Masterclass Notes: When to pitch, review agency requirements

by Johanna McDowell (@jomcdowell) This masterclass was designed to give an overview on what is happening currently in terms of pitching. Most of the marketers on the course had never been through a full pitch process, with many of them appointing agencies on an ad hoc or project-by-project basis, based upon referrals from colleagues.

Those agencies that are agency of record have had long relationships with the marketers; in those instances, we learned that the marketers, while keeping the their main agencies in place, like to look at other agencies for additional options, increased capacity at busy time, alternative costs, etc. So this particular session provided practical solutions to marketers on how they should handle pitch processes of any type, should they come up or should they be required.

What I suppose is the most revealing is that the lack of knowledge about agencies and the tendency to default back to an agency that has been used in the past — as a result of a concern that a new agency may not deliver —could retard business progress and there might be a failure to deliver. Clients are NOT keeping all of their eggs in one basket, any more as it does not make sense as it may have done 20 years ago.

1. An overview of agency relationship management

• Increasing number of agencies on client rosters
• Although desirable from a cost point of view, often difficult to find the expertise for all differently channels in one place
• Management of agency requirements becomes more complex
• Avoidance of overlap and duplication of costs difficult — makes roster management essential
• Management of KPIs for each agency essential

During this section, the discussion focused upon the fact that most clients now have at least four to five agencies of different types on their rosters. There are a few reasons for this, based upon specific needs in terms of various marketing communication requirements, as well as a desire not to have all of one’s eggs in the same basket.

Clients need to ensure that they receive delivery from agencies on time and on brief. They keep their options open in terms of capacity of agencies and delivery ability. In that case, we see less and less big pitches happening, and more and more small pitches among the various agencies, as well as realignment and collaboration processes being put in place.

2. Frequency of review

• Keeping the relationship healthy
• Minimum of one relationship health check per annum
• Annual review
  • Keeps both parties on their toes
  • Does not threaten end of the relationship but rather points to new beginnings
  • Chance to renegotiate scope of work and fees
  • Chance to review success or otherwise
  • Opportunity to talk about service levels and account team competence
  • Refresh the picture, drive performance
  • Increase review frequency if problems persist

How often should a client review its agency requirements? Annually, as a minimum. This does not mean that this review will result in a pitch process at all. It means that the review will take into account all aspects of the relationship, including working relationship, delivery, creativity, value for money, ROI and other commercial deliverables.

In addition, we believe that a “pause and reflect” must take place in order for clients to evaluate the results of their campaigns, and to tweak and adjust anything that is needed to ensure better results.

3. To pitch or not to pitch

• Openness and transparency
• Respect
• Bravery
• Access, navigation and timing
• 5 Ps of pitching — process, preparation, professionalism, partnership, payment

If a pitch process is inevitable, then we advocate that it be open and transparent, with frequent communication; each party should treat the other with respect; and clients need to be accessible to the agencies during a pitch process so that maximum benefit may be derived. We believe that agencies can afford to be brave during pitches so that they demonstrate their real skills to clients — delivering upon the pitch brief and not being afraid to suggest an even better solution.

4. Types of pitches

• Classic pitch — six steps

  • The brief
  • Initial report
  • Call for specific credentials
  • Chemistry sessions
  • The pitch
  • Appointment and contract negotiation

• No-pitch pitch

  • This enables one to deliver a fresh brief to an incumbent agency as if it were a new agency relationship
  • This gives the incumbent agency a chance to change an existing team and showcase new skills and creative approaches
  • Only the incumbent agency is asked to repitch for this business
  • When to consider a no-pitch pitch: if a client feels that there is a strong chance the incumbent agency could win a competitive pitch, but that there are a few things that would need to change about how the account is run, a frequent expression used is that the creative or relationship has “gone off the boil”

• Chemistry pitch process

  • The process does exactly what it says — a decision is made upon which agency to appoint after the chemistry meeting, effectively enlisting an agency partner to then work on developing the overall scope of work and the “big idea”
  • The chemistry pitch enables one to identify and appoint an agency partner based on its strategic approach, culture and relevant experience
  • No creative solution is included in the chemistry pitch
  • When to consider:
    • When a fully mocked-up creative solution is not required
    • The client wishes to explore agency capabilities in depth without a formal pitch
    • If a quicker/swifter decision is needed
    • If a strategic, rather than a full creative, view is needed
    • If resources are limited, and time and money need to be saved
    • If one needs to find an agency or consultancy partner and get it on board in order to help one define the ultimate brief

• The tissue pitch

  • This approach is designed to quickly explore creative and strategic capabilities against a brief, but is a pitch that does not need a fully worked-up creative solution
  • All about ideas at speed
  • When to consider:
    • Client is open to different solutions and is ‘brave’
    • When the client wishes to see how an agency develops ideas and thinking
    • Perfect for social media because it may showcase the agency’s monitoring skills, which may provide insight about the brand’s social presence and enable strategy and ideas to be developed quickly.
    • When broad strategy and creative are needed swiftly (this is not about getting the agency to provide fully developed ideas).

• Pitch in a day

  • Designed to really understand how an agency works, thinks and develops its ideas in an immersive way which includes client involvement
  • Designed so that one may see the dynamics of the agency team and learn more about the agency’s strategic and creative approaches
  • Takes place in a workshop format, where client spends a day with the agency team members, briefing them in the morning and actively participating in the session to understand the dynamics of the team, working processes and creative and strategic approaches — the agency then presents its ideas back at the end of the day.
  • One consideration for this approach is that client needs to commit one day per agency for the pitch, which means up to four days
  • This approach works very well in a no-pitch pitch situation.

Communication during the pitch process needs:

• Transparency and openness
• Frequent written communication and access
• Regular updates on timing
• Sharing of important information
• Budgets

5. Pitch fee compensation

• ACA rules and international best practice
• If you require to see creative as part of the pitch, you will pay the unsuccessful agencies a pitch fee
• Paid after the pitch
• Pitch fee does not buy you the IP
• IP negotiation is possible if there is an idea you like by one of the pitching agencies which is not the winner

6. Government tender process

• Legalities of the PFMA Act
• Process does not allow for frequent communication
• Price is often the deciding factor — 90% of scoring
• Technical expertise counts for a minimum percentage of the total
• No pitch-fee compensation

7. The role of procurement

Agencies need to understand the role of procurement, which is to judge sustainability of the supplier, as well as price. While procurement may not understand everything about an agency, it does understand suppliers, and agencies would be surprised at how knowledgeable procurement people are. Nevertheless, procurement see agencies as suppliers — not partners.

 

Johanna McDowell (@jomcdowell) is managing director of the Independent Agency Search and Selection Company (IAS), and she is one of the few experts driving this mediation and advisory service in SA and globally. Currently she is running the IAS Marketers Masterclass, a programme consisting of masterclasses held in Cape Town and in Johannesburg. Twice a year she attends AdForum Worldwide Summits.

 

 

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