Commentary

Five Reasons To Disengage From A New Business Pitch

A lot's been written in the industry lately about indicators--what signs indicate when you should fire your agency, or when you should think about letting clients go. One thing I haven't seen discussed, however, is the notion of when you should cut your losses and decline an RFP for agency services. If you work at an agency, this is always a very difficult decision to make, but there are usually clear indicators that the potential client making inquiries is not the type of client you want on your roster. Here are some of them.

Insistence that agency services are a commodity. Often, when potential clients wants visibility into how your agency charges for its services, they may take a number of steps to get you to commit figures to paper like hourly rates, commissions or project fees. It's responsible to do this, and clients looking for agency services should engage in this exercise.

However, the usual next step is negotiating with the agency to make these service fees fit a figure that's usually equivalent to the lowest rate they've been quoted by an agency. What you have to be careful of is "value creep"--the notion that because some big commodity media player charges $50 an hour for planning services or the like, that you have to as well.

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Keep in mind that many of the commodity players like to employ recent college grads or intern-level folks with barely any industry experience. Be careful that your potentials client don't move you into a pricing structure that doesn't account for the level of experience your agency has. If they insist on doing so, it might be an indication that it's time to break off negotiations.

No loyalty. Quite a few advertisers believe in a "Best of Class" approach to marketing services, where they employ what they believe to be the best e-mail agency, the best search agency, the best media agency, etc.--all working simultaneously and in parallel with one another on the client's business. This is fine. However, there are other clients that take this to the extreme, having multiple agencies in the same category working against one another, butting up against channel conflict situations, and constantly worrying whether they'll be replaced next month despite quality performance.

A good client relationship requires trust on both sides. If a client wants your agency to be one of many working on a specific effort, and it seems you will not likely ever be trusted to do what you do best without another agency undermining your efforts, then you're being treated like a vendor, and not a partner. Walk and don't look back.

Wants you to lose money. A good client understands that your agency needs to make money with assignments so it can continue to provide quality service. Bad clients think you should lose money on their account just to have a nice brand name on your client roster. If you find yourself being tempted to sign on a big brand at a loss, just because you like how their name looks on the "Clients" section of your Web site, immediately proceed to your closest library or bookstore, check out anything by Ayn Rand, and reevaluate.

Won't communicate. As your agency moves from stage to stage through a review process, you should be getting positive and negative feedback with respect to how your proposal is holding up. A surefire red flag in this process is radio silence from the potential client. Over the years, I've learned that if potential clients don't communicate during the process, either they've settled on an agency already and haven't told you yet, or it's indicative of how communicative they'll be once they've signed a contract with you. In either case, it's an indicator you should cut your losses.

Shows signs it's really a fishing expedition. Unfortunately, some potential clients look at the review process as a way to inject fresh ideas into their incumbent agency. Sometimes, you'll find yourself being asked to come up with big marketing ideas as part of the process, and the potential client really has no intention of changing agencies.

There is no shortage of agencies willing to go through this process if they think there's even the slightest chance they may make it through and get the business. Make sure the material you send to potential clients is protected from a copyright standpoint, and learn to recognize the signs that indicate a potential client is engaged in a fishing expedition. This is a tough one, because it's difficult to get a gauge on whether or not the potential client really wants to move the business.

Do your homework. If you're asked to come up with a big marketing idea on spec, and to provide lots of detail (including billable rates and executional details), do your best to ascertain whether or not the business can be moved. Look to old articles and announcements concerning the potential client's last agency hire, to see if there's a long-term contract involved. Ask around the business and see if any of your fellow agency folks have been asked to provide big ideas on spec in the past. You may discover information that suggests the client is fishing.

Remember that the best client relationships are the ones that allow for mutual growth and respect. If you see indications that the potential relationship is heading down a path that doesn't support that notion, it may be time to reconsider.

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