You don’t have to rely on luck to be in the right place at the right time. As an agency executive, you need to know when potential clients will be on the hunt for a new agency so you can position yourself to land the job. That’s certainly easier said than done, but there’s one major indicator of where you should be and when: a leadership change.
You see, when companies hire new marketing decision makers, they’re looking for fresh outlooks and expertise that will incite growth. For example, if a brand wants to improve ecommerce sales, it may hire a CMO who has successfully helmed integrated, digitally focused campaigns for several online retailers. Your job is to know when executives are going to conduct an agency review and be ready for it.
Key Indicators of Leadership Changes
A leader’s departure -- or a leader’s arrival -- marks a prime opportunity for your agency to approach a brand. Incoming CEOs are unlikely to stay committed to the company’s current strategy or partners. As a result, they’ll devote their first few months to reviewing strategy, adjusting budgets, and meeting with partners and vendors.
Knowing when new marketing leaders will start and getting on their radar as soon as possible increases the likelihood that you can pitch your services and solutions to someone with an open mind. Here are four signs that a brand is about to undergo a leadership change or an agency review:
1) Sustained struggles
Four straight quarters of gradual declines -- or two consecutive quarters of double-digit declines -- in a company’s key performance areas signal that it will be looking to hire new leadership and/or new agencies. This is particularly true if a company’s revenue declines as the overall category remains stable or grows.
2) Low marketing/advertising ROI
If a company’s revenue and key performance indicators (KPIs) continue to decline while marketing/ad spend increases, it’s going to search for new leadership and/or new agencies. This also happens when a specific marketing channel isn’t performing to expectations. For example, if a company has raised its digital budget by 50% in the past year, yet online engagement and sales aren’t improving, its leadership is going to change.
3) A new CEO
When a company wants to get back on track, it may hire a new CEO. In turn, the CEO will appoint new chiefs and SVPs to run various segments, including marketing. For example, Office Depot hired new advertising and media AORs only nine months after appointing a new CEO. The logic is that fresh blood brings new perspectives and a heightened chance of finding solutions to revive growth.
Keep in mind that when a company hires a new CEO, you’re looking at a wait period for an agency review -- CEOs typically won’t hire a new agency without CMO approval. Take Associated Bank, for example. After bringing on a new CMO, it waited five months before hiring a new AOR. However, if CEOs have deep marketing backgrounds, they’ll hold more sway over marketing decisions. It’s important that you get on their radar before the new CMO arrives.
4) A new CMO
This is the No. 1 indicator that an agency review will occur within the next three to 12 months. In fact, all three indicators above are often precursors to a new CMO hire because low ROI is one of the primary reasons companies look for someone new to fill the CEO and CMO spots.
The average tenure for a CMO is 45 months, so if a CMO has spent several years in the role, a struggling company may look for a replacement. In other cases, existing CMOs may look for new agencies if they’ve worked with the company’s current partner for the average agency relationship of 24 to 36 months, particularly if they’re not getting results.
It’s important to keep up with companies that hire new leadership or continue to struggle, despite investing more in marketing and advertising. One more bad quarter may be the final straw that brings about executive replacements or an agency review. Your job is to be there with a solution when they’re ready to make a positive change.