A new angle on new business
Over the last 17 years I’ve probably heard all sides of the debate about how the new business merry-go-round can be improved, amended, or re-engineered.
I’ve attended numerous industry meetings, been part of several working parties – even originated some of them – and could write a best practice guide to writing best practice charters! The debate has become circular and, ultimately, clients and agencies will do what they want.
But I think I can offer up a genuinely new perspective on the debate that would lead to real behaviour change amongst clients and agencies alike.
So here goes…
What if all agencies, or at least to start with, those that are members of their industry bodies (IPA, DMA, MCCA etc) agreed that if any of their own clients were going to pitch the business, they, as the incumbent, would not participate in the pitch.
Bear with me as I don’t think this is as ridiculous as it may first appear.
Reasons why clients pitch their business
The reasons given for clients going to the market to find a new agency are familiar to us all and can largely be categorised into the following groups:
- Dissatisfaction with some aspect of their current agency’s level of service or output
- New marketing director syndrome, an obvious and understandable way for a new marketing director to make an impact on their brand
- A genuine new need, requiring different expertise or resource
- An organisation’s governance that reviews external partners on a regular, statutory basis
- It’s just time for a change (a sentiment that clients themselves find difficult to justify but still leads them to explore the market)
Whilst governance is a growing trend in terms of reasons to pitch – it’s no co-incidence that its growth mirrors that of Procurement’s increasing involvement in agency appointments – the reason that clients share with us for pitching their business predominantly fall within the overall category of dissatisfaction.
Back to the argument…
If it was known by all parties that the incumbent agency would not participate in a pitch to retain the account it would give significant pause for thought to both clients and agencies alike.
From the client’s perspective
If clients knew that calling a pitch would guarantee that they would no longer be working with their incumbent agency, the decision to go to pitch might not be taken as readily. Immediate concerns spring to mind:
- All retained agency knowledge and insight would be lost
- A new agency will need time to transition, embed and get up to speed
- The out-going incumbent will be free to go to the market and potentially work with a competitor
Given these concerns it is likely that, before making the decision to pitch, a client and agency would take the opportunity to do all that they can to work through the root causes of the dissatisfaction to try and address and eradicate them.
Ideally, in every business partnership there should be an ongoing programme of performance evaluation and feedback so that any issues that come to the fore can be identified and addressed at the time, rather than coming as a surprise when a rift becomes evident or the relationship fractures.
If both the client and the agency successfully work through the issue then the distraction of a pitch has been avoided and each can continue to build on what brought them together in the first place.
But if, after all of this, the client is still of the view that they must put the business up for pitch, then they do so knowing that they and their agency partner have done all that can be expected of them to make it work between them and maintain their relationship.
And what of the agencies?
An incumbent agency would be given every opportunity to work things out with their client team as opposed to defending the business in the cauldron of a new business pitch, where there are no guarantees and anything can happen.
Should things not work out and the client chooses to go to market:
- The incumbent cannot complain about any lack of opportunity to retain the account before a pitch
- The agency can avoid the expense and time invested in a pitch it has a less than one in four chance of winning
- All other agencies invited to pitch will know there’s a genuine opportunity, an account to be won that can’t be written of as just an exercise in kicking the incumbent if the incumbent retains their account
Is there a downside with this approach?
Not one I can see for the client or incumbent agency.
Could it reduce the number of new business opportunities in the market overall? Quite possibly, but we’re all familiar with the research that longer term client:agency relationships are more preferable, productive and profitable for all concerned, which has got to be good all round.
However, there are three flaws I can see in this approach. The first is in cases where, for statutory or governance reasons, a client organisation reviews their agencies as a matter of course, with no implied dissatisfaction.
The second is in the case of a media review where there’s an imperative to ‘improve value’ (to give it a polite description). A competitive pitch is more likely to deliver a greater improvement in media discounts than prices offered by the incumbent agency alone without the competitive threat.
The third is in scenarios where a client is looking to pitch within a roster of incumbent agencies, rationalising the number of agencies they work with.
But we work in an industry full of smart people, I’m sure together we could figure these things out.
If my thinking is sound, what next? Will this idea be nothing more than the latest talking point around a topic that been talked to death, or will someone take up the challenge, see the benefit of the idea and make it happen?