Are you wasting time pitching to strangers?
New business pitches are important and expensive investment decisions for an agency. When agencies achieve amazing conversion rates of 70-80% win rates the ROI of their new business investment is phenomenal. Compare that to an agency struggling with a 15-20% conversion rate or lower. Look at the league table each year in Campaign magazine of agency new business conversion rates. It’s certainly not luck.
When agencies I’m working with want to improve their new business success, I ask them to analyse their historic pitch conversion rates. They typically discover their conversion rate is 5-6 times more successful when they pitch to prospects where there is a ‘warm’ relationship versus where the relationship is described by the agency as ‘cold’. Even as a subjective rule of thumb this ratio is too great to ignore. I also ask them to add up their total new business investment (including their time) over the previous 12 months and divide by the number of pitches. This gives them an average cost per pitch (or average investment per pitch). New business pitching is a huge investment for many agencies. Choose wisely where you invest your time and effort.
There’s also an invisible emotional cost of lost new business pitches knocking our confidence.
We do business with people we like. Be likeable, be interested, be interesting, don’t be sycophantic.
We do business with people like us. Find similarities, connections and commonalities.
We do business with people who like us. Like your clients and prospects. Take time to get to know them.
If prospects refuse to let you get close and/or meet with them, then think very carefully before agreeing to pitch.
They don’t want a business relationship with you. They just want a price or your ideas or free thinking or free consultancy, or worst of all, all four.
So should we pitch to strangers?
You conversion rates will be considerably lower.
There’s likely to be less trust in the relationship.
Prospects are less likely to open up to you regarding their true needs.
They are more likely to lie about budgets.
Many clients are risk averse and prefer “the devil they know” – their incumbent agency. They value consistency, predictability and certainty.
What if there is a so called “great opportunity to pitch” where there is no existing relationship between the agency and client company? Ask yourself some ‘investment’ questions before deciding ‘go/no go’.
- ‘Is this an industry or sector we have enormous experience and credibility in?’
- ‘Is the prospect being forthcoming to build a serious relationship with us?’
- ‘How much does the average pitch cost your agency – is this a worthy investment?’
- ‘If it were your money, would you invest it in this pitch?’
- ‘Is your time better spent with other existing clients to grow your business with them?’
If you still decide to go for a pitch to a stranger then find connections and similarities, build trust with senior decision makers, (don’t waste time with junior cold prospects), ask great questions and actively listen. Turn the stranger into a friend.no comments