The REAL Problem With The Client/Agency RFP Process

By Aaron Goldman

Appeared in MediaPost's Search Insider

I had a notion to pick up the thread Gord Hotchkiss started about emerging applications of search but, once again, Steve Baldwin, derailed, er... inspired me. In his last column, Steve discussed the issues he sees with the current SEM agency procurement process -- namely, that it's comprised of tactical responses to long questionnaires created and evaluated by client in-house search personnel.

When All You Have is a Hammer, Everything's a Nail

While I commend Steve and George Michie -- whose Search Engine Land post Steve referenced -- for casting a spotlight on this very dysfunctional process, I don't think the answer lies in asking different questions in the RFP or reassigning responsibility for SEM agency selection. The problem with the process right now is the process itself.

And it's not just agencies that are dissatisfied with the status quo. A recent survey of 184 client marketing execs revealed consensus that the agency search process is "too time consuming," citing the quandary, "you're told so many things that you're not sure what to believe."

I recently posted a 4,000+ word manifesto on my digital marketing blog outlining the glitches in the current client/agency RFP system and a step-by-step guide to fixing them. That post covered broader pitches involving full-service creative and/or media AOR reviews, so I'll tailor it here to SEM-specific RFPs -- and try to do it with less than 1,000 words.

Reinventing the Wheel

Let's do away with the shuttling of paper back and forth between client and agency in the RFP process. Not only is it eco-unfriendly. but it's the cause of a major pain point cited by clients in the aforementioned survey. How can you know what to believe when you don't know who wrote what you're reading? (Hint: It ain't the day-to-day person that'll be working on your business.)

The only people qualified to tell you just how good an agency really is are their current clients. So, rather than asking the agency to respond to a list of RFP questions, let's have that agency's clients respond via 30-minute interviews. Who better to answer questions like, "Is the agency able to scale results year-over-year?" or "How often does account management staff turn over?"

Making a List, Checking It Twice

Another source of friction in the client/agency RFP process is how the considered set of agencies is chosen. As it stands, there's no definitive source of agency rankings with unassailable methodology. Sure, Ad Age ranks the top search agencies by estimated revenue (which is a crapshoot given most agencies can't disclose these figures) and you have the Forrester Wave report that evaluates select search firms on criteria like "campaign planning" and "executive vision" -- but these lists don't (and can't) provide a true indication of clients' overall satisfaction with their agencies.

I've become quite enamored with the Ultimate Question as a means to gauge how effective a company is at providing value to its customers. The idea is that responses to the question, "How likely is it that you would recommend this company to a friend or colleague?" can tell us more about that company than any exhaustive survey ever will.

I propose the creation of a third-party system that audits all clients at each agency on a quarterly basis, gathering responses to the Ultimate Question. This data would then be made available to clients when deciding what shops to include in their RFPs.

It's Not Me, It's You

The next step in improving the RFP process is to do away with all the speculative work that's required of agencies. Whether it's strategy development, full keyword list builds or performance projections, it's not fair to ask agencies to produce this without proper time and data disclosure to craft accurate solutions -- not to mention, turn all this intellectual property over to the client without compensation. It's also not fair to ask agencies to pull their people off current accounts to spend three to four weeks working on a new biz pitch.

My answer? Changing the scope of the RFP presentation round from "What will you do for my business?" to "What have you done for another business?" Anyone can make wild claims and promise, but only proven case studies can show prospective clients what they can expect from their new agency. Furthermore, I propose the presentations be attended by the actual client that the agency is offering up as a case study.

You Break It, You Don't Have to Buy It

The final component of my RFP makeover is to set some guidelines around how scopes of work and fees are developed. Rather than ask agencies to determine pricing during the RFP process based on limited information, let's have clients issue non-negotiable first 90-day SOW and fee requirements with the RFP. At that point, agencies can either opt in or out.

Once the winning agency is selected, the 90-day term commences and, at the end of that period, negotiations take place for ongoing scope and fees. Now, both sides are armed with the ammo needed to make sound decisions for their business. Should the client and agency not be able to come to terms at this stage, an industry-standard severance fee would be awarded to the shop and the two would part ways.

The Devil's in the Details

I've only scratched the surface in this column describing the system I think will create a more perfect union between clients and agencies. On my blog, I go into further detail about the specific parameters required to make this process work and list the pros and cons as well as barriers to adoption (chiefly, the fact that it puts most of the burden on clients rather than agencies.) I'm eager to hear people's thoughts on my proposal and encourage you to comment here or at Digital Sea Change in the hopes that we can collectively build a more effective RFP process. As James Ingram sang, "There's gotta be a better way."


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