The Drum Network
How can your agency avoid the canceled pitch?
Agencies spend $12bn a year pitching1, but a third of all pitches are canceled2. Don’t be the agency who foots the bill. There’s plenty of advice to push back on the process, but not enough guidance on how to do it. So The Drum Network, and friends, have created this guide on responding to tenders responsibly.
You will find downloadable, actionable templates to help you: 1. Qualify the opportunity 2. Educate the client and 3. Transfer the liability in any pitch situation.
Ready to get started?
1 Forrester
2 jfdi / Opinium
Foreword
by Niki McMorrough, head of The Drum Network
Did you know that, according to the jfdi / Opinium New Business Barometer, for six consecutive years, a third of all competitive pitches were canceled*, with no winners because the budget was withdrawn, or the client changed their mind. “You came a close second” could not be further from the truth. “You came nowhere at all” is more accurate.
What a waste of your agency resources! Why do clients launch inconclusive pitches a third of the time? Because you haven’t sufficiently qualified their intent, you haven’t provided them with a reason to take accountability for the resource they consume, and you haven’t educated them about the true value of the pitch process.
Agencies are failing to educate brands on what a pitch entails and struggling to negotiate a fair process. According to Forrester, agencies spend $12bn annually on pitching. And the PM society says that the average agency spends £43,500 on a single pitch (but this can run into millions) - yet 39% of clients perceive the agency cost of a pitch to be less than £5,000.
*jfdi / Opinium New Business Barometer: 2022, 2021, 2020, 2019, 2018 and 2017.
of all pitches are canceled
The average agency cost to pitch
What 39% of clients believe the pitch cost to be
What does a canceled pitch look like?
Before producing this report, we asked The Drum Network member agencies how they have been affected by the canceled pitch.
“I’ve been in the process and it took us over a year... you just lose track of what you were doing at the beginning of the year”
Esther Duran, chief experience, design & product officer, Zone
"We had a process last year that lasted for five months, and that was partly due to personnel within the brand changing multiple times. In this scenario, we’d pretty much been picked, and then procurement got involved and the whole process got up-ended”.
Roger Barr, chief digital officer, iCrossing
“You’d go through the whole process and be selected as the agency to proceed and then, all of a sudden, a whole new level was layered in right at the last minute.”
Mikey Emery, commercial director, Impression
“You come back to the reporting of relationships after you’ve put in months of groundwork with people, only to have someone suddenly come out of the woodwork you've never spoken to before”
Jago Sherman, head of strategy, The Goat Agency
“What isn’t included in the cost of pitching calculation is the longer-term impact of pitching on the team – your most precious differentiator as an agency. 50% of those involved in pitching say they or a team member have experienced stress or burnout during the pitching process. This results in the person affected taking paid time off (34%), being medically signed off (27%), or leaving the company altogether (28%). Imagine the costs to your agency of those absences, not to mention the cost of replacing a team member who leaves.”
Sarah Kiefer, Pitch.com and ex-Spotify
“Everyone’s time is a precious commodity. I think brands are unclear about what they are asking from agencies. In the spirit of the pitch positive pledge, I think agencies need to band together and explore some alternative approaches to achieve better outcomes for all involved.”
Olivia Wiltshire, Builtvisible
Read more from Olivia here
When will a pitch be likely to get canceled?
How will you avoid the canceled pitch in future?
The Drum Network agencies suggested steps for weeding out the weak pitches.
"I've seen clients go away with information from a pitch and do the work themselves, or change course completely. Typically, we’re pitching to people who do not know how to do what we do; you have to be very careful that you're not just giving a client all of your resources.”
Robert Bassett, commercial director at Optimizon
“We won't go ahead with a client pitch process if there isn’t a clearly mapped-out plan”
Mikey Emery, commercial director, Impression
“If there were going to be more than three agencies, we would have to have a powerful relationship already with that potential client, whether it be known people or some kind of previous relationship with some of the key decision-makers.”
Roger Barr, chief digital officer, iCrossing
“Be transparent about the cost to your agency.”
“Be clear about your terms in the event the pitch is canceled.”
But how do you put their advice into action?
Swerving the canceled pitch is an easy 3-step process.
This advice is deliberately simple and actionable. It is based on solid research and practice. To find out more about the theory behind this advice, see the ‘further reading’ appendix.
“It’s a massive problem that isn’t easy to solve but this tool may help to encourage incremental change through more honest upfront discussion about the commitment and terms of a pitch. Agencies need to reign in their eagerness and cure the trust issues of our industry by being less readily available to do ‘free work’ and making the process more about chemistry, fit and collaborative understanding.”
Dan Archer, Cactus
“We support the pitch positive pledge but the topic is so enormous and culturally ingrained, that it’s difficult for any agency to know where to start. But we need to start somewhere. Clients don’t pitch as often as agencies. We do know better. So, we need to educate. And this simple email template is an example of how we can do it.”
Mark Clark, jfdi
Educate the client
As soon as you receive the invitation to tender, inform the client of the cost and risks and invite them to discuss the options.
The Drum Network suggests using this email template to initially reply to the invitation to tender. Adjust the suggested values to suit your policy and the size of the opportunity.
SUBJECT LINE: Qualification of your invitation to pitch
Dear {name},
We are pleased to be invited to your tender. As an agency, we are experts in our field, and clients come to us because of our portfolio of work. Our website, case studies and testimonials, plus references on request, provide a prospective client with information about the work we do and the clients we service / our area of specialism.
Provide the prospecting materials the client needs to know your work and choose your agency
Pitches are sometimes unnecessary and always expensive – did you know that the average agency spends more than £43,500 to undertake a single pitch? Did you know that a third of all pitches are canceled?
Educate the client about the cost and risk because 39% of clients believe an agency spends <£5k to undertake a pitch
We need to protect ourselves, our people and our clients from unnecessary wastage and charges, in accordance with the framework set down by the pitch positive pledge and our people policy including anti-slavery, which your tender process requires us to have.
Draw reference to the fact that such a process is against the people policy of your agency and their brand
We only undertake 3 carefully qualified pitches per year. Before we agree to enter into a pitch situation with you, are you available for a call to discuss the above to help us to decide whether and how to proceed further with the process?
{your name, role, agency}
Frame your agency and process as the prize. On this call, caringly ask the questions outlined on the next page
“I think it is important for both parties to acknowledge upfront that sometimes pitches get canceled for valid reasons – and if the agency’s incentive for providing free services is withdrawn through no fault of their own, then the client will be expected to cover (or at least share) the costs they incurred.”
Richard McHardy, BD100
“Agencies should be charging brands full price for the pitch (c£100k). If they can’t charge full price, they should charge a nominal fee (£5k). If they aren’t brave enough to do those options, then charging a fee for the canceled pitch is an absolute necessity. And NEVER sign over your IP, whether paid for or not, in a pitch.”
Marcus Brown, The Great Pitch Company
“Be even more disruptive - don’t just send an email, get on the phone. On the spectrum you can be fully compliant and play the game – or never pitch – or only play the game where you can get the rules changed in your favour.”
Blair Enns, Win Without Pitching
Qualify the opportunity
Next, on a call or in person, while you are finding out about the opportunity and developing rapport with the client, drop these questions into the conversation. In your very caring way you are educating them on the real cost and risk of the pitch, rising to their power level, and seeing how they would respond if the roles were reversed.
“Did you know a third of pitches are canceled?”
The jfdi / Opinium New Business Barometer for 6 years in a row found that 1/3 of all pitches get canceled.
“This pitch is unlikely to cost us less than £40,000.”
Forrester and PM society found that while pitches cost upwards of £40k, the client perceives they cost less than £5k.
“We only undertake 3 pitches per year.”
Introduce scarcity to the process – make them appreciate the rarity and value of what they are asking for.
“To qualify for one of our 3 pitches, will you agree to:”
Frame your agency as the prize. Counter their process with your process.
“No more than 3 in the pitch.”
“You will pay us £5,000 if we don't win.”
Find out how serious they are about your agency joining the pitch.
“You will pay us £10,000 if no agency is awarded within 3 months of the deadline.”
Find out if the client is willing to own the risk of them canceling.
Add further concessions as applicable, eg providing access to the CMO and going first / last in the process.
“If the client agrees to your concessions, they are more serious about you taking part than if they don’t.” says Blair Enns, WWP.
“Pitches don’t need to involve a creative shootout – to break this industry habit that’s been entrenched for 40 years, we need to re-imagine a more efficient pitch process, together. This practical tool may help agencies have the conversation with the brand – is a full pitch really warranted? Would they be asking for it if it was their investment? I would like to see agencies re-deploying the money they invest on pitches into talent development and training.”
Graham Kemp, The Alliance
“I think this is a smart tool – the goal is not to get every brand to pay a fee, but to make them think twice about wasting your time and help to change the ingrained habits of the industry.”
Farrukh Sawar, S7 Business Development Agency
Transfer the liability
If you agree to do the pitch – try to transfer the liability.
Ask if they would be willing to insure you against them canceling the pitch and/or pay a pitch fee. Cite your board and process as equal to theirs.
SUBJECT LINE: Our decision about your pitch
Dear {client name},
Further to our discussion, I have been able to get agreement from our board to take part in your pitch on the following basis.
Our services are sought after, we only undertake 3 pitches per year, a pitch costs at least £40,000 and to qualify for this valuable resource, in the spirit of the pitch positive pledge:
- Your process, budget and timeline will be clearly defined before we begin, and adhered to throughout the process
- There will be no more than 3 competing agencies
- The work will be awarded to one of the competing agencies at the budget and level promised in the tender outline, by the deadline provided
Be very clear about the conditions which warrant you to spend upwards of £40k providing your services to help them with their tender process.
This elevates your board and process to the same level as their finance team and process.
We will provide our services for your pitch (which will cost us >£40,000) based on the above understanding. If we win the pitch, we will write off the cost of the pitch (our commitment based on the pitch opportunity you outlined), however:
- If we lose the pitch, there will be a pitch fee of £5,000
- If you withdraw the pitch with no result, there will be a pitch fee of £10,000 or the total cost incurred, whichever is the greater (our insurance against a pitch that doesn’t fulfil its upfront promise).
Frames your investment as greater than the small insurance fee you are asking from them, which is very reasonable.
Is this something your procurement team can agree to? Are you available for another call to see if we can find a way forward?
Best Regards,
{your name, role, agency}
Keeps the door open so that you can discuss their response and still find a way forward if applicable.
If you decide to walk away, keep your bridges intact.
Dear {client name},
Further to our discussion, we would be honoured to work for {insert brand}, however, your pitch process has not passed our rigorous qualification process {insert reasons if appropriate}.
Be clear that it's the process, not their brand or project, that hasn't passed your qualification.
We have this qualification process in place to protect ourselves, our people and our clients from unnecessary wastage and charges, in accordance with the framework set down by the pitch positive pledge and our people policy.
Pitches are sometimes unnecessary and always expensive – did you know that the average agency spends more than £43,500 to undertake a single pitch? Did you know that a third of all pitches are canceled?
Elevate your process to an equal level as theirs, and call out your people policy, which most tenders require you to have.
It is important to repeat the education process as this email will reach the procurement team, who may not know this information yet.
We would be very interested in supporting you directly with {describe project and your specialism}.
The cost would be £xxx,xxx, see itemised quotation attached which gives you a thorough overview of how we will approach the project. You can also find attached our portfolio, case studies and testimonials. I think this is everything you need, to know whether we are the ideal agency for this project and move forward quickly.
Please do come back and commission us when you are ready.
Best Regards,
{your name, role, agency}
Reiterate that you feel warmly towards their brand/project, and you are available for paid work.
The quote gives them the option to commission you, educates them to the value of what they requested for free, and frames the pitch as an unnecessary delay.
“We are no longer built the same because not pitching cancels out so much waste. We still spend time converting new clients but our efforts are much more intentional.”
Julie Cohen, CEO, Across The Pond
I followed the process, what happens next?
Always
With 100% certainty, you will avoid investing your valuable resources in a canceled pitch without being compensated.
Often
You’ll walk away without the assurances you would need to justify such an investment of your company’s resources. This is for the best.
Sometimes
A client you declined will come back to you later with a pitch-free scope.
Occasionally
Especially if you build rapport while having these difficult conversations, your client will be able to use your constructive, informative response to push back on their own procurement process and skip the pitch so they can commission you to do the work immediately.
Don’t stop now!
Become a member of The Drum to learn more.
Don’t miss these skill shares and workshops with members of The Drum Network and industry experts. Plus, become a member to unlock on-demand video access to our library of workshops and leadership lessons.
Skillshare
How to swerve the canceled pitch, with The Drum and jfdi
December 6, online
Mark Clarke, Partner, JFDI*
Mark will also be offering a free 30 minutes consultation to members of The Drum Network in Q1
*If you like the approach and want to develop your pitch mindset: jfdi has offered 30 minutes to Drum Network member agencies, who want to embed this philosophy / approach into their pitch process, and develop their pitch & negotiation skills. Contact membership@thedrum.com to enquire.
Skillshare
Gaining control of the brand-led pitch process. What's really going on inside the brand?
2024, online
Join pitch expert Sarah Kiefer to decipher what really goes on inside the brand during the pitch process and what steps you can take towards ensuring the best possible outcome for your agency.
Sarah Kiefer, CMO, Pitch.com and ex-Spotify
Skillshare
Optimizing the agency procurement process with Blair Enns
2024, online
Sit down with founder and author Blair Enns to address common challenges, share strategies for streamlining processes, and gain actionable insights to transform your agency's procurement and boost success.
Blair Enns, Win Without Pitching founder and author
Plus, attendees can claim an exclusive discount on Blair's second book, pricing creativity
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