In an opinion article by Diane Hargreaves, commercial administrator at CNS, published last year in this magazine (B2BM Oct 06, p5) agencies were lambasted for their failure to submit to the standard procurement procedures her company follows. Writing not only as ABBA chairman, but as someone directly involved in managing and running an agency, I would like to present the agency viewpoint.
Diane tells us the statistics speak for themselves. Apparently, 193 organisations were sent a request for information and only 33 per cent responded. So 62 sent in their response. Of these, apparently only 31 offered ‘the correct level of services’. These lucky 31 were then sent a request for a proposal. Apparently, eight (4.15 per cent) removed themselves from the process, and only eight sent in proposals. Of these eight, only four were good enough and four had the audacity to ask for a pitch fee.
Spirit of co-operation
There is plenty that is disconcerting about this process, and plenty in the piece that should make agencies sit up and take note. In trying to find an agency to work with on something as important as branding, it is noteworthy that the agency is described as a ‘supplier’. I suppose I should be realistic and understand that it is rare for agencies to hold an exalted ‘partner’ position with most companies, but what we do offer does demand a different kind of buying process from ordering photocopier toner.
If what you are after is advice, strategic input and recommendations for your brand, then you are in effect asking a third party to work with you on one of your company’s most important assets.
Quite clearly, you need to feel confident that the people you are going to work with have the capabilities, skills, understanding and dedication to be able to achieve what you require. The selection process is therefore important and requires a level of commitment from the company as well as the agency.
Try before you buy
Diane was outraged that four agencies asked for a pitch fee. She compared this to being charged for ‘junk mail’. (I trust her company never uses direct mail as a marketing tool; I am sure they wouldn’t want to be associated with the production of ‘junk mail’.) I am afraid this analogy illustrates the misperceptions that many in the procurement and purchasing world have of the way agencies operate and the way in which selection can be streamlined.
Some of us do use advertising and DM to generate leads or create dialogue with prospective clients. This is, of course, at the very beginning of the process. The pitch is at the end of the agency buying/selling process and is a different animal altogether. To continue her analogy, I would ask if she has ever been to Tesco, and asked them if she can take home a can of their own brand and Heinz baked beans, open them up and taste them, then only pay for the one she likes. What other industry would put up with this concept as part of selection? Do we choose lawyers on the basis of comparing the contract they have drawn up? Or our auditors on the basis of which audit we liked best?
Pitches are a way for companies to test whether an agency has the competence to deal with their issues. As I have mentioned before, they don’t always come up with the right solution and they don’t necessarily satisfy all the criteria a company needs to answer to find the right people.
We agencies detest them but will submit to them to win the clients we want to work with. They are hugely expensive, time-consuming and a big drain on agency resources. I wonder if Diane knows the cost to an agency of the average pitch: it runs into tens of thousands of pounds.
Many agencies therefore demand a pitch fee simply to test the company’s commitment to the process. All ABBA agencies can recall nightmare scenarios of winning a pitch only to find that the budget has evaporated, or being asked to participate just to make up the numbers, or losing a pitch only to find the company subsequently using suspiciously similar ideas, but ‘created’ inhouse.
Two-way, one-way
What I didn’t get any sense of in Diane’s piece was that the building of trust is a two-way process. The bare minimum we ask from an organisation interested in our services, is time. We need time with the company to understand the issues, and time with them to get under the skin of their promise positioning, audience and competition. Maybe this was to be the next part of the selection process.
However, it seemed to me that the process was dominated by formulaic procedures that worked on the basis that; if you start with a wide enough net, you will catch the best fish. A better way is to thoroughly define what you need, and meet with a smaller number of agencies to see if they can deliver it.
Nevertheless, there is one area in which I do agree with Diane. It is, and will become, even more important for agencies to properly understand procurement processes. We need to work with them, adhere to them and properly address them, because this is the future of working with large organisations.
