Do You Even Need New Business People?

Blair runs through one of his constraint driven exercises with David by having us imagine running our business with nobody dedicated to the various functions under the banner of new business.

Transcript

David: All right. Blair, before I turn you loose on this topic, I want to reminisce. One of my favorite events that we did together was called Revenue 2.0. One of the things I loved about it-- we did it twice, I think, was the constraint thing that you did. I remember you asking everybody, okay, imagine that you could only sell subscriptions or imagine that you could never sell your firm, so you've got to fix whatever it is that you don't like about it. Anyway, that was really fun. I think you're going to pose a tough question for me, but let me just set the stage for what we're talking about today. The topic is "Do You Even Need New Business People?"

Blair: This is me going out of business.

David: You even need a win without pitching firm to consult with? When I heard that question that you wanted to talk about this, all this stuff came in my mind, and I just pictured the many times where my clients have asked me this question, "I need to hire a new business person. Can I talk about that?"

Before I even know any more about it, I think, oh, my God, they want some magic referral, somebody that I know that's looking for work, or they want some magic commission structure that just will make everything perfect, or, and this is most likely, five months into this arrangement, they're going to start having some doubt, but there's a sunk cost here. 9 months in, they'll know they made a mistake; 17 months in, they'll fire the person and then they won't learn from it. They will blame it on hiring the wrong person.

Blair: Yes, exactly. Do you remember the nickname for this position?

David: Oh, no.

Blair: Rainmaker.

David: Oh, rainmaker. Yes, yes.

Blair: That headline, "Rainmaker Wanted." I used to look at those ads, agencies looking for a rainmaker. It's like, yes, rainmakers, these are fictitious people. These are like brain-dancing voodoo witch doctors. Isn't there's some irony in there?

David: That's true.

Blair: It's like we're looking for somebody with supernatural abilities to overcome the fact that we are poorly positioned, don't have a new business plan, et cetera, et cetera.

David: All right. What's this constraint thing you're trying to make me uncomfortable with?

Blair: I thought, well, let's approach it from this point of view. You can play the role of the agency principal, and all of our listeners can follow along, and try on this question. Constraint-driven exercises, as you've alluded to, we've done a bunch. The two times we did Revenue 2.0. They're really powerful. We use them a lot in training. I give you a constraint and I say, "Imagine running your business under this constraint?" Your first reaction is always, "Oh, I couldn't do that." Then your second reaction, which usually only takes a few seconds, is, "Oh, I can see how I could do that, but it wouldn't be good."

Then your third reaction after you've thought about it for just a few minutes is, "Oh, wait a minute. I can now see ways in which this constraint might actually be beneficial." That's the value of a constraint-driven exercise. It forces some creative thinking. The constraint that I want you to try on is, imagine running your firm with no new business people, with nobody dedicated to the new business function or the various functions that fall under the banner of new business.

David: Oh, man, I'm feeling a lot of pressure here. The first thing I'm going to miss is, who can I blame if this doesn't work out?

Blair: The one throat to choke.

David: Yes, right.

Blair: Which if you look at new business people, and God bless all the exceptions to this, but you look at a lot of them, you look at their resumes, a lot of them look like fugitives from justice. They're at an agency between one and two years, then they move on. Why is that? It's because of what we talked about at the top. The owner of the business is looking for somebody with some sort of magic superpower and they realize, "Oh, this isn't it." They go hire somebody else. Maybe that person who's filling the position is putting forward a story of magic superpowers. Maybe they're coming from an agency where the new business success was a result of many other factors, not just the strength of one individual.

David: Yes. All right. Let me try this on. My firm is going to have to be really famous for something if I'm not going to have a new business person, so famous that people are going to hear about me and want to work with me, or maybe I have some data-driven tool access to that that other people don't have, or maybe I'm really good at it. I guess that's always an option. That means I'm going to have to free up my time from all this other muckety muck stuff so that I can focus on it. Are those the things you're looking for?

Blair: Yes. First of all, let's start with the firm being famous. Maybe it's a generalist creative firm that's the hot shop of the day that's famous for being creative. We've talked about these types of firms recently, but more likely, it's because you're specialized in either a discipline, a market, or a combination of the two and you've done the hard work of building a reputation. You're driving inbound inquiries to you, to the firm, with what we call the flip. We've talked about this in previous episodes already having happened.

The flip is the moment in time when you move in the mind of the client, or prospective client, you move from this position of vendor with very little power in the buys-sell relationship to this position of the expert where you have some power in the buys-sell relationship. You're doing something through a combination of positioning and marketing usually to drive these inbound inquiries because as you said, you're seen as famous for whatever reason, solving certain types of problems or certain skill sets. Those inquiries are less likely to be competitive. They're less likely to be pitch based, they're less likely to be driven by a competitive RFP. Still a whole bunch of other factors that we haven't talked about.

David: Maybe I do an event like our friends that do the cult gathering. I do an event of hundreds of people that want to come and network with other folks that are running cult-worthy brands, and that sets up comfortable conversations and I don't have to get on the phone and call them. We just have a comfortable conversation because they want to come to my event. I can think of all ways to solve this.

Blair: Yes.

David: Do we even need a new business person? We know how we're going to answer this. The way you would answer this, is it different now than you might have answered this 20 years ago because something's changed in this world that makes it more reasonable that we don't necessarily need somebody now but we might have needed somebody in the past?

Blair: Yes, that's a really good question, and the answer is yes. What's changed is the degree to which agencies are specialized. I continue to think of the market today in mid-2023 as pretty fully bifurcated, where you have the generalist undifferentiated, mostly ad agencies on one size, so large ad agencies, and then you have the small specialist firms on the other side.

As more time goes by, these businesses are increasingly different. Different business models, different cultures, different dynamics in the sale, different pricing dynamics, et cetera. Just jumping ahead a little bit. If you're an owner or a leader of an undifferentiated ad agency, the likelihood of you getting away from dedicated new business people is probably pretty low because you don't have a lot of power in the marketplace because of the lack of differentiation. Most of your sales conversations are in competitive environments, tend to be pitch-based, tend to be RFP based. The client is calling all of the shots in terms of how your services are bought and sold.

If you're a specialist firm, you're probably not describing your discipline as advertising. It's probably marketing or communication or some other discipline. It's probably a combination of design, software engineering, and consulting. Your clients, when they're looking for the services that you offer don't tend to go to a pitch not as readily. Because you've seen is meaningfully different, you've done the positioning work, things tend to be more conversational-based.

Now it's these firms where the opportunities to get to not have to staff a single dedicated position, that makes this more possible. 20 years ago if we'd had this conversation, maybe a 10-person ad agency, a really small firm trying to get and look big, maybe they're below the threshold where they don't need a dedicated new business person. The first agency I worked in, I was an account manager. I was given new business responsibility. Nobody had it, no single person had it before me, but I still had account management responsibilities.

David: Yes. You filled your dance card dutifully, and then once you did, you were busy serving those clients and didn't have time to go out and do new business again, right?

Blair: Yes.

David: I don't know if this is accurate or not, but you could rephrase this and say, maybe you need a new business person, but don't hire a new business person to solve a positioning problem. That's a banner over what you were just explaining earlier. Because the world is so much more specialized, it's like the line between marketing and sales or lead generation and sales has moved as well, right?

Blair: Yes. It's funny talking about a world before internet search because, what is it? 20 years now? In the pre-internet search era, a new business person was primarily responsible for lead generation. Then as the tools of search get better and buyers can more readily find specialist expert firms that they might engage, they don't have to put up with conversations with salespeople. That lead generation function has moved away from sales to marketing.

It's almost funny to think about it, but there used to be a time when sales reps held all of this marketplace information. Even if a buyer didn't want to buy from a salesperson, they were interested in having the conversation because the sales rep would tell them what else they're seeing in the marketplace. I remember those days. I remember being in an ad agency talking to the print reps, getting information on what the other agencies were doing, and some of those print reps became valuable resources to me.

David: I remember them. Yes, absolutely. This was right before all those printers decided to establish creative departments too because they figured if we could get upstream, then maybe we'll get more of the printing work. We need to take work away and it became competitive.

Can I take this in a slightly different direction and just get your thoughts on this? Let's go back to the conversation where a principal calls you up in this case, not me, and says, "Hey, I want to talk with you about a new business person I want to hire. I want to get some ideas from you." What if one of the first questions you asked them was, "Well, what do you want this person to do?"

Blair: That is the first question.

David: Oh, it is?

Blair: Yes.

David: What do you want them to do? Maybe it's not a bad idea, maybe it's not a good idea. It depends on, what are they going to do for you?

Blair: This is where the answer differs from firm to firm, not just the two sides of the bifurcated market, but in specialist firms. There's some verticals where you're looking for a new business person to do something a little bit different. There are some verticals that are really relationship based, where you really do want the old school Rolodex-driven salesperson where you would hire somebody because they know a lot of people in this space.

David: Entertainment.

Blair: Yes, entertainment's one. They have a good reputation and they're going to get the meetings and they're going to get some business, but that's rare. If somebody says to me, "I need to hire a new business person," I want to find out, well, what's the problem that you're trying to solve? If it's lead generation, is a salesperson really the person for this firm to be generating leads, or should they be, like most of the rest of the world, not all of it, but most of it, should they be re-imagining that lead generation function as something that resides in marketing? Should you be creating content, putting it out there into the right channels in the world where your audience exists and driving those inbound inquiries?

Firms hire a person to manage the marketing all the time. They don't call it the new business person, but it's effectively-- New business is really code for sales, marketing, public relations, networking, everything we do under this broad banner we call new business to generate new clients.

David: If you want to hire a new business person and you think this is about lead generation, my guess is that that same person is probably not going to be the right person to help prospects through a content program because it's going to be infused with sales. It's going to require a lot more patience than normal. I guess there are people that probably-- I haven't met them, but there probably are people that could do both, but if you're hiring somebody to be sales in a classic sense, that's probably not the person you want to have in charge of your content program, right?

Blair: Right. You think about in a typical firm, who's creating the content? It's usually the senior subject matter experts. I haven't studied this, maybe you have, but I think just observationally, the most successful firms and the ones that are most successful at driving inbound inquiries to them with the flip already happened, it's usually the owner of the firm that is the person who is great at generating content.

I'm sure you've seen lots of firms where they're trying to spread the content creation responsibility across multiple people, and at the end of the day, there are a small number of people who will make the time. Their priorities are elsewhere. You alluded to this earlier. Your priority is to serve the existing client. It's really a small percentage of those senior subject matter experts that are actually able to carve out the time to create content, B, are good at it, and C, enjoy doing it. I think that model where we're creating content, pushing it out into the world, driving inbound inquiries, that is most successful when the owner of the firm takes responsibility for content creation.

David: The broader they spread that responsibility, the less there's a common voice where there's points of view that employees are less confident taking versus a principal. There is a diminishing return the more you spread that responsibility out to get all kinds of help.

Back to these constraint exercises. If we were to flip this around and I were to ask you like, "Okay, you can't hire a new business person. What would you do?" Would you say enviably, 100%, that the principal needs to be good at selling or do you think that's not always true?

Blair: I don't want to say always or never. I don't think that's always true, but I think it's functionally true. I think if the principal is good at selling-- they don't have to be a natural salesperson, they have to free up other areas of responsibility, take responsibility for getting good at selling. That means they have to at least enjoy it a little bit. Then, I think that's the key.

In order, I think it's properly positioned first and then the principal of the firm taking a leadership role in new business. Now, if they are a natural salesperson, they can do the kissing hands and shaking babies part of new business. They can do the networking. They can go to all of the events. They can build relationships. They can call on these people. They can play a lot of golf. They can go to the Chamber of Commerce lunches. Whatever it is that they do. They can go to all the conferences. They can just get out there and meet the clients and interact with the clients in this space.

If that's not them, then they should be looking at content creation. Do they value being seen as the expert? Is it important to them or satisfying to them to build a reputation and get it out in the marketplace and be known for something like you and I? You and I liked doing that. We like putting content out into the world and being known as these people who have these maybe sometimes provocative points of view or data-based ideas on what it is that we do, but other people in our position, they might just be more natural salespeople.

The short answer is the firm that does not have a new business person almost always has a principal who takes a leadership role in new business. Either through the content creation, they are the star who gets put on the stage, or through more one-to-one, person-to-person-based selling.

David: You know what's interesting to me listening to you describe that, the same principals who want to hire a new business person do not want to be that new business person because they think it carries some baggage that they don't want to be associated with, but they're fine hiring somebody like that. These folks are probably better at selling than they think they are, but they don't want to identify their skill as selling because they think it's just a little bit beneath them. I don't know if that's widely true, but I've seen it sometimes. It's just interesting to see.

Blair: Yes. The unseemly S-word.

David: Yes.

Blair: You're in sales because you're not good enough to be a marketer.

[laughter]

David: Yes. Oh, there are times when it makes sense to have a new business person. It's not automatically a bad idea.

Blair: No, it's a valuable constraint-driven exercise to try on. If I couldn't hire a new business person, what are the changes that I would need to make in my business? Well, I would need to take a bigger role and whether I see myself as a marketer, like an expert on the stage or a salesperson. That means I'm going to have to free up other areas that I've held on to. I'm going to have to delegate other areas and I'm going to have to have 25% to 50% of my time be a new business.

I'm going to have to look at my positioning and make sure we're properly positioned, so we're driving inbound inquiries to us. One of the other things that falls out of proper positioning, no way I haven't talked about yet, is I'm going to need to make sure that our new business process isn't tied to the pitch industrial complex.

David: [laughs]

Blair: I'm going to have to get out of the pitching and the just high volume RFP response game because that takes a lot of human resources. In the generals' agencies, you look at what new business people do. Well, they fill out RFPs and they coordinate pitches.

David: Yes. Every once in a while, that's okay, but you're slowly moving away from that, or like you referenced earlier, there are certain verticals where business is still done based on connections. We mentioned entertainment, sometimes investor relations, publishing, fashion every once in a while where it's tied to particular people, where you could see that. Then it just terrifies me though because this person you hire who knows all the right people is going to take their Rolodex with them when they leave you in two and a half years and you'll have to find somebody else. There's a certain terror in that too.

Blair: Yes. We have a client. You know them as well. They recently brought on one of these really senior people to do business development, but this person also bought into the firm. That addresses that issue. This gun for hire is going to move on and go work for your competitor. All of that success that they brought with them is going to leave with them too.

David: Yes. This to me is one of the very best examples of how powerful partnerships can be wonderful where you have one principal who just isn't as comfortable selling and somebody else who just loves the perspective of helping, conquering, and closing. It works really well and it also establishes a healthier partnership because they're not a stack of plates. They do very different things. The salesperson looks at the other person and says, "I am so glad I have you as an operator. You're having these discussions with the team that make me uncomfortable. You're solving issues with clients and we both appreciate each other." It's just a great example of a powerful partnership.

Blair: It really is. If you're the business owner and you're considering taking on a partner and you serve a vertical, if you go into that vertical and pull out a seasoned expert from that vertical, and I'm thinking of multiple firms that both you and I know right now where this has happened, that partnership can be really, really fruitful.

David: Yes. The question was, do you even need new business people? The answer is, sometimes. When you do bring somebody on, make sure they're there not as a cover for your lack of leads or for your lack of positioning. Just think through it carefully.

Blair: Yes. Make sure you can answer that question of what it is that you want that new business person to do. Then ask yourself, is a dedicated person the right solution here? Should I be doing more? Also, we only touched on it briefly, but this idea of the pitch industrial complex, this constraint-driven exercise, try it on. If you're living that life where the new business function is largely responding to RFPs and coordinating pitches, try on this constraint. What if you couldn't do those? What if you weren't allowed to respond to RFPs and you weren't allowed to enter pitches? What would have to change about your business?

That's a terrifying thought, but the outcome of it is a firm with significantly more market power where the dynamics are more favorable to you in the buy-sell relationship than they are to the client.

David: Right. This has been great, Blair. Thank you.

Blair: Thanks, David.