Why CMOs pitch and how they choose the winner
Earlier this year I was invited to offer a consultant’s perspective to a global agency’s leadership team.
In preparation for the talk, I wanted to answer two questions that I thought would be interesting and helpful to the audience:
- Why do CMOs choose to pitch their business?
- When pitching, what are the primary reasons for CMOs picking the winning agency?
Of course, the decision to pitch and the reasons for an appointment are not the exclusive domain of one individual, so please just recognise the term CMO to be a proxy for all brand owners across marketing, procurement and management who are involved in working with agencies, the decision to review them and the pitch process.
To ensure a global perspective, I enlisted the help of 16 pitch consultants from Europe, Asia, Australasia, South America and the east and west coasts of the United States, to share their experience of the brands on whose behalf they have worked. And while I don’t know the exact number of pitches these consultants have collectively managed, I can say with confidence it’s an awful lot.
The top 10 reasons why CMOs pitch their business
In order of strength of sentiment, the reasons given are:
- Poor service – This can manifest itself in many different ways, but it is universally reported as the primary reason why CMOs go to market.
- The work’s not working (hard enough for the brand) – If the brand’s business isn’t performing to expectation, the agency’s creative output is often cited as a significant reason why.
- A capability gap – If there’s an apparent lack of expertise, this will be the catalyst for brands to undertake a review. Emerging digital media and technology platforms over the last five years have proven a fertile territory for such reviews.
- Transparency and a fast-changing media landscape – This is clearly levelled at media agencies, where complacency and ignorance among CMOs and agencies alike is no longer being tolerated.
- Agency team turnover – Brand owners crave team stability and consistency. The agency that fails to deliver on this is simply bringing forward the day their client calls a pitch.
- Fear Of Missing Out (FOMO) – The pace of change in marketing communications, technology, platforms and data has contributed to a perfect storm of too much choice, leaving brand owners bewildered and bemused. They may already have the right agency resource without necessarily realising it, but they will often pitch their business just in case there’s something better out there.
- New CMO – It happens. All agencies have experienced it in their favour (when a former CMO who has changed companies invites them to pitch), and against them (when the previous incumbent has been doing a great job but their replacement calls a pitch). Deal with it.
- It’s just time – Sometimes the very strength of the relationship can be the catalyst for change.
- Statutory review – Either for reasons of corporate governance or simply because it’s law, there are organisations and government bodies that have no choice but to review all their supplier arrangements periodically, regardless of the contribution made by those suppliers.
- Cost – It was notable that an agency’s cost of service was rarely cited as a reason why CMOs review their agency arrangements and, when it was referenced, cost was never the primary motivation.
The five most popular reasons why CMOs chose the winning agency
- Fresh thinking and ideas – This is particularly the case in very mature sectors and business categories, where growth is usually low single digit and very difficult to achieve. Agencies that offer innovative thinking that disrupts category conventions and challenges the status quo will win. It may be clichéd, but it’s true.
- The team – Chemistry between the brand and agency teams has been a constant feature in why agencies are selected. It’s also just as important that the chemistry between members of the agency team is equally strong and respectful; clients will notice when it’s not there.
- Expertise – As more agencies have built services beyond their core skills, so they are being judged against a wider canvas of capability. Where clear and market leading expertise is evident, this will always be considered favourably, particularly in marketing technology, data and specialist digital services.
- The work – Long gone are the days of agencies pitching to a phantom brief, with the winning agency then being given the actual brief on which to work. Brands want to see the answer in the final presentation; they want to buy a version of the work that will run, accepting that agencies are unlikely to nail it creatively at pitch stage. But if an agency comes creatively close, this goes a long way to that agency winning the pitch.
- “They get me and they get my business – This sentiment has been increasingly cited by CMOs who are looking for a trusted advisor, their go-to person in whom they are prepared to invest time and money.
And what can we conclude from all this?
If you’re a CMO, the best advice I can offer is for you to consider carefully why you’re thinking about pitching the business. Have you got the right agency but are not getting the best out of them? If so a pitch is unlikely to help resolve this. But if you recognise one or more of the 10 reasons cited, then it may be time to give AAR a call.
And if you’re an agency, do all you can to make sure that the reasons for a pitch being called where you are the incumbent are ones that are outside of your control rather than ones you could have foreseen and managed. Easier said than done, I know.