On a Saturday afternoon, sipping craft beer – a dear friend of mine informed that the network agency he represents is cutting down on the sales team. Talking more on this development, I was told that there are few more agencies following this trend. “There are questions like what does a business development or a sales team do for a digital agency. Besides there is the extra cost that agencies want to get rid of,” my friend remarked .
Do digital agencies need a sales or a Business Development (BD) team? Is it good for a large network agency where the demands are more? And are the sales people working in this industry really abreast of the digital developments or are they just bringing mere leads for the agency? These thoughts were enough to make my head spin and I decided to talk to a few founders from the industry who run medium and large digital agencies.
Aniketh Dsouza, CEO of Mindstorm was the first one to share his bittersweet experience. Sitting on his white chair, in his Malad office, he recollected that in the past he made two attempts to build a sales team but the results weren’t encouraging. “We did attempt having a team twice but at the time, the costs didn’t justify affording a team in place.”
Few of the reasons included were Aniketh’s own limited knowledge on BD, the candidates he had hired appeared to be experimenting during their probation period. Also the BD team would target clients who considered social media at throwaway prices. “As a service business, this wasn’t feasible. The quality of leads we received didn’t justify the spends we did to keep them on board. Hence within a span of 3 months, we dissolved the team.”
Justifying spends is an issue that has also haunted SocioSquares co-founder Amit Desai. Over a recent interaction, he commented that he has always felt the need for a dedicated BD team if the agency wants to grow, as referrals don’t come every week. However he tried setting up a BD team but it was futile. Experience for him has always been at 2 levels:
- They are independently incapable of pitching
- The quality of leads generated have always been sub-standard
Lack of digital understanding or inability to pitch independently is one of the concerns that doesn’t justify the agency spends. Founder and CEO of Prodigitz Media Khushboo Tulsiani doesn’t have a BD team. “No, we don’t have a dedicated BD/ Sales team at Prodigitz, it’s been mostly word of mouth marketing, existing and past client recommendations, work showcased that has gotten us more business.”
As a mid size agency, her belief is that they really don’t need a BD team.
“I think BD/sales works really well when what you are selling is something tangible or operating in a commoditized category; like if you want to sell cars, servers, insurance, or media, you are going to need a good sales force.”
Understanding the digital business remains a big challenge for BD team, the other concern pointed by Aditya Chandra, MD at Sparkt is the linear approach of work. He informed that right at the start of a new year, the agency looks at two to three engagements in a year and subsequently invest its efforts into developing that engagement further with deep-rooted engagements.
“There are new business opportunities pretty much every week, someone in position heading a pure sales function tends to have a simple linear approach to every opportunity and rightly so, it’s their KRA.”
He further added: “To find that right beat often one needs to tango with each new engagement in a non-linear fashion hence someone who also plays a more active role in the practice might be better suited to bring home the right engagements.”
BUT NOT EVERY ONE IS AGAINST having a BD team and depend only on client referrals or word of mouth. Founder and CEO at WAT Consult, Rajiv Dingra is a keen believer in a BD team in an agency. Replying to my questions over an email, he informed that he first hired a BD team when the agency was 40 members strong.
“We hired a BD executive as it was getting difficult for me to manage all by myself. It’s also driven by market and we were early in a market with very few players and hence we had a lot of incoming leads. It may be a different scenario today.”
The same was pretty much agreed upon by CEO & CCO Carlton D’Silva at Hungama Digital Services. “Our team does include BD. I believe it’s important to have them as whilst the servicing team manages the business as usual and the growth of our current clients, the business development team focuses on bringing in new clients.”
Both Rajiv and Carlton today work under the umbrella of network agencies, where the revenue demands are very competitive. So the obvious question was – did it make sense to have a BD team when one is a large agency or backed by the network agencies?
Rajiv on the contrary thinks that it makes more sense to have a BD team in smaller agencies, as the market is very competitive and with too many players. “Larger and network agencies have the backing of a network which gets them invited to network pitches anyways. Having said that a good BD team has great conversions and are an asset in any agency.”
The times have changed today and with the changing digital landscape in the country, small and medium sized business are going to have a tough time. As Rajiv mentioned, it becomes imperative for such agencies to have a dedicated team to hunt for new businesses. For instance, the six-year-old creative digital agency Webmaffia has never had a BD team but the co-founder Veera Ghyara has started feeling the need.
“It’s always word of mouth from happy client references that can help a small agency grow over a period of time. And of course industry related acknowledgements in the form of awards and recognition. However post crossing a particular stage of organic growth, when an agency has ambitions beyond, we feel there is surely a need for roping in experts from the industry who can independently work towards channeling in parallel business, specially in new locations and geographies.”
She further added that it might not be so much a concern for digital agencies under the wings of a larger media house or mainline agency, since they get most of their business anyways from overall account wins by the parent agency. “This is probably more applicable to stand alone agencies like us who are working against all competition and trying to make a mark on their own.”
Carlton, who is part of a network group, agreed that there are times when they gain advantage of acquiring new business but not always. “It is not very consistent process and thus we need to follow our own plan and chase after our own business, essentially rely on your own strengths and be less dependent on others.”
Why would an entrepreneur say no to new business. Going forward Aniketh after having burnt his fingers twice wants to have a BD team to scale up his agency. “I do believe a business requires a team to scale & become successful. To grow faster we need a team of people who’d go out in the market and find businesses looking out for social & digital marketing services.”
But another big struggle of having a BD team by a small or mid sized agency has been the marrying of KPI’s. “It is hard to marry the KPI’s of a sales team to that of the rest of the agency. Their job is to bring in as much business as they can and they are incentivized accordingly. However, the business being brought in may or may not be in alignment with agency goals and aspirations. And that’s usually a tough bridge to build,” remarked Khushboo.
“It is hard to marry the KPI’s of a sales team to that of the rest of the agency.”
Having a BD team has its benefits and challenges. Digital knowledge is one of the key differentiator of an effective BD team. “In the digital space it is very beneficial to have a BD team that can speak the language of digital. The knowledge of this medium is very essential and one cannot use Business Development skill without the knowledge of the medium to win a pitch,” Carlton pointed out.
However the biggest challenge for Carlton and most digital agencies is having a good team. “Good BD professionals are very few in the space and eventually a team is never really equipped to manage the quantum of business effectively.”
Going forward Amit added that intent and search is always there for an effective BD person but success is yet to happen. “As we aspire to grow multi-fold, we are open to the thought of multiple pitches in a month. However, we’ve not been successful till now in identifying the ideal person to charge the role.”
What are your thoughts? As a digital agency do you have a BD team or are you happy with the organic referrals.