The day before yesterday a Midwest agency CEO called and told us that they cut all new business spending at their 40-person full-service agency. I cringed when I heard the story.
What would you say to your packaged goods client who called to tell you that they were firing your agency and eliminating their sales and marketing staff? Hopefully, it would be that they were ensuring their company’s demise.
Is eliminating all spending on agency new business any different?
Here are 11 ways to NOT CUT new business spending and grow during the recession:
- Conservatively forecast your revenue from existing accounts for the next 6-12 months.
- Identify your fix expenses (leases, etc.), and then forecast how much you can reasonably cut them.
- Identify your variable expenses (payroll, contractors), including benefits costs.
- Determine the expense level you can afford to maintain at a profit margin that will allow you to make payroll.
- Determine the number of people you need by department to service your existing accounts.
- Rank your top-performing people by department, and note which of them has grown new business organically.
- Identify the new business people, tools and resources you need to guarantee new business growth with a solid ROI.
- Build your recession-proof business model, and note key milestones that must be met.
- Immediately cut the people and expenses in order to meet your targets.
- Establish the activities that will need to be done on a daily basis to reach your milestones and ensure organic and new business growth.
- Measure your progress weekly and adjust as necessary.
I completed just such a review yesterday with a company president. While cuts are painful and can be difficult to make, it is far better than the alternative.