Agencies stuck being dysfunctional with new business and pitching

einsteinTo Pitch or Not to Pitch  published in The Drum – misses a key piece of evidence on whether an agency should pitch or not. Maybe your own evidence will confirm this.  Of course what an agency is (should be) really deciding is if they are likely to  win or not.

If you are going to pitch at least know your chances of winning are good.  Of course you might not need to pitch at all to win.

Before I tell you the key piece of evidence let me explain why agencies pitch even when they are unlikely to win and why they might not be able to ever stop.

The chances are that agencies know they need to be proactive to gain new clients. Rule #1 – Be Proactive from Mister Stephen Covey.

The easiest way to do this is to contact marketers directly.  Makes sense, right? How hard can it be? Get a list – and get bang on it. Call them, e-mail them, send direct mail to them, update your CRM package, repeat till fade.

Some agencies spend a vast amount of time and money on these activities. And often the time and money spent increases over time as they chase increasing new business targets set by management. With new business managers being hired and fired like a bottom of the table premiership manager, round and round they go.

Quite often there is a target in place to hit in terms of quantity of meeting per month and pitches per quarter.  And these targets must be hit by hook or by crook and so qualifying slides or  goes completely out of the window. Targets cause dysfunctional behaviour that doesn’t best serve the agency. What we call cheating.

In fact all pitches invariably look like a good fit when an agency’s target is at stake, especially to the ones who have to hit the target. And most standard qualifying metrics (budget, authority, needs, chemistry, experience, growth potential etc) don’t help because they are easily fudged in favour of hitting the agency meeting or pitch target.

So even if some people in the agency knew the pitch was very, very, very unlikely to be won – hitting the target becomes more important because their job is on the line against the target.  It is how they will be appraised.  They’ll be forgiven for not winning the expensive and time-consuming pitch but not for not getting them on it. They’re stuck being dysfunctional.

Agencies rarely reward people for saving them money or averting danger. Imagine  a new business person saying – “I just save out agency £50K plus hundreds of hours in time by declining a pitch we’d never win, and gaining the  good will that goes with that, like the teams not having to  work weekends – any chance of a bonus?”

So what can be done? If we look at how marketers actually buy they rarely say we wait for direct approaches from agencies, do they?  Of course not. In fact many senior marketers who have spoken at The Art of New Business events say they bin DM, ignore agency cold calls, emails and rarely use social media let alone read trade press.

My experience is that most marketers buy from either a referred agency that was recommended to them or they go to an intermediary for advice.

Agencies tell me circa 70 to  80% of their business comes from referrals.  So if that is the case doesn’t that mean buyers buy from referrals the same amount of time, QED? Buying = Selling.

Yet most agencies don’t have a method to pick up referrals. And yet over 70% of their work comes that way?  Oops.  I think (objective) client servicing should dove tail with new business development see here

Let me introduce you to  what I call Column Thinking. I reckon being the referred agency on a marketers pitch list puts you in columns A or B –  the most likely to succeed agency with a 70 to 8o% chance of success.

This is the key qualifying metric that is missing in my opinion that I alluded to at the beginning of this post. The question to ask actually (internally) is –  “Have we been invited to pitch because we have a strong referral verses have we barged our way on and are really in column fodder?” “Are we there to make up procurement’s numbers?”

Column fodder are columns C and  D and sometimes further down the alphabet, they share 20 to 30% chance between them. The columns are often required by procurement but marketers aren’t averse from getting some free consultancy too.

In these columns might be the incumbent that is getting the push and agencies that have been added to benchmark on price that the client found via google searches or an agency that barged onto via DM or cold calling maybe or even a weaker referral from a less senior person client side.

Lots of cold channel marketing that agencies do, simply fills their pipeline with column C and D opportunities, which look great on a status report but cost a small fortune on time and money. And causes more issues than it solves.

So if an RFI comes out of the blue you are likely column fodder in my experience. If you have a strong referral you stand much more chance of winning that pitch.

Agencies need to learn how to ask for referrals within a comfortable client servicing frame-work, if they want to know which piece of business they are most likely to win.

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