New business is the lifeblood of every agency, but does all new business have the same value to the agency?
There are arguments for both and hopefully, your agency is sufficiently staffed to not have to make such a decision, but sooner or later you'll probably have to do so.
A Bird In The Hand...
The easiest path tends to be looking at existing accounts for growth opportunities. You already have a foothold there. You already know or have access to the decision-makers and you've already proven your capabilities (in some cases). So gaining new business there should be easy, right?
That's not to say it can't be done. Research supports the fact that driving new business from existing clients is significantly cheaper than winning new clients. But are those wins of equal value to the agency?
Too Much of a Good Thing is a Bad Thing
A diversified agency is a healthy, stable agency. No single client should represent over 10% of revenue. Agencies with that client:revenue ratio can weather a slew of client departures and still recover. Agencies with that ratio have the ability to negotiate from a position of strength with both existing and new accounts. And the key to achieving that ratio is new logos on the client roster.
Net new business is more expensive to achieve because it's of greater value to the agency and though it's the harder path, tasking those resources on new account acquisition is the better way to build overall value for the agency.
Another way to build value for the agency is integrating your Media, Project Management and Accounting software products into one comprehensive Agency Management System. Separate systems limit your ability to identify insights, improve processes and reduce human error that can cause the agency thousands of dollars. And adding new accounts only exacerbates the problem.
Schedule a free demo of Advantage Software and see how the right software can not only accommodate account growth but can help drive it. We all have to make hard choices on how to allocate our time. Prioritizing a demo for the future of the agency is a good choice.