Are agencies chasing their own tails over new business?

THE PITCHING PROCESS – Even the biggest agencies are admitting to spreading themselves too thinly in the race to sign up more clients.  As Tony Lithgow discovers, being selective can be more advantageous.

It was the sort of opportunity the new business team on any agency waits for: a giant in the retail goods sector was looking for a big media agency to provide strategic vision and buying clout.

What the client got was an agency too stretched to even give it lip service, let alone the first class service the company was looking for.  The agency was gone in less than a year.

“It was a disaster all round,” the marketing director for the client concerned told Media Week.  “Looking back now, it was the worst possible decision.  The agency didn’t bring a fresh mind to the account.  It brought a fagged-out mind.  The consequences can hardly have helped our reputation or the agency’s.”

The incident highlights the dangers of agencies chasing too many pitches – and sometimes taking on new clients that they really can’t handle, while neglecting the ones they have.

A recent survey of 160 UK marketing services companies conducted by The PACE Partnership reported that many felt agencies “are wasting resources on pitching for every invitation that comes their way”.

Cautionary tale

The rueful marketing director mentioned above shares these concerns and says his experience provides a cautionary tale.

Reflecting on it now, he says: “I had my misgivings at the time because I thought the agency, which shall remain nameless, already had more clients than it could handle effectively, but we proceeded upon the principle that if you want a job done well, ask a really busy outfit to do it.”

Paul Denvir, a partner at PACE, says: “This sort of experience absolutely confirms the sort of warnings we’ve expressed.”

It is a point not lost on agency executives, many of whom admit that they all too often come across like a greyhound chasing too many hares.  But, at the same time, they are quick to point out that the recent advertising recession has forced many of them to grub around desperately for business.

Antony Young, chief executive of ZenithOptimedia, whose clients include British Airways and mobile phone giant O2, candidly admits that his agency has been guilty of focusing too much on new business.

“As an agency, last year we pitched far too much,” he says.

“This year we’ve undertaken to be more selective.”

Young continues: “So far this year, we have declined two invitations to pitch.  Winning pitches consumes enormous energy and resources.  No win comes by accident.  They’re usually hard-won battles of endurance.  A half-hearted pitch hardly ever is a winning pitch.

The best chance of winning is when an agency is fully committed to it.”

He adds: “We know we can’t constantly be pitching without taking our eye off an existing client.  To increase our chances of success, as well as our sanity, we are purposely going after clients we think we’re a good match for.”

Another agency executive who questions the wisdom of pitching for every brief that comes up is Michael Brown, new business director at Beatwax – a small marketing services agency that handles online buying for clients such as Casio and BVI.

He says bluntly: “There has been a downturn in spend on marketing communications and the scramble for business has meant agencies have been forced to scrabble around, almost in the dirt, for those pieces of business and the client side has abused that.  They’re just abusing the economic situation out there.”

His agency, and many others, are now learning the lessons of the past.

“Since Christmas, we’ve turned down eight opportunities to pitch for accounts,” he says, “we’re concentrating on what we have.”

He is adamant that it is better not to go for a pitch in the first place, rather than subsequently to lose an account because the agency is too weighed down with business to give clients the best possible service.

“You can irreparably damage your perception in the marketplace for the future,” he says.

Client pressure

Nick Walker, managing partner at Walker Media – which handles a huge raft of clients, including Halfords, Marks & Spencer, KFC, PC World, The Link and Currys – agrees it is vital not to neglect clients in the race to acquire more.

“We’d rather turn down working on a piece of business if we felt it would be detrimental to our relationship with our existing clients,” he emphasises.  “Your absolute priority must be to service your existing businesses well.  We’re six-years old and I can’t think of a single account we’ve lost because of negligence on our part.”

Walker adds: “There are certain agencies that are obsessed with increasing their billings all the time.”

But, at the same time, he recognises the pressure that so many agencies are under.

“It’s very difficult to say ‘no’ when you’re asked to appear on a pitch,” he says “The reality is that times are tough and you can’t necessarily afford to say no.”

Being too selective can cut down a client’s base to only certain key categories.

Walker stresses: “It’s a fine line you have to walk.”

Some agency people believe that many clients themselves are to blame for encouraging unrealistic pitching, which they say is not in the best interests of either the client or the agency.

Jerry Hill, chief executive of Initiative, argues that the craze for pitching is not all down to agencies.

“To some extent, clients have got to take some responsibility in this,” he maintains. “I think that, sometimes, clients actually fuel this problem by inviting too many organisations to be involved in the first place.”

The Institute of Practitioners in Advertising recently helped to draw up a Guide to Finding an Agency for clients, along with the Incorporated Society of British Advertisers, the Communications Agencies Federation and the Direct Marketing Association.

One of its main findings was that there should be a maximum of three new agencies, plus an incumbent, on any pitch.

Hill says there have been cases where companies have encouraged as many as eight different agencies to pitch for an account before whittling the list progressively down until a winner emerges.

“So, to some extent, clients seem incredibly keen to involve a large number of agencies,” he says.  “They ought to be much clearer about which ones to eliminate from the ‘long list.’”  Hill says that agencies need to strike a balance between servicing their current crop of clients and hunting for new ones, adding: “Doing no pitches is not a good thing but doing too many isn’t a good thing either.  You need a balanced diet, not one that leaves you than overfed or undernourished.”

Earning respect

He forecasts that for the rest of 2004 his agency will be spending more time on making sure that existing clients’ needs are being met.

That does not mean that Initiative will turn down opportunities that come its way.

But, he says: “We’re not actively chasing stuff.”

Chris Boothby, operations director at Vizeum, which handles AOL and Brewers, says: “Clients want to make sure that they have the widest view of what is available out there and want to make sure that they’re making the right decision.

“There is a danger that auditors, for whom I have a lot of respect by the way, almost cause this frenzy to see who can guarantee the cheapest rates.”

He says clients need to exercise more selectivity too: “They shouldn’t take a scattergun approach.”

Boothby, who says his agency won most of the pitches it went in for last year, adds that it had concentrated on the ones that Vizeum had the most realistic chance of getting and that were the best fit for it.

He says most clients accept that it is a competitive market out there and that agencies need to pitch for new business.

“But if service for existing clients is affected, then that’s a fundamental problem,” he adds.

The PACE Partnership’s Paul Denvir accepts some of the arguments about how difficult it is to resist the opportunity to hunt down new business in the highly-competitive world of media buying.

But he sticks to his line that the chase has its downside too.  “I accept that it’s not easy to say ‘no’.  But it’s not a question of how many pitches you take part in – it’s how many you win,” he says.

“If, by taking part in every opportunity to pitch, you spread yourselves too thin, you cannot really do your best on the ones that matter,” he warns.  “It’s when things are so tight that I have to focus on the ones you need to win and make sure that the major clients keep on coming back.”

Nor is he keen to identify clients as the villains of the piece, adding: “I never think a client is to blame for anything, actually.”

He rams home the point that every agency is free to reject the option of going for a pitch.

Indeed, Paul Denvir believes that agencies would actually enhance their credibility among prospective clients by being a bit more choosy: “Clients will respect that.”

And, as every agency would probably agree, respect in the marketplace is what really gets them new business.

Ten things you can do when not pitching

1) Blue-skying on how to pad existing clients’ fees
2) Arranging wacky stunts that get you tons of good PR but don’t actually make the client any money 
3) Re-arranging the meeting schedule with clients and not telling the creatives
4) Losing at golf to your biggest, most important client 
5) Hanging out in the company chill out room and stressing about the fact that there’s no more new business
6) Brainstorming to create the latest buzz-phrase and p**s other agencies off (how about: “return on joined-up media neutrality”?) 
7) Outsourcing the planning to the Indian subcontinent
8) Designing a really hip agency bar – because walking across the street to the nearest pub would really hamper creative thinking 
9) Figuring out just what the hell media neutrality is
10) Batting

 

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