Would being paid for proposals solve a lot of the issues of the pitch process? Here’s a bit of a utopian vision for a world where pitches have more value for everyone.
Ah — the pitch process. Drink it in. As fundamental a part of agency life as drinking and swearing. And often the inspiration for both. I’ve made my thoughts about how to run a better pitch process clear on INCITE recently and then PR Week ran a series of articles on the subject last week; but all of that discussion sparked a simpler, and potentially bigger question — should agencies be paid to pitch?
Yes. Yes they should. And here’s why:
The brands will get better proposals
Think about it. On the rare occasions our agency has been paid for proposals, we’ve been able to provide a fuller picture of the ideas — including delivery details that go beyond what we would normally provide to a client before they have committed to paying anything. Brands can be more prescriptive with what they want to see and even establish SLAs on the response when they are paying for it. Agencies may also use a portion of the budget to pay for deeper research or third parties such as designers to bring the concept to life. This added depth would provide huge value to clients and help them make a more informed choice between campaign proposals.
There will be fewer agencies involved (and fewer pitches)
It goes without saying that if brands are paying agencies, they are less likely to seek responses from dozens of agencies, and more likely to refine their shortlist through research, chemistry meetings and creds/background. This streamlines the process for both brands and agencies, as well as raising standards.
Also, a bit like a football club changing its manager, a pitch can be the default reaction to needing to change things up. If there was a cost associated to that, we might see brands less trigger happy and more open to other solutions born from collaboration and problem-solving. Indeed, incumbent agencies frequently win pitches, meaning the thinking was already there to be had, but the client used a pitch to elicit it. When all you have is a hammer, everything looks like a nail.
With a paid pitching process we might see more opportunity given to incumbent agencies before pitches are opened up, and when they are, the agencies entering as a wild card are at least rewarded for demonstrating their different point of view and feel less aggrieved with the client reverting to status quo.
The IP debate becomes simpler
When you are paid for your thinking, it means there is already value placed on it. Within paid pitch agreements, it’s possible to have payment terms for IP licensing included should the issue arise. It makes the whole thing more professional, and allows there to be black and white boundaries in place, contractually, before the ideas are revealed.
Paying to pitch can save you money
A lot of the cost of running a comms agency comes from the unpaid resource used for new business pitches. I think a lot of brands would be surprised to learn how much it costs agencies to respond to their brief. If agencies are being paid for their proposals, then there’s potential for fees to come down as agencies don’t look to claw back lost margin through their rate card.
“You can’t change things without changing them”
— Dave Trott
Given all this, and the constant whinging about pitches — why don’t all agencies insist on being paid for creative proposals? Well, the simple answer is because that means change, and change is hard. Brave, even. We need some people to step up to the plate.
Change is never easy, but if we don’t try, it’ll never happen. So here goes: a potential model for bringing value into the pitch process.
Feel free to tell me this is stupid in the comments — but hopefully it will spark a conversation that gets people suggesting solutions instead of excuses.
1. Everyone is paid a ‘pitch fee’ rather than an hourly rate
Hourly rates complicate the paid pitch process, with each agency potentially asking for different sums at different rates. Agencies should subscribe to a product fee for a proposal that is the same for all. You could go with a flat fee process that goes up with increments (but a lower % of the total contract value, reflecting the higher incentive for agencies to win it). Picking numbers out of the air, it seems reasonable to ask £3k per agency for a contract worth £30k. Then £6k for a contract worth £100k, rising to £8k for contracts over £200k. You are paid more because as the scope of the brief expands, but it becomes cheaper in comparison to the total budget for brands. I have used a very complicated algorithm to calculate these values — I have made them up. It’s literally just an example. I’m sure the PRCA would be able to create a cost model pretty easily from average rates and average hours that also feel bearable and good value for brands (having said that, they could have ended this debate decades ago and haven’t), but these example figures are designed to feel simple and palatable for all parties.
Although, obviously, these flat rates don’t cover the entire cost of pitching, they do make a dent on the investment required, and importantly commit value against the ideas being presented.
There may of course be regulatory hoops to jump through to be able to standardise pricing — but I’m sure there are solutions to this also.
2. The winning agency discounts the pitch fee from the first invoice
This allows some peace of mind for brands that they aren’t paying for work twice. It also reduces the total cost of the pitch process for brands. A three-way pitch for a £6k per month retainer will only cost £6k in real terms. A two-way pitch would be £3k (as long as one of the agencies was appointed of course).
3. Not all pitches are paid
Below a £30k total fee boundary, the pitch process could become cost prohibitive for smaller businesses. My suggestion is that for these pitches, things remain as they are — but it’s also far more likely that fewer agencies will be willing to jump into a ten-way pitch for a relatively small contract, so brands will still feel pressure to adhere to processes adopted for bigger budget briefs. Process that benefit them, as well as the agencies. For non profits and charities, agencies can elect to donate their fee…
4. Agencies can donate their fee to Offset Earth
Some agencies don’t believe they should be paid for the work that goes into a pitch if they don’t win it. Fair enough. In that case, they can donate their pitch fee to Offset Earth, with the comms industry measuring the value of their pitches in terms of acres of new trees planted to combat climate change.
There’s even a wild idea that agencies all sign up to donate their pitch fees to Offset Earth. There would be no change to the income structure, but our ideas would have a real value, and a real legacy. Potentially a reforesting an area so big it’s visible from space. Imagine that. The forest that PR built. This is what we’re looking into at Manifest — helping everyone feel good about the process whatever the outcome.
There may be some agency leaders that say they prefer pitching for free. These are people who either don’t value their own creative work, or more likely believe there is some commercial advantage to be had from being the ‘freebie pitchers’.
This will only be exposed as foolhardy if the majority of agencies step up and agree to charge clients to pitch. This is a call to those leaders in the industry to agree to sit down and chat about how we can make this work. For the discussion to open up to action.
This is where the discussion has traditionally ended. With everyone looking to the sky and whistling, while the status quo rolls on… let’s see how it pans out this time.