Requests for proposals are typically for clients looking to compare agencies for their projects while simultaneously driving down costs. However, RFPs aren’t helping drive new business for creative agencies because they’re the business equivalent of putting out a cattle call. Countless agencies respond, and the chances of being chosen vary. In fact, RFPs can be a waste of time, money, and energy with very little payoff overall: In 2020, RFP-related sales revenue dropped by 6% along with win rates.
When do RFPs work? RFPs make the most sense for IT and government contracts, because neither are too concerned with marketing and have work that is very direct and straightforward. These proposals help with vendor comparison regarding all of the important items for a buyer given that they know exactly what they want. The person commissioning the RFP must have a good understanding of the destination and journey that their contract entails.
On the other hand, RFPs don’t make sense when the client doesn’t know what the journey will look like. They can articulate the outcomes, but they aren’t quite sure how to get there. In these instances, an expert is always better. They can guide them to their destination, proving through their past work that they not only understand (and have likely experienced), but can also solve the scope of the problem.
When clients request RFPs, they are asking experts to pause their work with current (and paying) clients to work on their RFP for free. It’s not an equitable beginning to a relationship. But if RFPs aren’t generating prospective clients, how do advertising agencies get new business? Specialization.
Specialization is crucial. A specialized advertising agency builds stronger client-agency relationships. This allows for the connection between the agency and its clients to be personalized and unique — and not just another responder to a mass call for work.
Marketing should be seen as a profit center, and clients should see the money they spend with an agency as an investment. Based on X investment in marketing, a client will be able to see a return of Y in profit. When marketing is viewed as a cost center, controlling costs becomes the primary concern, and everything else — such as innovation and creativity — becomes secondary. Specializing avoids this back and forth and ensures that creativity and innovation are the main goals for the client and agency’s work together.
Reallocating resources toward specializing in a niche market and building content around that niche is the best way to bring in new clients who are invested in an agency’s brand.
How can your agency specialize? A well-positioned agency can easily communicate how it benefits its clients because it becomes a leading industry expert. Thankfully, there are many ways for agencies to differentiate themselves and choose the right niche for their business. Five questions agencies need to answer to determine their positioning strategy and type of specialization are:
Who is our target market?
What services do we consider world-class?
When should a client contact us?
Why should they believe us?
How are we differentiated from other agencies in our space?
As agencies answer these questions, their specialization plan can become clearer. They can then think through the three different ways to specialize:
Industry:Agencies can specialize in an industry vertical and serve a range of needs for these clients. By only serving a single industry, agencies position themselves as the only choice in the minds of clients. Examples of common industry specializations include healthcare, education, or the nonprofit sector.
Service:Agencies can specialize in a niche service for clients across a variety of industries. This might include media buying, SEO, influencer marketing, or similar services.
Expertise:Agencies with this kind of niche could be focused on a demographic such as Generation Z or African Americans. This could also include special interests such as wellness, travel, and so forth.
When a client seeks out an ad agency to work with, they’re looking for an expert. And when your agency specializes, it becomes that expert they’re looking for. Specialized agencies no longer need to scramble to respond to the cattle call of RFPs — clients will search them out specifically.