RFP? HOW ABOUT R.I.P.

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August 6th, 2008

Arguably, the three most dreaded words heard in any ad agency are Request For Proposal. Shouldn’t be negative, right? I mean, we’re talking potential new business here. It’s a client who knows enough about us to include us in a peer review with a limited number of other agencies. What could be so wrong with that?

Plenty. Unfortunately for agencies, chasing RFP’s is usually a waste of time and resources. I read somewhere the average agency’s closing rate on an RFP is around 5%. How can that closing rate be so low, you ask, if clients are including only three or four agencies in a review? In our experience, it is because there is rarely a “level playing field.” In many cases, the client has a feeling for whom they would like to work with before the RFP process, and the review is little more than a vetting exercise. Other times (especially with government or publicly financed accounts) reviews are mandated periodically, and there is an incumbent agency in place. Other times a new marketing executive is on the scene and wants to “shake up” his/her current agency. In the worst of scenarios, a client will call a review just to get some free “outside thinking” on his/her business with no intention of hiring most of the firms he/she is talking to.

Okay, so RFP’s are a pain for agencies. But guess what, most of them don’t work out that great for clients, either. Even for those clients with the purest intentions, RFPs are a poor way to evaluate an agency. Rarely can you compare agencies on an “apples-to-apples” basis, and cooking up some artificial point system only convolutes the process further. Often times, you’ll be dealing with the agency’s Presentation Team, which is a far cry from the folks who will be working on your account on a daily basis. And any creative or insights that are presented has been developed on a first blush lark, not with genuine insight and client input.

So if RFPs aren’t the way to go, how should one go about finding an agency? Start by looking around at advertising or online work you like or admire, then find out who did it. Once you have a few agency names, pay each one a visit. You’ll want a few questions answered: who are the people I will be working with; what experience do these people have in solving marketing problems like mine (note we said “similar marketing problems” rather than “specific category experience”); and, are these people I can feel comfortable working with?

If you insist on wanting to see speculative ideas or concepts, be prepared to put some skin in the game. Rather than expect agencies to go through all that effort for free, offer each one a stipend of a few thousand dollars. No way that amount will cover the time of staff spent on a presentation, but it shows good faith on your part. After all, if you knew you were to owe each agency $2,000 for its presentation, it would make you reflect on how serious you are about all your “contenders.” Also, don’t be reluctant to “open your kimono.” Share with each agency the research and insights you have, your competitive data and work with each one to develop a creative brief to work from. They’ll all sign confidentiality agreements. Chances are that will make the work you get back much more relevant to your needs.

And above all, if you’re tempted to “borrow” the work from one agency but hire another, don’t do it. Ethically you’ll be somewhere just below pond scum. And legally, the agency still owns the idea. And even if they choose not to go after you for it, it will get out how you are an unscrupulous marketer who takes advantage of well-intentioned agencies. And we all know that’s not the kind of client you are, right?

Posted by Mickey