10 ways to improve the client/agency RFP process

By Aaron Goldman
Appeared in iMedia Connection's Best Practices

Having spent more than 10 years responding to client and agency RFPs, I've come to the conclusion that the RFP should be renamed "CYA." While the intention behind the RFP is good -- creating a structured process whereby solutions can be evaluated objectively -- the execution is not. And it is often a complicated, time-consuming process in which firms wildly overpromise and are judged largely on price.

For the client, it's truly CYA, with rigid scorecards that allow all constituents to rate agencies and determine a winner. For the agency, it's another form of CYA altogether -- as in "See ya! Sold you the dream, now here's the team."

Typically, the formal RFP process plays out as follows:

The client scans lists of AdAge rankings, RECMA billings, or the Gunn Report to determine 15-20 shops they want to consider. The client issues an RFI for agencies to fill out some basic info, and agency new biz teams respond.

The client whittles the list down to five to seven shops to receive an RFP. The client sends questionnaires for the agencies to complete, along with requests for case studies, reels, references, etc. Each agency new biz team pulls client service, strategy, and creative personnel off billable accounts to compile the deliverables.

The client, or more appropriately, the client's scorecard, determines three finalists. The agencies trot out executives, senior strategy personnel, and anyone with a Ph.D. for the final presentation. The agency shows spec creative, media plans, and fancy dashboards. The client and agency haggle over scope and price. The client awards the business. Both sides feel slighted. The agency scrambles to staff the account.

The client rinses and repeats every three years, and to quote the "Mad Men" character Roger Sterling: "The day you sign a client is the day you start losing them."

Needless to say, it's time for the current RFP process to RIP. The following are 10 ways I think we can improve the system.

1. Set industry standards.
We've got all the acronyms -- ANA, AAAA, DMA, IAB, even the BBB -- banding together to self-regulate behavioral targeting, but it's every man for himself when it comes to the client/agency RFP process.

Sure, the AAAA has put out some position papers on the topic, and there are agency search consultants whose sole job it is to help marketers navigate the treacherous RFP waters, but all they do is stick more fingers in the dike.

Just as the IAB stepped in to create standards for online ad specs, someone needs to put some parameters around the RFP process.

As it stands today, each client and/or agency search consultant runs pitches in a different format -- RFIs, RFQs, RFPs -- oh my! And there's nothing worse from an agency standpoint then advancing through three rounds of scrutiny only to be pitted against competing firms in a real-time online auction to see who can offer the lowest rates.

2. Create third-party audited lists of agency size and client rosters
The first order of business for the acronym du jour that decides to tackle this hairy meatball should be compiling a list of all the agencies in this industry with the number of employees at each firm and their full client roster. Then each shop should be required to submit to an audit by the likes of PricewaterhouseCoopers to ensure that the information is accurate. Sorry agencies, no more hiding conflicts or using freelancers to inflate your numbers.

3. Create third-party audited lists of client satisfaction
If the first step is compiling a master list of how big each agency is and who they serve, the second is getting a read on how good a job they do for their clients. Currently, clients choose which shops to RFP based on metrics like billings-size or awards received. In my mind, the most important metric of all is how satisfied an agency's clients are.

There is no better way to gauge satisfaction than by asking all clients to rate their agency quarterly on "The Ultimate Question." How likely is it that you would recommend this company to a friend or colleague? In his book on precisely this topic, Fred Reichheld argues convincingly that the answers to this No. 1 question alone are as telling as any elaborate customer survey.

4. Get rid of the RFP questionnaire
Hmmm, replacing elaborate surveys with the No. 1 key question? Sounds like a great idea. How else can we apply that? As an agency new business executive, there's nothing more dreaded than the five-page questionnaire outlining 50 different items the client would like you to address.

As a member of the client's RFP committee, I can imagine there's nothing more dreaded than reading 50-page responses from five different shops. So here's what I propose: RFPs should include only one question to the agencies being considered… "Do you want to pursue this business?" A simple yes or no will do, thanks.

5. Have other clients respond to inquiries instead of the agency
Clearly a one-question RFP is not sufficient as clients need more information to determine which shops are a good fit. So we can dust off the old agency questionnaire. Here's the twist though -- those questions should be answered by a select group of each agency's clients, not by the agencies themselves.

The only way to cut through the smoke and mirrors that agencies offer up in the pitch process is to not give them the chance to concoct it. Besides, the folks that are best qualified to answer questions like, "Are you able to help your clients achieve sustainable growth?" or "How do you keep your clients on the cutting edge of emerging platforms?" are other clients of that firm. So let's have the client issuing the RFP choose a couple clients, and even a former client, from each agency (using the third-party audited list) with whom they'd like to conduct a formal interview. Then they can get the straight poop on each firm and save a bunch of trees in the process.

6. Have clients co-present with their agencies
Let's take the whole client-to-client thing a bit further. Imagine a final RFP round featuring a case study presented by both the agency and the client that the case is built on. What better measure of true agency/client chemistry? And what better way to ensure that agencies don't have to pull their best people off their current accounts to handle pitches? Instead, they get the opportunity to dig even deeper into their clients' businesses to identify key insights and merchandise their success.

Why would a client agree to participate? Simply put, what comes around goes around. Would you rather help your agency win new business (which adds to their marketplace clout and allows for further investments in research, technology, etc.), or have them pull your senior strategy folks off your account while they pursue another client?

7. Do away with the speculative work required in the pitch process
Another benefit of the client/agency case study tag-team is that it grounds the agency's pitch in actual results, not speculative work. Under the current system, agencies are required to deliver customized strategy, creative, and media plans for the prospective client as part of the RFP process. This is unfair to agencies on two levels. First, they rarely have enough time or background to prudently develop these materials, and second, they are rarely compensated for this valuable intellectual property.

8. Limit the amount of data required by clients to disclose
The tit for the aforementioned tat is that clients should have the right to protect their confidential info and not divulge it to anyone except the winning agency. Sure, all shops included in the RFP sign NDAs, but rarely are breaches of such contracts revealed much less prosecuted. I've even heard of situations where agencies take the spec work they created for a pitch and sell it to a client's competitors. When that happens, can that agency really be relied upon to "forget" everything it learned about the original client?

9. Create trial periods before fees/scope are determined
One of the biggest travesties of the current RFP system is that it requires clients and agencies to negotiate price and Statements of Work prior to doing business together. Yes, I realize that's the way the world works, but it doesn't have to be that way. What if clients set a non-negotiable fee and scope for the first 90-days of engagement prior to releasing the RFP? This would outline the exact deliverables expected of the agency -- for example the initial strategy, creative, and media plan that now falls under the realm of the RFP. As per No. 4 previously, agencies can either opt in or out of the RFP after reviewing the 90-day requirements and fees.

Then, once the RFP plays out and a winner is chosen, the 90-day term commences and both sides are given a chance to really get to know each other. The client can evaluate if the agency is as good as advertised, and the agency can peel back the onion on the client's organization and determine what level of service they really need. It's at this point, with both sides armed to the teeth, that true negotiations can take place.

10. Set industry standards for client/agency termination
This article has now come full-circle. What started with a call for regulation around how client/agency relationships begin, has worked its way toward a plea for intervention around how they end. Pursuant to my last point about creating 90-day initial engagements, we need some standards around how the two sides part ways, whether as a result of fruitless negotiations after the trial period, dissatisfaction down the line, or that three-year agency itch.

My recommendation is an industry-accepted severance that gets paid to the outgoing agency if termination occurs immediately following the trial period. This will prevent clients from becoming agency-hoppers and bouncing from one to the next scooping up fresh creative and media plans along the way.

And, regardless of the termination date, we need some standards around what intellectual property becomes the property of the client and what is retained by the agency. This is tricky in the digital world where non-standard media placements such as corporate Facebook pages and Twitter accounts proliferate. And just who owns those keyword lists and search engine accounts anyway? The answer to all of these should, of course, be the client, but these assets are sometimes withheld during agency transitions. We need to achieve industry-wide consensus here and provide recourse for both sides.

Conclusion
Can we create a more productive RFP process? There's no doubt that some of my suggestions raise more questions than they answer. I recently posted a 4,000-word manifesto on fixing the client/agency RFP process to my digital marketing blog. I go into much more detail on how this could all play out for the greater good.

If nothing else, I hope to get people thinking and talking about the RFP process, and maybe even get some of those acronyms to revisit this critical element of the digital marketing ecosystem.

After all, the behavioral targeting folks have had enough attention lately. Besides, clients and agencies would have more time (and money) to spend on other things if they weren't so busy processing RFPs.