Agencies and clients waste far too much money and time on pitches each year, says Andy M Turner
15th May 2012
New business pitching is a time-consuming, frustrating and frequently disappointing ritual that’s long overdue an overhaul. It’s also costly; even more so after it emerged last month that hugely-indebted BAA wants agencies to pay up to £5,000 to bid for its £4m PR budget, apparently to cover the company’s compliancy costs for EU tendering rules. The only good thing I can see about this is that at least it’s visible; usually they are hidden and therefore pass unnoticed.
Two years ago the PRCA set about measuring the time its member firms spent on a typical new business pitch. Around 50 PRCA firms were surveyed and the median answer was 20 hours. In a blog post at the time, I drew on other PRCA data, and a few reasonable assumptions, to estimate a conservative annual cost of this per agency. The answer was just over £50,000; or the total remuneration costs of a good account manager. Some think that’s way too conservative.
If you are a buyer of PR agency services, chances are by now you’re thinking “so what, why should I care what it costs suppliers to sell to me?” I’ll respond to that in a moment with what I think is the most compelling answer, but first, think about the cost of management time involved in organising an agency pitch; all those meetings involving various internal stakeholders. And it’s not just the time involved in multiple pitch rounds, but the meetings about the meetings too. Then there’s a secondary hidden cost because the managers involved are diverted away from doing more productive, beneficial work for their employer.
If that hasn’t got your attention, here’s something that ought to. Who do you think ultimately pays for an agency’s cost of pitching? Here’s a clue: it’s not the agency itself. Yes, dear clients, it’s you! Take note BAA: agencies don’t simply swallow those costs; they pass them on indirectly through the fees they must ultimately charge clients for their services (if they wish to stay solvent!). Once again, that’s a hidden cost. And if you’re one of those clients who likes to call beauty parades with five, six or sometimes even more agencies, think for a moment about the unintended consequence of that: you’re unwittingly driving up the costs for yourself and everyone else. This is probably the exact opposite of what you thought would happen.
I wonder how many clients and their colleagues in finance or procurement realise this? Is there a better way? There is, but for the PR world to cure itself of its costly addiction to pitching it will take courage, imagination and confidence. Some might argue that an end to the theatre that is pitching will make PR less exciting, but I expect they’d be outnumbered by all those who resent the hoop-jumping, dog-and-pony-show posturing that pitching so often entails. Let’s hope that one of the positive outcomes of our current recessionary times, with its attendant focus on costs, will be the beginning of the end of the beauty parade era.
Andy M Turner is a former PR agency director and owner. He has been a pitch-free independent consultant since 1998 and during all that time has relapsed only once.