Why RFPs Should RIP

I’ve been on the new-business front for more than 30 years. I’ve won lots of battles. I’ve lost many more. But in the past couple of years, the process by which clients choose agencies seems to be getting weirder, and I think it’s an indication of some profound changes.

The fact of the matter is that the pitch process no longer works, for clients or agencies. As with so many other vestiges of our rapidly changing industry, it is time to abandon the RFP.

The basic model of new business is at least as old as agencies themselves. The multi-round pitch process was born in an era when single agencies would present ideas for a TV campaign, a print campaign, or both. Back then, client needs were much simpler, which enabled this model to work effectively. It was easy to compare work and pick an agency based on the quality of its creative ideas.

The world has changed dramatically since this model became de rigueur, but the process remains fundamentally the same. The modern pitch often includes multiple partner agencies (e.g., traditional, media, interactive, direct), multiple ideas and several channels of delivery, all rooted in complex research and insights. The entire range of thinking comes together in a couple of weeks and is conveyed in a 90-minute presentation.

During a pitch, agencies lack the deep, day-to-day client relationships that are essential to good work. In most cases, agencies are shooting in the dark, with only a limited understanding of the client’s needs, which is all the process affords. That a decision so complicated can be made with so little communication is ludicrous when you really think about it.

For interactive agencies, the pitch process can be downright goofy. Unlike traditional agency pitches, which are routinely covered in the trade press (everything from the client assignment to the agencies competing to the size of budget is revealed), interactive pitches are treated like a dark secret. Interactive agencies rarely know whom they are competing against, or what budgets have been allocated to the assignment—all of which makes it extremely difficult for agencies to qualify if an opportunity is even worth the investment to pursue.

In the past 12 months, R/GA has:

1) Participated in a six-month review with multiple rounds of unpaid strategic and creative thinking, only to learn at the 11th hour that the client hadn’t established a budget for interactive services.

2) Participated in two simultaneous reviews where, for the same kind of work and the same budget, Client X required a full-blown spec presentation and Client Y made the decision based on a couple of productive discussions (proving there is no consistency among client review needs).

3) Participated in a review where our ideas were exactly right for what the client needed, but there was no one at any level of their organization with a deep enough understanding of the digital landscape to recognize it (in my humble opinion).

Let’s face it, the standard pitch model is broken. How many times have we seen clients conduct an elaborate review, hire a new agency partner and then put the work back in review in less than a year? If the process actually worked in matching clients with agencies, this would almost never happen.

In rethinking the pitch process, clients and agencies have a common interest at stake. Clients want to save money and reduce costs for marketing services, while agencies similarly want to avoid the expense of long, drawn-out pitches with no clear objective. An agency can easily spend $500,000 or more to win a major client assignment (with the client possibly owning the losing agencies’ pitch ideas, even if those agencies haven’t been paid a dime for their work—another troubling trend). In turn, agencies eventually charge their pitch-related costs back to clients in the form of higher fees. So if clients and agencies can find a way to match themselves better through a more efficient, less expensive process, then everyone wins.

There are at least two avenues the industry should consider. One is to go modern, using technology to make the supply chain of ideas between agencies and clients work harder. Tools like databases and wikis might provide the inspiration for a technologically enabled solution. Online dating sites like Match.com and Chemistry.com are using sophisticated algorithms to match potential couples for romance. There is a business for someone—a new breed of search consultant?—who can do the same for clients and agencies, based on current data showing which agencies are doing effective work in specific areas that a client is interested in.

The other is to go the old-fashioned route and just take an agency out for a “date.” If I were a client today, I would consider the agencies doing the best work and take one or two out for a test drive with a project assignment. There are a handful of clients that do this (Target comes to mind), but the vast majority still rely on the outdated RFP process. Only through a real assignment can clients truly discern the capabilities not just of the agency, but also of the very team that will be committed to the work should the first date blossom into a long-term relationship.

If given the choice between a costly review and a paid assignment, I don’t know of a single agency that wouldn’t go all out to ensure the paid project was a success. So the risk clients face with this approach, as long as they start with a great agency, is limited. Great work at affordable costs is what clients and agencies both need to move forward, but our relationships together usually start on the wrong foot.