Ditch the lengthy and expensive new business pitch, says Forrester

“Agency reviews and the dysfunctional process that accompanies them cost agencies and (by proxy) their clients a whopping US$12.5-billion per year,” say Jay Pattisall and John Arnold, two senior executives at Forrester, in a recent blog post.

“That amount nearly equals the revenue of the third-largest global agency holding company. It’s no wonder that 76% of US CMOs indicate that their company’s overall 2023 marketing budget is higher than it was in 2022. Marketers are indirectly funding pitches,” the pair emphasise.

Beyond the costs, the process of selecting an agency is untenable. Procurement-driven reviews often disqualify perfectly capable agencies with cost-only criteria, given that 76% of chief procurement officers prioritise reducing costs. 

Agencies over-invest time and human capital

“The marketers in charge of managing their agencies often come to the process without adequate preparation. Agencies themselves over-invest time, materials and human capital in high-pressure, new business activity. 

“And despite the best of intentions, the conventional consultant-led selection process is lengthy, laborious and overengineered,” Pattisall and Arnold say.

The pair believe the answer is to reframe pitches into paid projects. 

“Design paid projects to facilitate agency selection rather than allowing gratis proof-of-concept collaborations where neither party has real skin in the game. 

“Clients complain about service. Agencies complain about margins. Rather than severing the relationship, focus on preserving it by scoping and compensating pitch consultants to help manage the ongoing productivity of client and agency alliances — not just the selection.”

In this model, Pattisall and Arnold say, pitch consultants become partner consultants, leveraging years of consulting experience to help CMOs select and maintain healthy working relationships.

You can read the full blog post here.