Nick's Insight

66% on price, are they taking the pitch?

January 22, 2019
Nick Prescott
Managing Director
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It's well known in agency land that pitching is as commonplace as the fancy coffee or newfangled tea blends you'll find in any studio kitchen.

Generally, if you want to get a look in at the best gigs for the big names you'll be pitching if you even make it as far as the shortlist. It seems now that many clients, by no means just the ones you will have heard of, are adopting a similar approach to running a pitch, tender, bid or whatever you prefer to call it, for low-budget, price-led projects too. Essentially engaging a gaggle of blind-hungry agencies, in some cases as many as ten, in a race to the line for a small prize. Some are paid for, but most are free and with the scale and scope of what's being asked ranging from a written proposal to a suite of concepts, to a full campaign outline, sometimes even more.

The ongoing dilemma for agencies, including ours, is whether all the time, effort, expense and risk involved is worth it? So where do we stand?

We recently declined an invitation to a four-way pitch. The project outlined was for brand identity and collateral design, with a process involving chemistry meetings, proposal submissions and presentations. Not a massive ask in the grand scheme of things, or even particularly taxing for any half-decent agency, so why did we decline?

On the surface the opportunity did seem attractive and potentially well suited to us; however, one thing that rang alarm bells for us was the scoring criteria described in the invitation. It stated that around two-thirds of the marks would be awarded against proposed fees, with quality and experience accounting for the balance of the overall score. It doesn't take a genius to see where that was going.

We later heard that the value of the project awarded to the 'successful?' agency was somewhere in the region of £5k. Now the contenders (…rrrrready!) were not micro agencies; two were in fact of a fair size relative to the opportunity.

By our estimations, the work involved in just delivering a credible bid and committing experienced people to presentations would have exceeded that budget, let alone delivering creative on the actual brief. We certainly couldn't have entertained a loss-making project just for the sake of winning the race.

I'll be honest; we've not had loads of experience with pitches because we've always tended to avoid them. We've done this mainly out of principle but also because the clients we typically engage tend to place expertise and relationship value higher than say price, and they certainly don't expect to try before they buy. Looking at how the market is shifting, I think we're fortunate in that sense.

Perhaps the example I touched on serves to remind us why we have maintained our position, it tells me we made the right call to decline, yet I can't help but fear where this could be taking agencies, and sections of our industry. And I'm talking more about this price-led pitch model rather than pitching per se. It's predictable in our pressure-pot, turnkey economy that price is becoming more and more a factor in agency appointment decisions. I think inexperience is having an impact here too.

I recently wrote a piece on learning to say no, and the growing issue with price first buying is that inevitably someone else will always say yes.

Ultimately, in my opinion, this means everyone loses.

The average agency will struggle to be profitable and live an unfulfilling hand to mouth existence, or worse, go under. The client will get a compromised, likely forced solution to their brief, which in the long term will hold them back from achieving what they set out to do (re-design in 12 months?...arrgghh!). The industry suffers because standards lower and consequently agencies have to cut costs to stay in business. Staff usually get hit first and end up taking lower paid jobs elsewhere to remain in work. So between the inexperienced (unrealistic, naïve or under-pressure) client, the ‘yes' agency boss and the underpaid, under-pressure bods in the studio, we have a recipe for disappointment or even disaster.

Worse still, maybe some of our creative talent give up and take up jobs in other industry, impacting on the skills gap that's already a growing problem in the digital sector.

Taking a step back for a minute, in fairness, I may only be looking at a particular section of the market, the micro to the small independent agency and mid-size client so don't take this as a global perspective (am I missing something?). I'm principally reflecting on my own experience, and how I see things going with the ill-conceived pitch models, I'm witnessing and hearing about. I'd certainly welcome opinion from anyone who sees things differently and can offer some positive encouragement. Better still from anyone who believes price-led pitching is a good thing!

The danger for us, indeed other agencies, is that as more and more clients get drawn into try-before-you-buy, ‘go-compare' price-pitching scenarios the more pressure on us all to compromise our principals, profitability and the well-being of our team. That worries me.

Don't get me wrong; I do understand the principals, indeed benefits of pitching if it's done right. I won't just buy stuff from any old shop, I want to know I'm getting a good deal, but that doesn't always mean going for the lowest price. I like to think I take brand value, quality and service into account, as well as product experience and satisfaction.

I can usually figure all this out without having to ask the managers of five shops to attend my offices, present their credentials, pitch their goods to me and explain one at a time why I should buy several boxes of floor tiles from their company (and ask them to throw in free cement and grout too!). Could you imagine that? It seems absurd, yet agencies all over the world do this every minute of every day in a bid to win work, sometimes at any price.

Yikes.

I know you're thinking, ‘yeah but floor tiles ain't a five grand design project' no, not at all, yet the principals are the same, or at least similar. If I'm only interested in price, I can simply ask for a quick quote and disregard everything else. If I want brand quality and price, again I can figure that out with a web search and a phone call. The benefit here, in an agency scenario, is that the client's done most of the initial leg-work, not the agency. So the client's investing their budget in the agencies creative output, not the days of work they did to fulfil the pitch as part of the vetting. To me, this makes far more sense for everyone involved; indeed it's fair which is a term that's lost on too many people these days.

So then Mr or Mrs client, the only rational reason I can see for inviting agencies to pitch is that you want to learn more about how the agency ticks. To meet the people you'd work with, understand their approach, see their quality and get a feeling for the kind of experience and satisfaction you're likely to receive. Then be able to base your decision on thoughts and feelings that go way beyond worrying about what you could save by going for the cheapest agency. Likely this way you'll get what you want and need in a manner that's fair, and dare I say it, even preserves your integrity.

So why ever would you invite agencies in for a price-led pitch?

If you're serious about where you want to take your brand and business and committed to your cause, please never make price your champion.

Nick

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