My Prospecting Due Diligence Methodology

A Kaizen-based iteration. I love the graphic for celebrating success!

It’s been a week of CRM evaluations (see my reviews of: Agile CRM, Salesmate, and Zoho CRM), trying to figure out my hosting situation, and cooking tuna pilafs (in no particular order).

So what better way to end it than by talking a little bit more about sales?

As I’ve mentioned a couple of times before, the purpose of this blog is mostly for getting my own tech processes, stacks, and systems down on digital “paper”.

I’m doing this both in order to document their evolution and to have easy resources to share for collaboration (I have a friend who is starting a lead generation agency and whom I will probably share this post with). It’s probably of little interest to anybody other than me, but I guess you never can know!

Also important to note: I’m not showcasing these as examples of what to do or even suggesting that they are particularly good. I’m a huge fan of the kaizen continuous improvement methodology and — like all aspects of my life — this is simply a work in progress.

With that out of the way, here’s my current sort-of-methodology for finding marketing agencies to prospect to.


The Service That I’m Selling


A page on my website, DSRGhostwriting.com, which urgently needs a freshening up

As I mentioned in my first ‘sales stack’ post I run a ghostwriting business — specializing in long-form thought leadership content for technology executives and the public sector.

What that means in plain English is that I write a lot of opinion and pieces and articles (as well as white papers and e-books) on behalf of those clients — but I do not receive attribution, or a ‘byline’, for the writing.


My Three Target Customers


Clutch (Clutch.co) maintains an excellent database of agencies

As a writer, I have three main types of customer:

  • Companies. Often, the PR or Communications manager at a company will need external resources to support an internal communications strategy. Less often, the executives themselves might have the initiative, authority and budget to engage such a service.
  • Agencies. The agency landscape is vast and includes such variants as PR agencies, marketing communications agencies, and digital marketing providers. Writers typically charge agencies a lower rate than when working directly for companies because agencies handle business development and client management.
  • Individuals: Sometimes, individuals, such as entrepreneurs, technologists, and legal professionals want to increase brand recognition for their personal career advancement / renown.

Irrespective of what I do on the outbound side to generate leads, here’s my rough research and due diligence methodology I initiate whenever I try to screen a prospect.


Let’s Pick An Example Agency


Here’s a quick example of something like the research I would actually do.

I typed “marketing agency London” into Google just to find a completely random agency to demonstrate this process with.

The first result is a “digital marketing” agency in London called LOCALiQ.

Visiting their site, I would suss very quickly that their focus is really on lead generation and creating pipeline.

They don’t mention that they provide content, PR, or any other kind of communication service to their clients. So this is going to be a skip.

The next Google result brings me to a company called Passion Digital, another agency in the “digital marketing” space:


Example Agency Two


Dropping into their “services” menu, I can see that “content marketing” is one of the services they offer clients:

A digital marketing agency like this wouldn’t be my best typical fit — simply because digital marketing isn’t what I specialize in.

The fact that they offer content marketing alongside PPC and SEO indicates that the kind of content they’re producing for clients is unsurprisingly geared in that direction (although I have done plenty of writing like this, I try to focus nowadays on more nuanced forms of writing that are more in the reputation buildling and thought leadership realms, which is typically better served by PR agencies).


Criteria one: agency rates


Nevertheless, let’s do a little bit of due diligence on Passion Digital.

Firstly, I would check Clutch to get an estimate for what kind of rates they charge —because what I can charge them is going to be a fraction of that. These are reported by the agencies themselves so are likely to be accurate, unless the profile hasn’t been updated in a while.

Clutch is a bit of a bewildering website to navigate, so I actually find it quicker to just use Google to call up the right listing:

There are a lot of agencies out there and many tend to have very similar names, so I firstly make sure that this is the right Passion Digital. I see that it’s based in London, so I’m not going to investigate any further.

Clutch has gathered two pieces of information about this company that both indicate that they charge their clients reasonable rates:

  • The reported headcount is 10-49, so they’re a small agency but not tiny.
  • Their reported client fee is in the region of $150-$199 per hour.

On both counts, it’s worth looking into further.

If the latter were $50 an hour, by comparison, it would be a non-runner.


Next Question To Ask: Who Do They Work With?


As I mentioned, SEO-driven content marketing is not the field I’m currently targeting. But that aside, if I were to delve a little deeper into this agency, I’d want to check out: who they are and who do they work for.

They have a few client logos listed on the homepage which indicates the type of contracts they have on their books:

There are some respectable names there with good brand recognition — so that’s a positive.

If I thought that our service offerings would align, and I liked the type of work they were doing (for which I’d check out the “Case Studies” page), then it might be time to find a point of contact at the company.

I would combine that with a search of Hunter.io to find the right email addresses and then either enter them into my cold email outreach cadence (via Klenty) or I would reach out directly by writing them an email.

The cold email cadence

Digging a Little Deeper


Of course, if this was a bit more serious — say, a warm lead for a big contract — then the due diligence would increase accordingly.

I always like to start my research by checking out the company’s LinkedIn page.

It’s a good thing I did this, because it’s already brought me to a red flag

It seems as if the company has been working with a “Freelance Content Writer” based in India for the past eleven months:

The employment history as listed on the profile:

Coupled with the fact that this is SEO-focused content marketing, I would take this as a strong indication that this company is unlikely to be willing to pay rates to their writers that I would consider worthwhile.


Next Question: What’s Their Turnover Like?


Another key metric I’m always on the lookout for is what the company’s staff turnover is like. Obviously I’m hoping for a positive result, but “revolving door” workplaces are always a concern, and it’s a red flag I want to run a quick check to exclude.

To do this, on LinkedIn, I would:

  • Run one search with “current company” as the company you are investigating.
  • Run a second with the company you are investigating as “past company”
  • Compare and contrast the two

Of course, this methodology is imperfect, because:

  • Both searches can include interns, and other workers that were probably not compensated or intended as permanent hires.
  • Workers that receive promotions may have the company listed as both a past and current company — although recent UI changes now reflect that more accurately.

I’m hoping to see a picture that reflects a decent retention rate and stable employees advancing within the organization. But I’m also on the lookout for:

  • A “revolving door pattern”: employees that seem to stay for six to twelve months before leaving. This would be particularly concerning if the revolving door seemed to be concentrated within one department.
  • The ratio of current:past employees. If people tend to jump ship quickly — or the company has engaged in a major round of layoffs, which could reflect declining revenue — this will be skewed towards the latter.

Calling up a few profiles for past workers at Passion, I see:

Overall, the trend here is positive — particularly given that the agency landscape in a major world city like London isn’t one renowned for sky-high employee retention.

The current headcount is relatively junior but there isn’t an obvious mismatch between those currently working there and those who have “graduated”. Nor can I see any subtle signs that a part of the company I may be interfacing with as a contractor — such as Content Marketing team — suffers from dysfunction:

I would also pay attention to what kind of companies current workers have come from and what kind of companies former workers moved on to. Are they stepping up professionally after leaving, making lateral moves, or do a lot of them seem to transition into roles with seemingly less responsibility than that which they held at the company they left.

If this were a job, rather than merely a prospective client (and I were at an advanced stage of the interview process) I would also consider reaching out to a couple of past employees to ask them to candidly share their experience at the company.

I have done this on a number of occasions and received valuable information about the work culture and company — both good and bad.


What Does Glassdoor Say?


If I were really serious about working with a company, I would also certainly want to look at their Glassdoor account, which is a website where current and former employees can leave anonymous reviews about companies.

Finding Passion Digital here wasn’t hard:

When I’m checking out a company’s Glassdoor page, I’m looking for an overall trend rather than individual workers’ experiences — and am particularly interested in seeing what any contract workers had to say about their time at the company or their experience working for whoever might be managing me.

I’m also particularly interested to hear what marketing workers had to say — especially if they’re talking about somebody I might be working with.

I’m looking for consistent narratives, whether good or bad but am also wary of the fact that human resources (HR) could have either written fake positive reviews or have coerced or incentivized former employees to say good things.

So a positive narrative that is a little too consistent, or which uses the exact same descriptors in the exact same order, would also be of concern.

It is also not uncommon to see former employees publicly warning users that HR is playing such a tactic. I have seen both suspect cases and the latter plenty of times.

The first one for Passion is:

This first review is actually one I would be slightly suspicious of — although I don’t actually think it is fake.

What kind of employee actually has nothing even mildly bad to say about the company other than that “the ping pong table is always too tempting“? The list of potential minor grievances at a company is long, but could range from “management are set in their ways” and “processes are not well documented” to “I don’t like the free coffee in the canteen.”

This is actually precisely the kind of thing a HR Manager would write— listing the positives they want to get across and then including one “negative pro” just to put up a semblance of impartiality.

Overall, though, looking at Passion’s Glassdoor page only furthers my impression that this is probably a decent agency at which to spend time.


And What Does Crunchbase Say?


If this were a startup, I would also certainly want to check their funding history.

What series funding have they raised, if they’ve raised one at all?

If they haven’t, what are analysts pegging their recurring revenue at (assuming, of course, their financials aren’t publicly reported)?

Searching on Crunchbase, this is pretty straightforward information to find, but the same information can also often be gleaned from other sources.

This, I have come to learn over time, is really important.

Working for or with cash-strapped startups is an exercise in frustration.

Expectations tend to outnumber budget by a multiple. Dysfunction tends to be rampant. And employee turnover tends to be high as people inevitably realize that they could find a better work environment.

I could go on, but better not to.

Suffice to say that it’s more fun, professionally rewarding, and better for your career to work with organizations that have proper resources to devote to their employees.


What Does The Internet Say?


Finally, to cover all bases, it’s good to run a basic search for the company online.

In Passion Digital’s case, something like this would probably do the trick:

This would bring up media mentions, additional social media assets to review, and anything else that could throw further light upon the company.

If you really wanted to be an online sleuth, you might want to consider purchasing some of their tax filings to learn detailed information about their revenue:

It’s also always worth specifically searching for news and media mentions:


My Evaluation Would Be:


This brings me to the end of my demonstration due diligence process.

Regarding the example case:

Overall, I get the feeling that this is a good firm that is quite well known and well-respected within the London agency scene — as their Glassdoor intimates but also as I found out by reading what had been written about the company in Google matches.

However, SEO content marketing isn’t quite up my street and I would be concerned by the fact that they seem to outsource writing — at least in part — to cheap labor markets.