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Out of the blue, an RFP arrives in your inbox from a company with in an irresistible brand name. Wonderful!
But the thrill of the newly arrived RFP quickly gives way to discouragement when you see it’s a staggering 25, 50 (or even 100!) pages, with even more pages of terms and conditions. There’s probably little or no information about why they’re searching for a new agency and their questions are buried under a mountain of legalese and procedural directives. Yep. Probably a procurement crafted document from hell but the brand’s so great you can’t say no. Sound familiar? Well, take comfort, you’re not alone in your pain as almost any agency that receives this kind of procurement missive is agonizing as much as you are. So what are the clues and questions that you have a procurement driven RFP on your hands and how should you answer it? Here are few tell-tale warning questions we’ve seen in the past:Will you accept 180 day payment terms?
This one’s easy: No. For goodness sake people – why would anyone ask for or (or accept) 180 day payment terms. If you’re a client in search of a loan – go to a bank – don’t ask a potential agency to cash-strap their business to ease your cash-flow. Put another way, ‘would you mind if we held your paycheck for as long as you hold paying your invoices?’ Of course not. So why would anyone else?Describe your case studies in detail and attach all documentation in order to allow us to understand and evaluate the outcome
This issue for any agency in attaching ‘all documentation’ is likely a breach of confidentiality, and how could any team not associated with the project possibly evaluate the outcome? No matter how the question is phrased, the answer is: Client name – problem / solution – result. Succinctly. If you’re allowed to provide detail, by all means – but not at the expense of your own confidentiality agreements.Answer this question from another [unrelated] RFP we created…
This one came from an Asia Pacific RFP, but the variation on the theme could come from anywhere. And simply put, this is a procurement team lifting a question from a manufacturing RFP and dropping it into an agency RFP: What are the provisions of your DRP/BCP in respect of the services you are providing to your clients (e.g., alternative premises, recovery time, access to equipment and systems, etc.)? If you do not have a DRP/BCP in place, please state whether you intend to develop one. If so, please estimate date of completion. If you find multiple questions that are obviously only relevant to manufacturing or supply based RFPs, then make the case for pushing back, picking up the phone and asking why – even if it does break the rules.What discount will you provide / what work would be done at no cost?
Another case for pushing back – even if it means breaking the rules. As with extended payment terms, free work should be a deal-breaker for any agency and procurement teams should know better than to ask. Meaningful pricing is virtually impossible without a scope of work and pricing should reflect a competitive market price, while leaving room for a fair profit for the agency. Anything less is asking for trouble.Five golden rules
Rather than asking isolated questions that are largely irrelevant to agency search and selection, procurement teams will receive more meaningful and insightful responses by following five golden rules:- Context. Providing context for both the reason for the RFP and the questions being asked will help agencies craft insightful responses tailored to the organization for which the RFP is being issued.
- Case studies. Case studies should be used to provide a window into areas of agency capability that would be most relevant the client. An excessive number of case studies (more than five or six) will make evaluation between agencies more difficult and increase workload for both proponents and readers.
- Document size. Limiting the size of the response document to a specific number of words or pages is a great way to get the agency to focus their response, sharing what’s really relevant based on the context you’ve provided. This sets the foundation for more considered RFP responses and hopefully more engaged reading.
- Differentiation. Generic questions across about agency history or capabilities lead to generic answers that make the distinction between agencies more difficult, whereas thoughtful questions will generally lead to more thoughtful (and meaningful) answers.
- Evaluation criteria. Clearly articulated evaluation criteria will help agencies understand what to focus on within their responses and help procurement teams, and their marketing counterparts, rank responses in a meaningful order of merit.
If you’re answering an RFP and there’s no flexibility around these kinds of questions, beware. Press hard for their evaluation criteria and if it’s not forthcoming, the RFP may not be worth your time.
And finally… the question to which we don’t have an answer:
If your agency were an animal, what animal would it be?
I have to admit, I’ve no idea how or why this question would be asked but (unfortunately) we’ve seen it. So presumably the answer is, ‘dolphin’ because who doesn’t love dolphins, right? No? Then perhaps ‘tiger’. To eat whoever it was that came up with the daft question in the first place.Image by freepik
Whether you’re a client looking for marketing services, or an agency pitching your wares, the question of who’s really calling the shots can be a pivotal one.
On the one hand, the organizational perspective might be that marketing teams are evaluated on and are seeking things like improved performance, chemistry harmony between teams and agencies, creative brilliance and / or strategic smarts. On the other, client procurement teams are likely going to be evaluated on things like cost based efficiencies, savings, synergies and risk mitigation.
And with those perspectives, it’s hardly any wonder marketing and procurement teams can find themselves at odds with each other, leaving potential agency partners a little bewildered as to who’s really calling the shots.
We’re increasingly asked to work with procurement when undertaking an agency search – either to work on the search itself, or to work with them through the negotiation or contract development process. And while relationships between marketing and procurement vary between organizations, there are some consistent themes that are worth addressing.
In our experience, the primary issue many organizations still have difficulty coming to terms with is that marketing needs to be viewed as an investment – not a cost. In other words, it’s not something that needs to be “minimized” – it’s an investment that needs to be “maximized”.
So how should each side approach agency selection or contract negotiation in order to meet the goals of minimizing risk and costs, while ensuring maximum performance through best in class capabilities?
Here are ten approaches worth considering when marketing and procurement teams need to work seamlessly to achieve the best value (rather than just best price) for their organizations:
Same Team
First of all, marketing and procurement aren’t on different “sides” – there shouldn’t be sides at all. Both sets of players are on the same team – so eradicate the idea of “sides” from the get-go.
Start Early
Many will have read about the idea of starting the procurement exercise early – but how many actually define a working relationship between marketing and procurement before it becomes necessary? And how many actually involve procurement in the entire search process when they know procurement will take the lead on the negotiation?
Define Roles
Because marketing and procurement look at search and selection, and negotiation through different lenses – define and agree specific tasks for each group, leveraging respective strengths and skill-sets.
Get The Brief On Paper
Brief as you would an agency. Procurement work on multiple contracts for different stakeholders – just as agencies work on multiple clients. So define your objectives, propose your strategy, define go and no-go items, propose negotiation points and spell out your desired end state in a written brief.
Acknowledge Why You’re Here
If your agency search or contract negotiation is anything other than a corporate governance requirement, clearly define why you’re negotiating now. In all likelihood, lowest price isn’t the only or primary reason you’re here – so spell out why you’ve called an agency search or want your MSA or contract renegotiated.
Define Value
Lowest price rarely equates to greatest value, so define and agree what constitutes “value” to create an MSA or contract that delivers greatest value for the organization.
Don’t Chuck It Over The Fence
We’ve seen many agency search processes conclude with a winning agency, and the marketing team then hand-off the process to procurement to negotiate and finalize a contract. Procurement then have little or no context to negotiate “value” and marketing teams are quickly frustrated that the process takes longer than they’d like and / or key details aren’t covered.
Define Key Points
Every aspect of an MSA or contract is negotiable, so defining where you’re flexible and where you’re not up-front will help your organization create a true, value based MSA or contract.
Look At The Sum of The Parts
(Not just some of the parts.) As I’ve said before, every aspect of an MSA or contract is negotiable. Greatest value from a contract will be derived from looking at the agreement holistically, rather than piecemeal.
Be Like a Pilot
Because planes have dual controls, pilots identify who has control so they’re not pulling in opposite directions before they take-off. Ultimately someone has to lead the negotiation process and whoever’s responsible can save everyone involved time, effort and uncertainty by defining parameters and expectations in the key objectives and outcomes of the negotiation.
One of the biggest mistakes made by marketing and procurement teams is leveraging the marketer’s brand to lower prices to unsustainable levels. Low rates that are too good to be true usually are, and the agency will ultimately have to cut corners to keep and maintain your business in the long-term.
Proactive planning between marketing and procurement teams to define expectations, objectives, true value metrics and negotiation points upfront adds value and will almost certainly help you avoid undertaking a new negotiation – or even agency search – sooner than you’d like.
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The potential impact of an agency search on a marketer’s business can perhaps be best measured by multiplying your annual agency budget by 10 years – an anticipation of the length of the agency relationship. So a client with a $20 million budget, for example, could potentially be facing a $200+ million decision – not something anyone should want to take lightly.
Since the ICA launched its Pitch Watchdog two years ago, the association has questioned pitch processes from companies including Canada Post, TD Bank, the TTC, and YMCA. Earlier this year, the ICA came up with the idea to “send one of five anonymous, hand-written cards directly to the contacts”of an offending brand provided by an agency.
Irrespective of the likely breach in a non-disclosure signed by the participating agency, the ICA says the goal of these anonymous missives is to provide a “humorous yet pointed push” for clients to get the ICA’s free QBS toolkit. The toolkit is the ICA’s best practice agency search guide, and includes a binary outcome diagram to either “amend process” or “name and shame in public media.”
Personally, I’m not sure anyone would find anything humorous about being on the receiving end of an anonymous calling-card (handwritten or otherwise). And issuing a “search guide” in “an attempt to provide insight into the ‘why’ and the ‘how’ of abandoning the price-based RFP” just isn’t going to help anyone.
Advertising’s problem with RFPs
The reality is there are (unfortunately) advertiser requests for pitches out there that are badly conceived and executed, and can place excessive demands on agencies seeking to grow their businesses.
Whether it’s because they’re too cumbersome (because they ask for too much or unnecessary information), too complex, don’t provide sufficient guidance or make unreasonable asks – some clients get it wrong. And yes, sometimes badly.
While the origins of poorly run pitches may go back years, things began to take a noticeable turn for the worse during the financial crisis in 2007. Marketers found themselves under increasing pressure to cut costs while bettering performance with smaller budgets, and procurement teams were brought in to run pitch processes – or at least provide an extra layer of oversight.
Because procurement teams are often less familiar with service-based sourcing and/or not synced with their own marketing team counterparts, procurement driven RFPs can include complex asks and are evaluated based on an over-reliance on financial metrics. Outcomes can then be skewed in favour of price rather than value and otherwise perfectly suited agencies become eliminated too early in the RFP process for the wrong reasons.
But just because there are rogue RFPs that surface with unwieldy requests, doesn’t mean we should throw the whole process out as the ICA is stating: “when it comes to agency selection, of any kind, it’s not working…”
I resent the assertion that “agency selection, of any kind” (which is, by default, the hundreds of millions of dollars in searches we’ve done for some of Canada’s best known brands over the last decade) isn’t working. For the record, pitches we run never ask for prices up front and our evaluation methodology is always a discussion around who and what constitutes best value – not lowest price.
Sure, the ICA’s toolkit makes good points on low-cost processes, clear and obvious selection criteria, transparency and limiting the number of pages to force a balance between brevity and clarity. And it talks a lot about collaborative client-agency relationships too. But its watchdog diagram that concludes the guide, undermines its own message by threatening to name and shame in the public media as a recourse to those who don’t agree.
My view is soliciting media headlines and publicly naming and shaming clients does a disservice to both clients and agencies.
Industry bodies and consulting firms that hold unique and privileged positions of being able to view the market from the sidelines, surely have a duty to demonstrate leadership and help clients who may not be experts in agency search management. The Association of Canadian Advertisers offers a step-by-step best practice guide to their members on Searching for a Marketing Communications Partner. The Canadian Marketing Association has also developed best practices and guidance for RFPs, which it plans to release soon.
And for marketers or procurement teams tasked with managing an upcoming search, there are also specialist consultants who can provide objective advice and guide teams through their search processes – no matter if your extrapolated budget works out to be millions or billions.
In my experience, agencies are incredibly savvy about being their own watchdogs and doing what’s best for their teams and their businesses. So when it comes to the ICA’s watchdog in the background… stick it back in its kennel.
This article first appeared in Strategy May 21, 2019.