Drowning in RFPs

Receiving an RFP is like getting a party invitation — it’s flattering. We agency entrepreneurs are eternal optimists, genetically programmed to think this could be the big one. So there’s always a strong temptation to RSVP that we’ll be there, on time, wearing our fancy shoes.

But thankfully, most of us optimistic risk-takers have a party pooper working at the agency. This right-hand realist throws cold water on each invite, reminding us that we spent 20% of last year’s total man hours answering RFPs only to win one — a $3 million account, supposedly, but it’s been a year already and they’ve only spent $200,000. Oh yeah, that reality. Thank you for coming today.

Not that RFPs are a bad thing. When brains and talent are what a client is trying to buy, asking agencies to show up and show it off is a good way to sample the merchandise. And we agencies certainly love the opportunity to introduce ourselves to potential new clients.

The problem with today’s RFPs is that too many of them never turn into real business for anyone. We’re happy to say, “Oops, lost that one to Upshot.” Or 141. Or Ryan. Happy because we improve from the losing, money comes into the industry, and clients conquer marketing challenges and get results. But unlike throwing an RFP party in advertising, where not choosing an agency at all would draw wide criticism, the marketing services projects being RFP’d are smaller and under the radar. Throw a bad State Dinner, everyone knows. Throw a bad bar-be-que; who cares. Except the guy who paid for all the ribs.

And therein lies the problem. Since agencies spend a lot of time and money responding to an RFP, it shouldn’t be much to ask that the client actually have a real project to award. Many clients use RFPs quite responsibly, of course, and the process results in effective new client/agency partnerships. But we’re seeing an alarming trend: about two-thirds of the RFPs we’ve touched in the past two years haven’t resulted in money for anyone. Or, the size of the project awarded was substantially smaller than the specs promised.

What’s happening in these situations? We can usually chalk it up to one of the following:

• The decision-maker(s) didn’t have the authority to issue the RFP.

• The boss didn’t help write the RFP or review the submissions, but after they were in, said, “that’s not what we were looking for…do it again, right, this time.”

• The decision-maker used an RFP to try to attract budget for a pet project, and the ploy didn’t work.

• The decision-maker used an RFP to try to get his boss to try something new, and the ploy didn’t work.

• The decision-maker tried to use an RFP to figure out what she really needed (meaning, she applied the wrong business process to the problem).

• Only a few of the decision-influencers participated in the RFP process, and the rest came in later to squash the results.

For the agency that invests $50,000 to $100,000 in hours answering a request that turns out to be nothing, it’s like being invited to a wedding that goes belly up. You buy a gift, but the ill-mannered bride and groom skip the “I Dos” and keep the presents. Ms. Manners would have a fit, and so should the clients, because ultimately the cost of all this industry-wide wasted time makes its way back to them in the form of higher rates. To settle the “do we go or stay home” debate at our agency, we looked for similarities in the RFPs that never came to fruition for anyone. Now, we only submit when we can get a positive answer to all 10 of the following questions:

1. Did we receive the request in the mail, or through a phone call? A client that doesn’t have time to personally invite the agencies is either inviting too many for us to have a good shot, or isn’t prioritizing the project (and therefore, neither should we).

2. Are we invited to present our submission in person? Hiring an agency is all about investing in people — their individual talents and experience and the collective way they can or can’t work together to solve client problems. When a client asks us to lick a stamp instead of show up, it often spells trouble: perhaps the review is a formality to justify the incumbent, or the client doesn’t understand the importance of human chemistry.

3. Is the RFP clear and definitive in its scope, and does that scope coincide with our core competencies? The client should be able to list desired deliverables or clearly define the problem to be solved. If the RFP is vague, we’ve found that the chances for a wedding without a marriage go way up.

4. Are we allowed to call with questions? We’ve noticed that clients with a genuine need to start a new relationship would rather give good direction than waste time with off-target submissions.

5. Is the client willing to quote a firm budget, and is the free work required commensurate with the potential reward? Some RFPs ask for weeks worth of free work with no clarity as to what’s at stake. To us, this is a red flag for a project without an approved budget.

6. Are we allowed to know who our competitors are, and are four or fewer competing? If more than about four agencies are involved, sometimes it means the client skipped a round of homework. Listening to capabilities pitches, visiting Web sites and calling referrals first can narrow the field, which in turn limits how many agencies will be doing a lot of free work, which shows that the client values that work.

7. Who is making the ultimate decision to spend money on this project, and is that person involved in the RFP process? We’ve found that if the person who has the ability to direct the money away from this project to something else is not heavily involved in the writing of the RFP and the agency interviews, the likelihood that dollars will never materialize goes up substantially.

8. Will the client be briefing the agencies on the brand’s background and issues? Clients who spend the time having their own team do a half-day or day-long briefing for each submitting agency are taking the process seriously, which means we should, too.

9. Will the client be choosing the agency for of its people and services, or is the client looking for the agency with the best idea? Too often, clients who are looking for the agency with the best ideas don’t hire anyone. They get the ideas they were looking for, and the incumbent executes.

10. Is the client willing to pay for our travel costs to compete? It’s obvious, but when a client is willing to help out with expenses, even marginally, it indicates they have a big project that’s a priority and has the approval of all involved.

Are we seeing things only from an agency point of view? Actually, we think many clients might find the Ten Questions helpful. If the answer to most of the questions isn’t favorable, might it be better to postpone your soiree until the house is in better order? Then, when you finally do invite us over, we’ll be sure to show up in our fancy shoes, bearing ribs.

Alison Glander is CEO of PowerPact, a marketing agency based in Richmond, VA. She can be reached at [email protected].