The not so merry-go-round

Full disclosure up front: I work for an agency and there are many selfish reasons for agencies to despise the current pitch process. Pitches are time consuming, over complicated and costly experiences and, despite the appearance of objectivity, can be rife with personal preferences and subjective decisions.

Many of us like to blame the involvement of procurement specialists who appear to believe that great marketing services can be evaluated in the same way as computers or napkins. Procurement processes emphasise sameness and low cost, which are bingo when buying 10,000 rolls of toilet paper, but are lousy priorities for key strategic services that affect how consumers think and act with respect to a brand.

Most of us believe the request for proposal (RFP) process to be bizarre and outdated, but agencies and clients still can’t seem to work together to fix it. While many argue that the antiquated and confusing RFP process is due for a much-needed tune up, it’s difficult to know where to start.

And neither party seems to appreciate the other party’s side of the coin. Client procurement and marketing genuinely want the best solution and would love it if agencies came to the table suggesting how they think it would work best. Agencies seem to forget that RFPs are as much work for clients as they are for agencies. At the moment the two parties are sitting on either side of a fence working against each other. Changing the process needs to be tackled as a joint effort.

The intention behind the formal pitch is good – creating a formal process whereby solutions can be evaluated objectively – but the execution, unfortunately, is not. It’s complicated, time-consuming and costly where agencies can wildly over-promise and clients judge largely on price. More importantly, it places severe pressure on the agency and the client personnel who are required to keep an eye on their own ship, which is the reason for a pitch in the first place.

Either way, logic suggests that fewer pitches offer longevity and greater benefit for all parties.

Good relations

Where there are problems, Brian Sparks of Agency Assessments recommends a relationship audit, pointing out that smart clients do not knee-jerk into reviewing their agency by going to pitch mode. “There are many costs – not just money – in moving from an agency. The incumbent has an intimate knowledge of your industry, your brands, your company goals and objectives. The review process itself will take months. And then the newly appointed agency has to go up a steep learning curve to get to grips with your issues.’’

According to pitch doctor Una Herlihy, there are times when relationships have run their course and one or both parties want to consider what’s out there. “But in some cases, it can be better to invest in the existing relationship and employ the services of an outside point of view,” she says. “Someone who can review existing relationships and ways of working, etc, and who can provide an objective view on both the log jams and the quick-win opportunities.’’

In the late 1980s, clients introduced the process of an agency roster to allow selected agencies to continually pitch against one another on a project-by-project basis. FMCG companies led this, wanting a constant flow of brilliant ideas while not being willing to pay top dollar for them. Then, promotional ideas spend was considered a tactical lift, but soon budgets started shifting significantly in this direction and warranted strategic planning, which demanded greater investment. That was the end of the roster agency list.

However, the roster process is back again via procurement departments justifying their roles by delivering greater cost efficiencies during tough times. Both above-the-line and below-the-line agencies are now competing against one another on integrated briefs. This system doesn’t work. If it did, there would be a drive-through agency on Fitzwilliam Square where you would place a brief in one window and pick your concept up at the next with a free banner ad thrown in if you could identify the right pantone colour of the day.

It doesn’t work because relationships, trust, and robust thinking are not permitted. The agency can’t add value to the thinking. Smart clients respect this but lazy clients don’t and agencies should walk away from it for everyone’s sake.

Perfect pitch

In my opinion, there are huge concerns around the pitch management process of today. Looking at a typical pitch process, the client starts by scanning agency websites, media billings and award listings to determine 10 to 15 shops they would like to consider. The client issues a request for information (RFI) to fill out basic information, and the agency new-business teams respond.

The client whittles the list down to five or six shops to receive an RFP. They then issue questionnaires for the agencies to complete, along with requests for case studies and references. Each agency’s new-business team pulls client service, planners and creative personnel off billable work to compile the deliverables.

The client, or more appropriately, the client’s scorecard, determines three to six finalists. The agency shows speculative creative, media plans and kick-ass dashboards.

One agency is preferred by the marketing team and then procurement batters the lard out of said agency and they haggle over scope and price. The client awards the business. Both sides feel trodden on. The agency scrambles to staff the account while another client resigns because they did not get the ‘luv’ they were promised at a previous pitch.

To quote the Mad Men character Roger Sterling: “The day you sign a client is the day you start losing them.”

So here are some thoughts to stimulate debate and get all parties around the table to find the ultimate solution we equally desire.

Increase face time

There’s a severe lack of meaningful dialogue with clients at the start of the pitch process. We need to spend time getting to know whether or not we’d like to work with each other. Fundamentally, what creates a mutually beneficial relationship is whether or not the people get along and like or respect each other. Client and agencies totally agree on this. But when face time means sitting in a room with 15 other agencies speaking to a top table we should just go home and sharpen the pencils.

Discuss fees up front

This has to be a priority. Just as IAPI created its guide for pitches, we need parameters around the RFP process, starting with fee negotiations. From an agency standpoint, there’s nothing worse than advancing through round after round of scrutiny only to be pitted against competing agencies in a real-time auction to see who can offer the lowest rates. This needs to be done earlier rather than later in the pitch process. Agreement on what is a reasonable profit can be set out from the start. It keeps the whole process honest and allows the agency set its pitch costs more accurately on the now-known potential ROI from the outset.

Create a third-party audited list of agency credentials

An independent player such as the Marketing Institute of Ireland (MII) needs to be brought in to tackle this issue by compiling a list of all agencies in the industry. It should include number of staff, client list, samples of work, case studies, and other items of interest. Each shop would be required to submit to an online audit to ensure that the information is accurate.

I believe IAPI offers such a service but it covers just media agencies rather the whole field. Either IAPI should expand this or the MII should move in and create it. This will allow for clients to review an honest playing field all on one portal.

Create audited lists of client satisfaction

Currently, clients choose which shops will pitch based on metrics such as size of billings. However, the most important metric of all has to be how satisfied the agency’s existing clients are.

There is no better way to gauge satisfaction than by asking the clients to rate their agency on the ultimate question: Would you recommend this agency to a friend or colleague? In his book on precisely this topic, Fred Reichheld argues convincingly that the answer to this question alone is as telling as any elaborate pitch. While some pitches request formal testimonials, they are not specific and they don’t answer the ultimate question.

RIP the RFP questionnaire

From experience, there is nothing more dreaded than the 10-page questionnaire outlining 50 different items the client would like you to address. Likewise, from the client’s perspective there’s nothing more dreaded than reading 50-page responses from five different agencies. So here’s what I propose: RFPs should include only

one question to the agencies being considered: “Do you want to pursue this business?” A simple yes or no will do.

Find out from other clients

If I owned the client’s business, what would I do? I’d talk to their existing clients and find out for real. Clearly a one-question RFP is not sufficient as clients need more information to determine which agencies are a potential fit. Here’s the twist though – those questions should be answered by each agency’s clients, not by the agencies themselves. The people best qualified to answer questions like, “Are you able to help your clients achieve sustainable growth?” or “How do you keep your clients on the cutting edge of emerging media?” are other clients themselves.

Have clients co-present with their agencies

Let’s take the whole client-luving a bit further. Imagine the final pitch round featuring a case study presented by the agency and the client that the case is built on. What better measure of true agency-client chemistry? And what better way to ensure that agencies don’t have to pull their best people off their current accounts to handle pitches? Instead, they get the opportunity to dig even deeper into their clients’ businesses to identify key insights and merchandise their success.

Why would a client agree to participate? Simply put, what comes around goes around. Would you rather help your agency win new business – which adds to their marketplace clout and allows for further investments in research, technology, etc – or have them pull your senior agency team off your account while they pursue another client?

Do away with speculative work or pay for it

Another benefit of the client-agency case study is that it grounds the pitch in actual results, not speculative work. Under the current system, agencies are required to deliver strategy, creative and media plans for the prospective client. This is unfair to agencies on two levels. First, they don’t have the required knowledge or enough time to develop these materials, and second, they are rarely compensated for this valuable intellectual property. Most agencies will confirm that winning creative rarely sees the light of day.

Create trial periods so fees and scope can be accurately determined

One of the biggest travesties of the current pitch system is that it requires clients and agencies to negotiate prior to doing business together. What if the agency and client agreed up front a non-negotiable fee and scope for the first three to six months?

Then, once a winner is chosen, the six-month term commences and both sides are given a chance to really get to know each other. The client can evaluate if the agency is as good as advertised, and the agency can peel back the onion on the client and determine what level of skills the client has and the service they really need. It’s at this point, with both sides armed to the teeth, that true negotiations can take place.

Is it time to bring in a pitch charge?

In Mumbai, the Advertising Agencies Association of India (AAAI), an industry body of 84 advertising agencies, decided in 2006 to charge a pitching fee to clients. Arvind Sharma, chairman and CEO of Leo Burnett, said, “This isn’t meant to create a profit centre for agencies, only to encourage genuine clients.”

Some suggestions raise more questions than they answer. If nothing else, both parties are frustrated and are keen on a mutual solution. Besides, clients and agencies would have more time (and money) to spend on other things if they weren’t so busy processing pitches.

 Michael Killeen (MMII) is managing director of Dialogue Marketing.