It's not hard not to empathize with agency CEOs. The economy has never been tougher, they're spending a lot on new business salaries (which are not billable hours), they are hiring talent that specialize in bringing business in the door... they need to see a return on this investment. ‹ Show Less

Yes, but part of the point here is that New Business Directors don't have control over the win. They don't write the strategy. They don't develop the creative. Often, they're not even in the room when the presentation takes place. How can you hold someone so accountable when they're not even in the room for the pitch?

On top of this, it's completely frustrating when everyone on the pitch team doesn't always show up for the meetings, doesn't always properly prepare - and often doesn't want to rehearse. The New Business Director is doing everything they're supposed to do, but is the rest of the team always doing the same? ‹ Show Less

This comes up at the conference every year. Generally, everyone laughs about "herding the cats." But getting the entire team committed, focused and aligned does seem like a real issue.
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Good topic.  Last year my title changed from Director, Business Development to Director, Agency Development simply because I have a dual role... developing new buisness and promoting the agency, which in turn helps develop new business.  When we're in a review, my time is consumed with that business at hand.  When we're not in a review, it's prospecting, building relationships and letting as many people as possible know about what a terrific agency we have.  I agree with other posters that there are many variables which determine a new business win, many of which are out of the control of the new business director.  My previous position was heavily tied to wins/losses/budgets.  I prefer a bonus tied to my overall contribution to the agency and how the agency does as a whole, including organic client growth.  Our agency philosophy is that new business is everyone's responsibility, I'm just at the center of the wheel.   ‹ Show Less

If the job is New Business development (the process), that is what should be paid for. If however the job really is new business acquisition – then it becomes much clearer what is worth paying for. The number of potential clients delivered to an agency will convert into new accounts dependent upon the quality of the prospect. By quality I mean how closely the potential client matches with the agency profile.  So why should an agency pay for a process providing prospects that are poor matches?

Clients at every corner of the marketplace are looking to pay for performance. Why would an agency want to pay for good intentions or a lot of wheel spinning?  The only thing that has value is the new client. It is not 100 pitches that don’t result in any new business. The process needs to be all about pre-screening and carefully matching clients with the agency and increasing the quality of the prospect.

Then the bonus and compensation tied to actual revenue will be handsome indeed and a discussion about being paid for the process rather than the outcome won’t get much attention. ‹ Show Less

Brent, are you saying that new business directors are only tactical, that they don't make a strategic contribution to the pitch? You are way off... good new business talent is very much involved in shaping the presentation that goes forward and ultimately wins the business. This includes the strategy and the creative. If they're not involved, they're not ready to run new business. ‹ Show Less

you mean some new business people actually get a bonus? ;-)

i'd love to hear some more about how they're set up and structured ‹ Show Less

I would agree with Steve Roth’s comment. I have declined commission structures in favor of a straight salary with a bonus option along with the other members of the leadership team, since the agency’s growth is a true, collaborative “all in” effort.

Too many variables are involved in executing a fair commission structure. Most are based on original sources of a lead, but in the best agencies, a lead can come from anywhere or anyone. And it can—and should—get the great follow up it deserves without prejudice to source. A great deal of effort goes into nurturing those leads and developing long-term relationships that can eventually turn into accounts.

And if you’re developing a new business program from scratch—customized research, thought leadership content, category insights, and a full marketing plan—the lag time to see any of those commissions can be a long one.

While many New Biz directors can and do play very vital strategic roles, it’s highly dependent on the size of your agency and how roles are defined within your organization. I’ve written the strategic positioning and had creative input at a small agency without a planning department, but had limited role at a big agency with a planning department of 10 and a strong, seasoned Director.

To draw an analogy with agency compensation plans: cover your “costs” with a flat salary, then use an incentive plan to deliver a bigger margin. In effect, cover your mortgage, but enjoy that nice pair of Jimmy Choos if you blow your agency’s revenue goals out of the water by X%. An incentive program for anyone in the agency who brings in a lead (X per lead that results in a meeting) would also acknowledge the reality of referral sources. Then everybody wins—except the other agencies you trounce in the finals.

At agencies, we're selling the cumulative intellectual capital of a whole team of people. No matter how hard and well a New Business/Business Development Director works, there are so many pieces of the puzzle that come together in the right way for a win, and any number of ways a pitch can be derailed. Despite the fact that I work in New Business, I’m just not that big a gambler, and I won’t risk a big chunk of my paycheck on a decision that could still pin on whether a client feels better chemistry with a competitor’s CEO sitting across the table. ‹ Show Less

Great conversation. In my opinion, the role and pay depends heavily on the expectations of the position (set by the CEO). And it’s very important that the expectations and compensation structure and clearly outlined/established up front.

Some agency CEOs just want a pure lead-gen person—call, get meetings, and set up the team so they can pitch and win. Others want someone to come in and be lead-gen person, but also manage consultants, write RFIs and be the ringleader of the internal pitch process. And then there are CEOs who want/need a truly holistic CMO, responsible for everything relating to new business and agency marketing/promotion. 

Each position would likely result in a different compensation structure. The first based on qualified leads/meetings with a small piece of the pie if the agency wins the account. The second would likely result in a larger piece of the pie for wins, with little or nothing for setting up meetings. And the third scenario would likely result in a sizable piece of the pie for wins, but would also be tied to overall contribution as well, perhaps with a multiplier for surpassing certain revenue goals.

The interesting part of this whole conversation is just how much the Business Development role has expanded. Whether you are the CMO or the Director of Business Development, you must be thinking about social strategy/inbound marketing. 5-10 years ago this was virtually non-existent. Today, it’s a significant part of an effective new business strategy. I’d be interested to know how many agencies out there are: 1) actually factoring this into the agency’s strategy, 2) are overseeing or executing social/inbound as part of their job, and 3) are being compensated in some way for the performance of the agency’s assets.

I have to be honest: I used to role my eyes at the CMO title for agencies. But the truth is that Business Development/marketing for agencies really has become a much more complicated proposition; and the ability to effectively deliver has become significantly more challenging. The trick is having the ability, the tools and the team in place to help execute effectively. And with more resources contributing to the overall performance and success of an agency’s growth, one has to question how the compensation should be divided. The argument certainly could be made that it shouldn’t all land in one person’s pocket. ‹ Show Less

So let's start breaking down what new business directors should be accountable for, which will then inform bonus compensation. Looking at the role one area at a time...

What are the top 5 or 6 elements that a NBD's performance should be measured by as it relates to: Managing Competitive Reviews/RFPs ‹ Show Less

It sounds like more new business directors need to take more responsibility for understanding the situation of what they're getting into... rather than just taking the job and then complaining afterwards that they're not getting what they need to be successful.  ‹ Show Less