Welcome to the February edition of TrinityP3’s e-news
Pitching is always controversial. Beyond the fact that there is a winner and there are losers, it is increasingly because of the question: is it sustainable? This issue has recently arisen in the U.K., with the announcement by the IPA and ISBA of their plan to develop a Pitch Positive Pledge for the industry. Why? Because as we have witnessed, the way pitching is being used more and more to review perfectly functional and performing commercial client/agency relationships on a regular basis is hugely wasteful and potentially counterproductive.
Pitching, in some form, is required if an advertiser is wanting to select or change agency suppliers. But it is totally flawed if you are simply wanting to assess the performance and suitability of the incumbent supplier. The data suggests a pitch is more likely to result in a new agency than not. Even when the incumbent is providing a high performing service. The highly competitive nature of the pitch means that often the result is a lower agency fee, rather than a better performing arrangement. So, contrary to the thinking that the pitch is broken, we believe pitching is just badly applied. And here is why.
Why pitching is no longer good commercial governance
Too often we hear about marketers taking their agencies to tender on a regular basis. At the end of a typical three-year contract the advertiser goes to market to fulfil good corporate governance. Often this is mandated in the organisation as good procurement practice. But is this best practice for good governance when it comes to advertising and media agencies?
The evidence suggests that the tender process is a flawed approach for ensuring good governance. It is a way to select a new agency or supplier when the existing relationship is underperforming or broken. But taking an agency to tender when the agency relationship is healthy and performing well is a waste of time as it often results in a poor outcome. Find out why here
Want to avoid needlessly pitching your agency?
If you have a great high performing relationship with your agency, why put that at risk with a statutory pitch process? Incumbents have less than a one-in-four chance of retaining your business and that is not because they are not good enough. We have a much better way of reviewing your incumbent agency without a pitch. To find out more, contact us by replying to this email or through our website here
Why even the best incumbent agency will rarely win the pitch
We are seeing a rise in what are often referred to as ‘statutory’ or ‘regulatory’ or ‘compulsory’ pitches. This is where the agency contract term is at an end, and it is simply compulsory to take the incumbent agency to market. When we argue this approach is disruptive and a waste of time, we are confronted with the response that “if the incumbent is good enough then they will retain the business”. But this is just simply wrong.
While this may seem logical, the fact is the incumbent is retained in less than one-in-four pitches. Some put the number at a lot less. Combined with the fact that agency tenure is reportedly shorter than ever before, it is either that most agencies are hopeless (in which case why appoint them in the first place?) or there are factors working against the incumbent retaining the business. We believe there are three strong factors working against the incumbent’s success. Find out what they are here
Want to avoid your client pitching your agency?
Do you have a great client who is compelled to take you to tender or pitch just because the contract term is ending? We have a great way to assess your commercial performance that is less disruptive and less costly than going through a pitch process. 100% independent, rigorous, and detailed. To find out more, contact us by replying to this email or through our website here
When you want to renew the contract but not the agency
The biggest issue with the traditional pitch process (being either the Request for Proposal or the Speculative Creative approach) is it is designed to select an agency, but it is particularly poor at assessing the commercial terms and performance. Therefore, if a marketer is happy with an incumbent agency and wants to assess the commercial arrangements, running a pitch is a notoriously poor way of doing this.
If a marketer wants to review an incumbent, the best approach is independently to assess the incumbent without the distortion of the competitive nature of a pitch or tender process. In the past 12 months we have had more than half of the clients coming to us for a pitch to review their incumbent embrace a better way of doing this, which we call a Commercial Review. To find out how this works, you can read this case study of a Financial Services advertiser here
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