The document discusses the growing use of RFPs (requests for proposals) by marketers when selecting advertising agencies, and some of the issues and alternatives to this approach. It notes that while RFPs give marketers control, they provide little information about client needs and can be an impersonal process. Agencies often spend significant time and money responding without knowing if they are a good fit. The document suggests that agencies could minimize RFPs by clarifying their unique brand, focusing on strengths, being financially stable, and selectively pursuing the right opportunities where there is a clear fit. Well-branded agencies with strong client relationships may still attract clients without needing to rely primarily on RFPs.

1. Should You Welcome RFPs?
by
Mike Carlton
The Way it Works
You know the drill. An unsolicited, unexpected request for proposal (or request
for information) arrives. It is from a search consultant representing a well known
marketer. It is a client you have had no contact with but would very much like to
add to your roster.
There is very little info about the marketer’s challenges and needs in the RFP. It
is mostly questions about your agency. Most of those questions are logical and
make sense. But some are quite intrusive and in your opinion have little or
nothing to do with your capabilities of serving this particular marketer.
Into Action
Almost reflexively, your new business team swings into action. They drop what
they are doing and pour their energy into this new opportunity. The atmosphere
is heady. Everyone pictures the joy of landing this new piece of business.
But at this point you’re flying blind. The boilerplate in the RFP doesn’t reveal
much about the marketer; Its aspirations? Objectives? Needs? Wants? Pain
points? Culture? Decision makers? Why they are changing agencies? Budget?
These are all unanswered questions.
A call to the consultant doesn’t help much either. He is polite but not very
forthcoming. He basically just recites the rules of the process telling you that any
questions you have should be formally submitted and they may be answered for
you with copies to all the other agencies being considered. And, he won’t even
tell you who those other agencies are. Or even how many there are.
Undefined Target
Thus, your people are left playing a high stakes game of trying to precisely
answer sometimes vague or even irrelevant questions. Not sure of the best way
to frame answers to the RFP questions. It’s something of a big guessing game.
So you play by the rules. Finally, usually at the last minute, your package is
ready. Off it goes. Then the waiting begins. The marketer misses the date they
had set for a response. The consultant tells you that they have been diverted
internally by some other issues and will be back to you shortly.
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2. The News
Finally it arrives. The consultant calls to tell you that you came very near to
making the short list, but not quite. He thanks you and that’s it. He won’t even
divulge the agencies that did make the short list. Or even the other also-rans.
Your people are bummed out. They have spent lots of time and energy on this.
But, they quickly get over it. And who knows, there will probably be another RFP
next week. And it starts all over again.
The Alternative
But sometimes you do make the short list. That’s when it gets really exciting.
The time and money begins flowing big time. You now learn a bit more about the
marketer’s issues and interests. Your folks are mobilized. They put their heart
and sole into it. They are immensely proud of what they put together.
Then comes the presentation. The emotional roller coaster. Then the waiting.
Sometimes you get a call saying you won. Your people are ecstatic. So are you.
But much more often the consultant tells you that it was very close and you came
in an incredibly strong second. But you know he’s probably saying the same
thing to all the other losers. Your people are devastated. They wonder why?
What happened? But there is no answer.
What’s Going on Here?
The whole idea of marketers using search consultants and the RFP process is
really fairly new. It used to be that most marketers selected agencies largely on
the agency’s reputation and their personal relationships with the agency’s
leaders.
They wanted an agency that had proven performance in the advertiser’s
marketplace. An agency that had a clear and unique reputation and culture.
One with well defined and well internalized principles and creative standards.
And, most importantly, an agency run by people they had faith in.
A Simple Idea
This was a simple but quite successful idea. It worked. And continues to work
for a lot of smart marketers that choose not to use search consultants and the
RFP process. Ones that really understand the fundamental basics of this
business and how to employ agencies most effectively.
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3. And the good news is that a surprising number of client/agency engagements still
are made this way.
Complicating That Simple Idea
Unquestionably though, the use of RFPs and search consultants has grown
dramatically in recent years. It is said that this more rigorous, some say more
scientific, process assures a better match between client and agency.
Yet that is a hard premise to prove.
Clearly the overall tenure of client/agency relationships is shorter today than it
was just a few years ago. So the use of RFPs certainly doesn’t seem to have
made client/agency relationships more enduring. And it is almost impossible to
measure if the effectiveness of agency work is greater today than it used to be.
So, it is hard to find convincing evidence that the RFP and search consultant
process has delivered significant value to either marketers or agencies.
It just seems like the selection and engagement process has become more
complicated, more expensive, more impersonal and more frustrating.
So Why Is it Done?
This is not an easy question to answer. Some believe that there are three factors
at work here; First, general market conditions. Second, internal dynamics within
the marketer’s company. Third, the character of agencies themselves.
Let’s look at each of these factors:
1. Market Conditions
A basic rule of economics dictates that the law of supply and demand
ultimately controls every market.
The Great Recession has had a devastating impact on the advertising
agency industry. Clients slashed budgets. This led to massive
overcapacity within agencies. And in response many quickly shrank their
staffs by a quarter to a third or sometimes even more.
Yet even with the cutbacks the supply and demand balance still swung
dramatically in the marketer’s favor. This gave the marketer a greater
array of choices. And greater control over pricing. As well as a special
sense of power.
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4. Yet at the same time hungry agencies quested after almost any new
business, even if they were not well suited to handle it.
Thus, one could argue that it made sense for careful marketers to more
thoroughly vet the potential agency resources they might choose to use.
And the RFP process made that vetting quicker and easier.
The marketer held the hoop. And agencies gleefully jumped through it.
Interestingly, with the economy now improving it appears that many
agencies are now operating at capacity, or close to it. In classic economic
models this could tip the power balance back in the favor of agencies.
This may allow agencies a bit more client selectivity, a bit more pricing
power and a bit more swagger.
2. Marketer Internal Dynamics
The past few years have been really tough on CMOs. The average chief
marketing officer job tenure has dropped to about two years. Not much
time to deliver real results.
In this environment justifying decisions can mean the difference between
keeping a job and the unemployment line. Even if the RFP process is only
window dressing to validate a predetermined agency preference.
So it is no wonder that many senior marketing people have embraced the
RFP and search consultant process. It is safe and sanitary. It provides
documented validation supporting the selection.
Yet the reality is that safe decisions in advertising and marketing are
usually not the most effective in the marketplace. Nevertheless in this
time of immediacy short-term safety can trump long-term success.
3. Agency Character
As Pogo once said, “We have met the enemy and he is us.”
Like it or not, agencies themselves have almost invited the RFP process.
It is increasingly hard to distinguish one agency from another. And that
encourages marketers to use RFPs to discover and document small,
sometimes inconsequential, areas of agency differentiation.
We are in an era where it is common for many full-service agencies to
attempt to be all things to all people. The “We can do it all” is a
reoccurring theme. Yet common sense tells us that with increasingly
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5. complex markets and the proliferation of ways to commercially
communicate even the biggest agencies and holding companies can’t do it
all. No one can. Different talents, skills and experiences are needed for
almost every marketing challenge.
Thus CMOs are faced with a sea of agencies that, to the marketer at least,
look like Frick and Frack. And this impression is fortified by the constant
movement of individual talent from one agency to another. Sometimes
clients change agencies only to end up having many of the same people
working on their account. It just doesn’t make much sense.
The unfortunate truth is that many agencies that guide their clients in
building strong brand individualism are guilty of allowing their agency’s
brand to become commoditized.
Some Things to Think About
It is not pre-ordained that the principal way to get new business is through the
RFP process. It is an important way. And one that may be precisely right in
some circumstances. But it is not the only way. Agencies do have choices.
But changing things is not easy. Particularly when so many worthy marketers
are choosing to use RFPs. Yet every business arrangement should be a win-win
situation. Marketers need good agency services just as much as agencies need
good clients. If the selection process is unbalanced it serves neither very well.
If you believe there is benefit in leveling the playing field to become less
dependent on the RFP process, here are some things worth thinking about:
1. Clarify Your Brand
Really strong agencies usually have a strong consistent brand perception.
Marketers know what these well branded agencies stand for. Their unique
successes. What they are good at. What they believe in. And the
principles they embrace.
The market also knows what well branded agencies are not good at. And
the kind of work that is not appropriate for them. This prior knowledge
makes agency selection faster, easier and less expensive.
It is not uncommon for well branded agencies to be personified by a
strong and very public leader. Marketers knew what David Ogilvy, Leo
Burnett, Jay Chiat, Bill Bernbach, Pat Fallon and Alex Bogusky were all
about. The brand values of each of their agencies were crystal clear.
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6. This clarity attracted the right kind of clients and employees. And it
excluded those marketers and people not suited for the agency’s culture
and capabilities.
Unfortunately, this kind of clarity is hard to establish and even harder to
maintain, particularly when agency management changes.
So, if your agency’s brand attributes and perceptions are a lot like those of
competing agencies the RFP process becomes almost inevitable.
2. Market Your Brand
Ironically, while many agencies are superb at marketing the brands of their
clients, they can be terrible at doing the same thing for themselves.
Too often agency business development programs are built around
mailing out elaborately clever dimensional stuff followed up by outbound
phone calls. Calls sometimes not thought out much more than saying, “Hi.
I’m from agency X. Hope you got our mailing. We just wanted you to
know we’re around and ready to work with you when the time is right.”
This is sales activity not marketing. As the saying goes, sales is when you
call the prospect. Marketing is when the prospect calls you. And well
branded agencies do get the calls when the marketer is ready to move.
And start with a giant advantage even if the marketer still chooses to issue
an RFP.
Building a strong agency brand takes time. Lots of time. And it takes
unremitting consistency. Years of it. Even decades. But it works. And
the good news is that it doesn’t necessarily cost a lot of money.
3. Focus on Your Strengths
Every agency is excellent at some things and not so good at others. That’s
just the way it is. Be honest with yourself. Know what those strengths
and weaknesses are. Then play the strengths, constantly enhancing and
marketing them. Become well known for those strengths.
And at the same time, accept the weaknesses. While there is an
enormous temptation to try to improve on the agency’s weak areas
resources expended there will likely come at the expense of improving
your strengths.
It is hard to maintain a laser like focus just on your strengths But not
adhering to this concept can lead to an agency that is pretty good at a lot
of things but not really excellent at any. Thus becoming a prime target for
differentiation created by the RFP process and search consultants.
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7. This means when a prospect needs something that you are not very good
at you should be prepared to say no, thank you.
4. Be Financially Ready
But saying no isn’t easy if you need every bit of revenue you can possibly
get. Thus it is vital to embrace a business model that is first and foremost
consistently profitable.
It wasn’t so long ago that agencies were measured by their headcount.
Their size and heft. But that is changing. Today the lean and nimble
agency can often outperform its larger and more traditional competitors.
This means carefully controlling committed expense. Having only the
absolutely necessary number of full time people on staff. And then
augmenting them with project focused contingent talent as needed. As
well as avoiding expensive inflexible real estate commitments.
Restful nights come easier when you know that any particular new
business opportunity is not critical to the agency’s well being.
5. The Inside Track
While no one likes to talk about it, it is not unusual for one agency to have
the inside track in an RFP agency selection process. An agency that, if
the truth be known, the marketer is biased towards well before the RFP is
released.
This agency may have had a prior relationship with people at the client.
Or it may have been courting the client for some time. Or even have an
active mole within the client organization. In any event, the inside track
agency may know of the RFP well before it arrives.
So if you receive an unexpected RFP you might ask yourself if there might
be an inside track agency. And what that might mean for your agency’s
chances.
6. Be Selective
With a tight focus and a marketing machine behind it a profitable agency
can increasingly pick and choose what opportunities are right for it. And
what RFPs are worth responding to. While politely declining those
situations lacking proper fit.
So, instead of immediately responding to a questionable RFP, what would
happen if you told the consultant that before responding you would like to
spend one hour with the marketer’s leaders?
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8. From this brief encounter both the marketer and the agency should have a
better idea of their appropriateness for each other. And if the marketer
turns down this offer it probably tells you something about what a
relationship with them might be like.
There is an interesting psychology that can go to work when you politely
redirect a new business invitation. It is not unusual for the marketer and
the search consultant to be surprised by a show of courage and
conviction. And suddenly see your agency in a different light.
There can sometimes be something of a subtle role-reversal. Going from
them expecting you to court them to their tentatively starting to court you.
Not a bad dynamic in approaching any potential business engagement.
Dance to Your Own Tune
In primitive terms, the RFP and search consultant process is a mating dance.
And elaborate and tightly choreographed event in which the marketer is the
dance master. He determines the dancers. He selects the dance hall. He calls
the tune. It seems like agencies are almost like puppets in this show.
And a lot of it may be just that, a show.
Is this a healthy way to create an effective, strong and durable engagement? For
the marketer? For the agency that wins? Not to mention the unproductive effort
for the other participating agencies.
There are better ways. And strong agencies are embracing them.
Copyright 2011 Carlton Associates Incorporated
Quotes:
The marketer held the hoop. And agencies gleefully jumped through it.
There are better ways. And strong agencies are embracing them.
Illustration:
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9. Why?
Subject:
Agency Whitepaper – Should You Welcome RFPs?
Lead in:
Increasingly, marketers are using the RFP process when selecting an agency.
And that can be a big hassle. Yet many excellent long-term agency/client
relationships are still forged without RFPs..
Here are some thoughts on minimizing RFP frustrations.
I hope you enjoy the full text or the condensed video capsule.
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