Let’s talk about the ‘m’ word
A recent survey – you know, one of those surveys that’s perfect fodder for talk show presenters on LBC – revealed that people in the UK find it easier to discuss mental health and their sex lives than they do money.
The report suggests that despite wider societal breakthroughs in more openly discussing personal subjects, it appears that money is still seen as off-limits as a conversation topic in the UK.
This appears to be no less the case when it comes to brands pitching their business and, perhaps, understandably so.
Faced with the prospect of pitching agencies focusing their collective attention on the strategic and creative opportunities to be addressed, I can understand why the subject of fees, FTE’s, bonus schemes, contracts, commercial arrangements and all else relating to money can be somewhat less appealing.
In my experience, there are three reasons why marketers don’t want to talk about money, be it for marketing, comms, production, media or agency fees: this last one generally being of most interest to an agency.
1. They are unable to give you a budget
It might seem unusual to not know what budget you have, but sometimes the reasons for this are understandable.
- Marketing must pitch for budget alongside every other area of the business
- Marketing hasn’t previously undertaken the type of comms activity being pitched and is looking to the agency for recommendations
- The business is a start-up and engaging the services of an external agency for the first time, they don’t know what to budget
What can an agency do to help in such circumstances?
Always talk to them about this – and talk early in the pitch. Share your experience of how other businesses in similar circumstances have approached the issue of budgets. Reference advertising to sales norms or benchmarks, ideally for the category. Share your agency’s PBC (Proprietary Budget Calculator) created for such circumstances. This may sound like a daft idea, but I suspect it would be well received.
In such circumstances the client will welcome some help from agencies and is more than likely to be open to the suggestions you make, and in the agency’s quest to win the pitch, this will add to a sense of being ‘an agency I want to work with’ amongst the client team.
2. They are unwilling to give you a budget
I’ve never understood this attitude, but from time to time we still come across it. Marketing or procurement have clarity about the overall budget, what they are looking to pay in agency fees, production and media, but do not want to share any of this information. Why?
I think the answer lies in a misguided (in my opinion) belief that this will both reduce their ability to negotiate effectively and only encourage agencies to make recommendations that spend all the available budget for the maximum fee.
So, what’s to be done?
You can still apply proxy assumptions to how you approach the pitch, again sharing them with the client team so they have an opportunity to comment or correct should they choose to do so.
But if this is not forthcoming you should apply the criteria that any agency should have in mind in such circumstances: financial stability, predisposition to marketing and advertising, reputation (company and individuals), previous knowledge or working relationship, the appeal of the business, brand or sector upon which to base your decision.
I also think there’s a more qualitative, but no less insightful approach you can take: trust your gut instinct.
What do you feel when you eyeball the decision-maker? This should tell you everything you need to know.
If it were me in these circumstances, I’d like to think that I’d walk away. Every time. Because I wouldn’t want to work with a business that didn’t respect my agency sufficiently to share some basic information about the opportunity for which my team is prepared to bust a gut to try and win in a pitch.
Easy for me to say. I don’t have the growth targets or reporting lines that you do. But I suspect that there are too many occasions when an agency pitched without knowing the budget and regretted it after the event, win or lose.
3. They haven’t thought about the budget
To be fair, I should probably add the word yet or sufficiently to the end of the statement.
In these circumstances there’s a recognition and understanding that, when pitching, budgets are important for agencies to know about and understand as this information will help inform and craft the response.
So, although next year’s budget may not be locked down, you can probably get access to what the client has invested this year across the different elements of marketing activity.
And the reality is that year on year, most brands’ marketing looks more similar than different to the previous year. By taking the current year as a proxy, you’re not going to go too far wrong in your assumptions.
You can also apply the same thinking as in the first scenario – where they are unable to give you a budget – and such an approach will probably be welcomed by the client.
When it comes to pitches, I’ve distilled everything that an agency wants to know from a prospective client down to two questions:
- What is it you want us to do for you?
- How much are you prepared to pay us for our services?
Of course, there’s lots of detail behind each of these, but I think fundamentally it boils down to these two questions and, in preparing for pitches, brands can often focus much more on the first question, and less so on the second.
If that’s the case, hopefully there’s some useful guidance here depending on the circumstances, ignorance, unwillingness, or omission.
And if ever AAR comes to you with a new business opportunity where we haven’t asked the money question, you should call us out on this!