will have a significant budget to be deemed “worthwhile”, a New Business Manager is likely to have an access rate of around 12-15%. So, for every 100 calls made, only 12-15 will actually result in a conversation with somebody in a position to have any authority to progress the approach further. From the employee’s point of view, they will need to be focused and energised – not to mention having a thick skin and an incredibly high level of tenacity and patience when attempting to contact high level decision makers. It is essential they keep up momentum and target people sensibly increasing their chances of a decent conversation with a potential buyer. For example, there’s no point calling up the Communications Director of an aircraft manufacturer if all your client work to date has been packaging design for FMCG brands. It also makes sense to maximise the amount of calls you are making between 9am and 12.30 and 2pm to 5pm, as that is when it is most likely somebody will be at their desk. General admin work should be done outside these times, as much as possible.
From an employer’s point of view, it is essential they provide the right working environment to keep staff motivated during the day, with adequate support, resources, incentives and a flexibility to adapt as necessary if staff have genuinely good ideas to improve the working environment. Clear targets and good two-way communication channels between employees and management are equally vital to maintain high levels of productivity within a team.
I have talked about this before in a previous blog, but one of the key things any good sales person will have learnt very early in their career is to listen. Only if your business development person is skilled in the art of listening will they be able to truly identify the prospect’s needs. How will what you are offering benefit the prospect? Is it even relevant to the prospect? Basic sales techniques include engaging the prospect with open ended questions (how, why, what, etc.) so that it is harder for the prospect to close down the caller with a yes or no answer. A New Business Manager needs to sound professional, clear and knowledgeable when talking. A successful business developer will also be very good at objection handling. They will also know that it is counter-productive to set a new business meeting that has not been thoroughly qualified.
Ability will be linked to approach, experience and the tools and resources available to the new business manager.
From the employer’s point of view it makes good sense to run an on-going training and development program to bring out the full potential of their sales team abilities.
This is a two-way street. You can’t expect an employee to act with loyalty and commitment to your company if you don’t show the same loyalty back to your staff. Remember, “Happy people sell”. As an employer you will not be able to please all the people all the time. There will be occasions where you need to let staff go or discipline them for other reasons. Inevitably you will also experience the odd “problem” employee in your time, no matter how tight your screening program is or how all-encompassing your office environment is.
With all this in mind, company policies need to be seen to be transparent and fair for all employees. Most people need to feel job security. Employers should be familiar with Maslow’s Hierarchy of Needs.
Employers need to accept that whilst they are in business to make money, their employees are too – and even more this is true with sales staff. Bonus structures and targets should be clear and fair.
As a company, we are fully aware that our employees are far and away our single best asset – they need to be treated as such. It is inevitable that people do move on, no matter how nice their working environment is. Not every company is in a position to offer infinite salary rises or bonuses to good sales staff, no matter how talented they are. The wily employer will develop and extract the best out of their new business team, but they will also be pragmatic about staff moving on. If an employee feels they have been treated very well by a company, they will often give fair warning of their intentions to take the next leap forward over and above the standard one month notice period, allowing the employer to plan accordingly.
Like loyalty, this is a two-way street – if the company owners don’t operate with integrity then the employee may mirror this. Too often, sales people may be tarred with same the brush as a “time share tout” as a misconception by the prospect they are calling. But this can be true in any industry and is certainly not exclusive to marketing services agencies. This is also why an intelligent, targeted, professional approach is essential. An employee will soon identify if they are working at a company that is only interested in generating money from a new customer with no foresight into developing a long term business relationship. To quote a line from Glengarry Glen Ross “You don’t sell a guy one car, you sell him five cars over 15 years”.
In the long run, employing new business people who act without integrity in terms of sales will damage your company’s reputation.
5. Experience and knowledge
Everybody has to learn the ropes somewhere. From the Alchemis perspective, all our recruits will have several years’ experience in a sales background of some description, such as media sales, recruitment, software systems etc. Whilst it is not always vital to understand all of the technical details of the product or service being sold (for example, how many New Business Managers at an e-commerce agency could design a functioning site?), it is essential that they understand the offer. What exactly is it that their company does, how will it be of benefit the prospect and what examples can they give to demonstrate this?
Business development requires many more skills than the first steps of making cold calls. Cultivating a relationship with a client or prospective client over a period of time requires intelligence, forward planning and a good understanding of changing trends and needs across the industry and economy. The more experience a new business professional has in a company, the more he or she should be aware of the challenges and latest developments facing their market.
A good employer will be aware of how valuable experience is when gained within a company. Motivation and fresh incentives by management need to be happening as an on-going process to prevent staff becoming jaded or burnt out. It is inevitable that every company will lose their best, most experienced staff at some point. But if you can maximise the length of time they stay (whilst remaining truly productive), you will reap the benefits.
6. Telephone manner
A bad first impression can be extremely difficult to undo. A caller will usually have about 15 seconds to engage the prospective customer and gain his interest (selling on the telephone is totally different to selling face to face). Nobody can see the nuances when you are making a call. The only tools you have are your voice, your ears and the reason that the product or service you are selling would be beneficial to the prospect you are calling. It is absolutely essential that you make this count in the first few sentences of a call.
This also links in directly to intelligent planning – make sure you are targeting the right kind of people. Employers should be investing in buying good data (a challenge in itself) and the technology to enable the new business team to manage their calling most efficiently. On top of this, an on-going staff development program teaching things like effective sales techniques, listening for buying signals and other areas of psychology is always useful.
7. Tools for the job
This is the one area where the focus is mainly on the employer rather than the employee. You wouldn’t build a house without the right mix of bricks, mortar, sand, cement, etc. so why would you ask your new business team to do their job without the necessary equipment. Aside from a working phone and PC, an effective contact management system is an absolute must. And let’s not forget that it’s all very well having a whistles and bells system, but any database is only as good as the information that it holds and that can be easily extracted. Previous blogs of mine refer to the fact that data deteriorates at a rate of around 30% each year (maybe that could also give you an idea of the rate of staff turnover within the marketing industry) so it is vital that any of your callers capturing useful information log it and store it in a useful way. Where there are gaps, data should be bought (from a decent list broker offering some sort of accuracy rate guarantee) or in some cases it may be necessary to undertake bespoke research to populate your database.
Having a good database/contact management system along with accurate, up to date information on the decision makers within it will increase productivity exponentially as opposed to a new business manager working off a spreadsheet for example. And before you say “what kind of company would work that way in this day and age?” I can tell you that it does still happen. If you are a smaller operation and don’t have the money to develop your own in-house system, you could always subscribe to one of the decent online contact management systems that are relevant to your industry. The cost of these can be as little as a few thousand pounds a year and the benefit will save you way more than that.
8. Rewards and incentives
The most obvious way that agencies reward new business staff will be with a regular performance related bonus on top of their basic salary. Going back to Maslow’s Hierarchy of Needs, there should always be a clear structure for this. If an employee feels that the employer is moving the goalposts without a clear and fair reason why, morale will sink and staff will be more inclined to leave.
One method used internally within our own company is a bonus calculator which allows the New Business Manager to accurately work out their bonus on an on-going basis. Clear deliverables and targets are displayed against real-time results allowing the new business manager to see what is being and what can be achieved, thus increasing productivity. This is not just a simple matter of numbers though – a new business meeting needs to meet quality criteria approved by the client. If it does not, this will not be included in the bonus. This encourages careful client management by business development staff and discourages the temptation to set meetings simply to boost numbers. It would be counter-productive to the new business manager.
Whilst healthy competition between sales staff should be encouraged it is also very important to have good camaraderie among the team. A team who support and encourage each other and are all pulling in the same direction should be greater than the sum of its parts. Frequent team building and team bonding sessions and ad-hoc incentives all contribute to this.
In my next post I will be looking at pay scales and demographics within the role of business development.
If you would like to find out more about how Alchemis can help your existing new business team generate more opportunities, or act as an outsourced new business department, please get in touch.