good business practice or a bad idea for all concerned?
Just recently it was reported that a well-known Singapore mall asked nine leading creative agencies to pitch for a brand building campaign for the mall, worth a six figure sum. No pitch fee was offered, and the agencies were asked to come up with ten ideas… each! The reason it appeared in the press is that some of the agencies involved got the impression the client was simply scamming them for free ideas, and they already had an agency on board, who they assumed would end up implementing the ideas. On this basis at least one of the invitees refused to participate.
We think this is good news and bad news. Good news in that this story created a stink which got into the press – not so long ago this would have been considered the normal way for clients to buy creative services, and it wasn’t thought unprofessional. Now the game is changing and most clients and agencies seem to understand this practice is not simply unprofessional, but counter-productive for all parties. But it is still bad news in that firstly, clients as high profile as this mall owner (a leading media group who should have known better) are still operating in this exploitative, disrespectful manner, and secondly because the majority of the agencies invited still participated.
So what is the problem with free pitching – why is it such an own-goal?
The problem with free pitching
Nobody would dream of asking a tailor to run up a number of different suit styles free of charge, or a furniture maker to build a few chair designs, before deciding which one to buy, or whether to buy any at all! But that is exactly what some clients do with creative agencies, all the time.
At its most basic the free pitch is rather like the method most people adopt when buying off- the-peg clothing – the customer wants to see what they are getting and “try it on” before they choose to buy, in order to eliminate any risk in the selection process. However, creative solutions are not off-the-peg, they have to be conceived through a detailed process which is uniquely tailored to a client’s needs, and their brand. This takes time and requires a lot of investment in communication between the client and the agency to produce the right results. The kind of investment that neither agencies nor clients are usually willing to put into a free pitch. So selecting a creative consultancy or a branding solution this way is full of pitfalls that will inevitably result in substandard work. Rather than eliminate risk for the client, it creates it.
To be clear, there are four reasons why we think free-pitching is a bad idea, and an unacceptable business risk:
Free pitches will never achieve the results that clients expect, nor the levels of professionalism to which agencies are committed, because of the way they are set up. Pitch briefs are often prepared without the involvement of senior management, and are normally conducted in a mass meeting in which no agencies will dare ask questions, for fear of revealing their thought processes to competitors. They will be unlikely to follow up with questions after the meeting either, for the same reason. In Singapore many clients insist on revealing questions asked by agencies – and the client’s answers – to all of the contestants, in the name of so-called ‘fairness’. As a result, the contestant’s responses will be based on a woefully inadequate understanding of the client’s business, culture and brand. Agencies are also unlikely to devote enough time to a pitch, for fear of compromising the time they spend on genuine fee-paying clients. So the work is likely to be both ill-prepared and inappropriate for the client’s needs.
Creative consultants of all types are professionally trained, and make their living by selling their creative talent and intellectual property. To ask them to give away their creative work without payment shows a complete lack of respect. Moreover, to ‘save time’, clients often ask contestants to send their ideas in, so agencies can’t be sure their work has even been seen, let alone understood. There is also the risk that their ideas will eventually be ‘stolen’ by the client, ie used but unpaid for. It is said that in psychological terms, people value what they pay for. As the free pitch literally values the intellectual property of contestants at zero, the practice seriously undermines the value and the perception of the creative profession as a whole.
3. Sound business sense
Creative agencies are commercial organisations. They need to make a profit. Free pitches take time, in fact for those agencies who think they need to do it, they might spend as much as half their billable time on them. But even a ‘good’ agency would expect to win no more than half their pitches, and the failures represent lost time and lost income. If an agency is able to win projects on the strength of their credentials, why would they do a pitch anyway? The best agencies will therefore not be willing to do a free pitch, because it doesn’t make any sense.
In a world where effective time management can make the difference between business success or failure, we think the free pitch is a wasteful and inefficient way to select a creative agency. Not only are multiple agencies of comparable standards required to duplicate their efforts, from whom only one will be selected. Clients waste a lot of time in briefing them and reviewing their submissions, time that would be much better spent by briefing only one agency who have been selected on the basis of their credentials and ‘fit’ with the client.
What’s the alternative?
Generally, we believe the best way to choose a creative agency is on the basis of their reputation and track record. If you meet them and see how they have handled similar projects for other clients, you should be able to assess how appropriate they are for your task. So you should ask them to present their credentials and a proposal in which they describe how they will approach the task at hand. You should also meet the team they will assign to the project, to see how good the chemistry is – you may have to work together for quite a while.
However, we recognise that there are times when clients want to eliminate as much risk as possible in the selection process, and therefore will want competing agencies to carry out some creative or other preparatory work in addition to or as part of their credentials presentations.
In this case, we generally recommend that no more than two or three consultancies are invited to participate and a fixed fee is offered to each to cover their time and costs. The fee should be equal to the value of the work required and should be the same for all the agencies involved.
We also recommend that there is a detailed face-to-face briefing, approved by the key decision maker on the client side, and contestants are given the opportunity to ask follow-up questions then or at any point thereafter, without their questions or client answers being revealed to the other contestants.
Finally we recommend that each contestant is given the opportunity to present their design concepts to the key decision maker, in person, so the work is properly explained and they are there to answer any questions which arise.