Two cents blog

It’s Time for Agencies to Grow Some Balls

by Paul Cornwell on 19 October 2016

Picture this.

You have a very significant business issue that could dramatically impact on your future success. Get it right, and things look very positive. Get it wrong, and your competitors could surge past you and you’ll lose market share and ultimately profitability.

At the heart of this issue is a legal problem.  So, of course, you turn to the lawyers to get their professional advice.

But you don’t brief the legal firm you have worked with before. They have the track record and the experience to handle this issue for you.

Instead, you figure it would be better to brief several law firms on this crucial matter.

So, you call in seven or eight law firms, of all shapes and sizes, to hear their credentials pitch on why they should be awarded this project.

Your plan was then to short-list three firms, but five actually sounded pretty good, so you decide on five.

You then brief these five law firms on your business issue on the proviso that they prepare full legal advice for free.

Despite the fact that this particular issue has been brewing for over a year and a half, you give the five law firms two weeks to respond.

Some of them ask what your expectations on payment for this project are, and you are not willing to disclose this at this stage.

One asked if they could spend some time with you and your senior management team to develop a deep understanding of the context of this issue within your business, but you explain that you’d then need to make this available to all five law firms and that you simply don’t have time to do that.

So, to summarise, you have offered five law firms a 20% chance of winning your one-off project with no transparency on the income this is likely to generate for them.  You offer them two weeks to respond to a case that needs three times that to respond to comprehensively.  And, you will not give them access to your organisation to assist them.  Then, to cap it off you are asking them to do the work for free in the hope that they’ll ‘win’ the project (that they’ve already largely done), and get paid an undisclosed amount for it.

Sounds ludicrous, right?

Any law firm in Australia would respond by politely declining, but after you’ve left the meeting, they’d have a good old chuckle and then joke about how they’d go out of business if they worked on such crazy terms.

But, this is exactly what agencies are doing all over Australia every day.

We convince ourselves that we’ll make up the pitch costs if we do a great job on the project and then form a longer-term partnership with that client.

We talk about the prestige of winning that account and how it is good for morale and agency momentum.

We discuss how good this win will look in our Agency of the Year submission.

Explain this to your friend in any other professional services firm, or any business for that matter, and they’d say we are mad.  They’d remind you that you’re running a commercial enterprise and that working on reasonable commercial terms is a given. “Why would it be any different for an agency?” they’d ask.

So, it’s time to say enough is enough.

It’s time to start pushing back.

It’s time to grow up as an industry.

We are giving away the very product we sell. For free!

And we are agreeing to terms of engagement that are simply unreasonable.

We are all faced with all sorts of business pressures right now that we’re all working very hard to respond to.  Any business has to do this.

But we must force a change to a more commercially sustainable way of working.

Let’s stop accepting that this is the norm and let’s start today.

So, next time you get an invitation to a free, competitive pitch, ask for proper payment for the work (and not a bullshit $5k pitch fee that makes marketers feel better about what they’re actually asking for), request at least four weeks to respond, ask for access to the right, senior people, and ask for a clear understanding of what the remuneration looks like for this project and for the future.  Ask how many agencies are pitching.  Then make a sensible commercial decision about whether you pitch.

I bet you cut your pitch work at least in half, which will reduce the amount of agency resource working for free. As a result, you’ll end up with a leaner, more efficient agency that can dedicate its already stretched resources to incumbent clients, to doing better work, and to pitching for worthwhile new business.

Finally, don’t allow yourselves to be bullied by procurement departments or pitch consultants. Despite their rhetoric, they only have one agenda – to save marketer’s money.   Be prepared to walk away if you don’t like where they are taking the client.

We’re the only ones who can change this.

The balls are in your court…

Paul Cornwell is a Managing Director at BCM

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