Pitchdoctors: Agencies need to learn to say no to clients in race to the bottom
Two of the region’s leading pitch doctors have told a Mumbrella video hangout Australia and the wider region is in a race to the bottom on price and urged agencies to stand up to clients, while marketers need to be better at communicating the value they create.
Darren Woolley, managing director of Sydney-based TrinityP3, and Singapore-based regional managing partner of Roth Observatory International, Richard Bleasdale, told the online discussion that more industry attention was needed on the topic from agencies, clients and also industry associations.
“It’s a difficult issue and there are some marketers who are less sophisticated and are driven primarily by price and in a that situation we do see agencies competing with each other on price,” said Bleasdale.
“I think the driver for agencies has always been new business. I think the market is saturated from an agency perspective — there are far too many agencies for the amount of business around — and really these days anyone can be an agency. So the (total) volume of agencies is an issue.”
In recent times in Australia there have been a number of agencies who have chosen not to repitch for business including MediaCom on PacificBrands and ZenithOptimedia on Lion.
Bleasdale said agencies needed to learn to say no to clients: “I fundamentally believe that agencies say yes far too many times when they should say no a lot more and stand up for what they believe in. And I fundamentally believe that the agency and industry associations have a much more important job to do to set some ground rules in the industry.”
TrinityP3’s Woolley agreed that it was an important issue for the industry.”Professional guidelines are important,” said Wooley, “But the interesting thing from a rates perspective is that agencies will be very quick not to lose the business because of price. They will have the short term view of winning the business hoping they will make up for it, because they are incredible optimists, down the track.
“The CEO (often) doesn’t see value — he sees cost. The tool of the CEO is procurement and the best thing a business can do in any environment is to minimise its cost base. That’s why procurement is often cast in the role of driving down the cost.
“We have marketers who are not conversive in the language of business and finance and are talking to the CFO but not in the way of the value that that budget creates.”
Wooley and Bleasdale also went head-to-head on issues such as pitch fees, pricing, how agencies can keep clients from looking elsewhere, and how Asia’s pitch scene differs from Australia’s.
Woolley is a scientist by background, who then became a copywriter, and later a creative director at JWT Australia. He founded marketing management consultancy TrinityP3 more than 14 years ago, and is increasingly doing business across the region.
Bleasdale, a former Asia Pacific CEO of Iris Worldwide and group MD of DDB Singapore, took the top Asia job at Roth Observatory International in November, when the company was formed from the merger of consultancies The Observatory and Roth Associates.
Totally agree. What is price after all?. Value, now that is something different. Fixation with price has lead to the downfall of a number of industries. Marketers need to read their history books.
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I see the average agency as just pure greed. I would like to see the average salary of a employee at an agency as well as the number of freelancers in the industry.
I see people working at agencies doing crazy hours on minimum wage, with their MD telling them that this is norm and that if they want to succeed they have to work hard and long. Often trying to glitz their workspaces with pools tables and fridges full of beer as if this is some kind of reward for working til10pm Monday to Friday on less than 40k before tax PA.
If they do win the pitch – they then outsource to a freelance account manager who then shops around for the cheapest suppliers then putting a 300% markup as if to say “our creative ideas are worth it” which are often taken from oversea’s work.
Perhaps they win an adward or two – which only the MD and friends are actually allowed to attend.
Clients can see this behavior which is why they are now more then ever shopping around for better ROI.
Agencies need to have a good look at themselves before shifting the blame on the client for shopping around. Perhaps improve your working conditions, be more open and transparent with your prices and cost, do more original creative work and stop with the ego bullshit as you might actually attract better clients who despite your cost will want to work with you…
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Why don’t clients set the fees first as part of the brief? It avoids the song and dance about cost. Clients already have an idea on what they want to pay, agencies can then decide if its worth it to pitch. Avoids a lot of heartache at the end
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The irony. Sometimes your client competes on price and sometimes on value. Agencies are no different. If you can’t convince a CFO of your value , how can you sell to business markets for your clients?
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Calm down Mikey.Jeeeeeezus it’s just a job .bex and a good lie down son.
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As a client, I am often speechless when an experienced agency person who has demonstrated clear value to my business is moved out of the agency and replaced by a younger, less experienced and unproven new turk boss with a bigger title.
They then proceed to dismiss best practices that were not created by them.: causing delays, increased costs, and general chaos.
When polite requests for resource remedies are rebuffed, we have no choice but to call for a pitch.
All these could have been easily avoided if agencies learnt to listen better and not fix what’s not broken.
There’s ‘gold in old’ and ‘new ain’t always better.
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Dear Client, all down to bottom line again. as a recruiter we are often faced with requests for juniors but the brief cannot be fulfilled without at least 5 years experience.
Some just don’t get it!
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One of the country’s top level business trainers told me that a good healthy client relationship is when you are eyeballing each other – rather than smiling at each other.
Agencies who go on about pitching should look at the way they, in-turn. get production companies to compete for their work. The process is generally ruthless, and often about price.
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Dear Rex
Thanks for validating my bug bear.
Calling for a pitch is not something we look forward to.
But it’s sometimes the last resort to ensure the agency ‘gets it’.
Our KPI is to deliver advertising solutions-not baby sit agencies who over promise and under deliver by letting kids play with loaded guns.
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Same old same old. Big Agency cuts fees here, backfills with “diversified services” there. The sooner Big Client uncovers the smoke and mirrors the better. Then perhaps we can all be fairly rewarded in an honest way.
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