Open RFPs – is it fair on the agencies?
By Editor on Sep 4, 2007 in clientservicing, industry
Request for proposals (RFPs), or open pitches from multiple agencies that companies seek whenever they want to hire one has been the norm in the industry for decades.
What happens typically in a RFP is that a client company sends out briefs to multiple agencies and invite them to present their recommendations based on that brief. In such RFPs, there can be two three rounds of meetings with the potential client company. The first round might involve say ten agencies presenting their credentials to the client company, which will shortlist around say three-four agencies. Now these three-four agencies will come back again in the second round with their understanding of the client’s business and what they can do for the client. All financials can also be discussed at this stage. Then finally the company chooses which agency suits the best- creativity and money wise to conduct its PR campaign. Finally when an agency gets selected, it blows the trumpet horn and walks off with the new account in their kitty while the rest had to accept their defeat and wait for another time, another pitch.
This seems alright. May the best win. But there are those who abuse the system. There are companies whose corporate communications departments regularly sends out RFPs to PR agencies only to get a round of fresh ideas without any intention of hiring any agency.
I wonder how much resource do PR agencies put in when they set to work for such RFP pitches. Working on a proposal can be taxing – it requires manpower, time, research, and creativity. All this means money spent. Some agencies even conduct multi-city media polls and put the results in their presentation to impress the potential client. Many professionals in the PR industry sulk at the idea of toiling for and showcasing creative outputs before a client sign-on, but have given into it because that was the practice everywhere. But is it fair? It is not uncommon to see a particular idea that you have suggested in you PR plan being implemented by another PR agency. What does the industry say?
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On Sep 4, 2007, K. Srinivasan said:
This is a wonderful article. I have today generated a debate on this issue in the prpoint group and image management group. Many senior professionals in the Agencies have shared such practices with me. I was waiting for an opportunity to debate this issue. Now, that I saw your article, i have initiated a debate
On Sep 5, 2007, Anonymous said:
RFPs which look at the PR consultancy’s understanding of the business environment a client is operating in is a good idea. As far as RFPs with ideation are concerned, Consultancies should ask for a pitch fee which if the account is won by the consultancy can be adjusted against the retainer, and if not, it would be fee earned for work done. Putting this into practice will also enable PR consultancies to gauge the seriousness behind an RFP and clients will also understand that for PR consultants time is money!
It would be great to see clients apply the same methodology towards their advisors such as KPMG/PwC and the like.. surely they would not put forth a strategy without agreeing on fees and signing on the dotted line!
On Sep 5, 2007, hh said:
Thanks Mr. Srinivasan. Yes, it will interesting to see on the group what people say about it.
Pitch Fee is a great idea, but how practical is it, I wonder. But if the PRSI, PRCI and PRCAI work together on this, maybe the industry can work together on putting this practice in place. Individual agencies wont be able to do anything much.
On Sep 5, 2007, philgomes said:
One time, I actually told a company (who went with another agency that executed some of my ideas) “Hey! When your agency runs out of my ideas, give me a call!” Never heard back. Lesson learned, though.
On Sep 5, 2007, hh said:
Good one, Phil.
On Sep 5, 2007, David Kutcher said:
RFPs set up lots of internal argument, especially when you feel you’re being asked for spec-work. I believe that the trick to being successful with RFPs is to be as selective as you can and only respond to the ones that you objectively believe you have a good shot at winning. In order to do that you need to have a large selection of RFPs to choose from. Try heading over to the RFP Database as a place to find lots of projects to potentially bid on, but also trade in those RFPs that you decide aren’t the best fit.