A more efficient method to select the perfect agency

Darren Woolley

Darren Woolley is Founder and MD of TrinityP3, an independent strategic marketing management consultancy that assists marketers, advertisers and procurement with agency search and selection, agency engagement and alignment and agency monitoring and benchmarking. With his background as an analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

I am constantly reading about the waste of time and money that seems to plague RFP and tender processes. Marketing and procurement teams seem to be putting agencies through increasingly long and onerous selection processes.

We have developed a pitch process that bypasses this, saving time and effort simply by using a filtering system. This gives us a process that is efficient but still effective for managing potential agencies for our clients. An added benefit of this system is that we are able to manage increasingly complex selection processes where it is possible to have multiple combinations of suppliers.

The Pitch Process

A typical pitch process can include testing the agency’s capabilities, chemistry, skills, costs and contract. Marketers often take every possible agency through the entire pitch process, hence the waste of time and money. The way to avoid this is to create a hierarchy of importance with each process. It is then possible to use the hierarchy as a filter. It makes sense if an agency is underperforming in the lower criteria, you wouldn’t keep taking them through the process hoping for some change.

When you remove these agencies that aren’t ideal, it leaves you more time to focus on those that have the attributes you are looking for. You no longer have the distraction of multiple agencies, and can focus down on the few that are right for the process.

This filter process can be structured in multiple ways. Michael Lee, at Madam in NYC, launched a process based on a ‘9-6-3-1’ structure. At TrinityP3, we take a similar approach changing the 9 to an 8 so we have an ‘8-6-3-1 structure. We begin with an extensive search which is filtered down to a maximum of 8 agencies for credentials, 6 for Chemistry, and 3 for the final process until we are left with our final successful agency.

Selecting Potential Agencies

We have created a database of our agencies that we can access online. This database contains confidential and comprehensive information on the agencies from our market. We get the agencies to provide the information themselves, which our consultants then go over, check and cross reference. By creating this database we now have a detailed view of the market we operate in, and can use it to begin filtering the agencies through a list of nine criteria. These are:

1. Conflicts – Does not handle conflicting business
2. Proximity – Geographical location
3. Capability – Agency size, creative reputation, depth of resource
4. Skills – Preferred core skills, ie B2B, digital, shopper
5. Attributes – Preferred attributes, ie strategic, collaborative
6. Expertise – Experience with similar brands/scope
7. Experience – Category market knowledge/experience
8. Fit – Incumbents
9. Capacity – Capacity and desire to pitch

By using this list of filters, we are able group agencies into those that suit the marketer’s requirements, and a list of client conflicts. This is so that the marketers are able to see the competitive mix. Within the financial services market the availability of great agencies is limited when based on conflict which is due to the competitiveness, as well as the diversity within the market.

The final list we create is a ‘John West’ list. This shows all the agencies we have rejected. This gives the marketing teams as well as procurement the necessary information to decide on six to eight agencies to go further in the process. These agencies are invited to provide their credentials and come in for chemistry meetings.

The following criteria in our filtering list are in the order we use them, but this is by no means a compulsory order. Every marketer and marketing team is different and thus has their own needs, which means that their perfect order is customised to suit their needs.

Testing Capabilities in Credentials

It is not just enough to ask for the agencies’ capabilities; you need proof of these capabilities. Case studies are one of the best ways to do this. Some marketers and procurement people also want to test capabilities at this stage by giving the agencies a test to complete to assess their abilities. But, creating a test that is meaningful and relevant to marketing and their requirements means providing all of the agencies with details that are specific to the brand and strategy. Surely confidentiality agreements would take care of this problem?

Yes, the agencies are under confidentiality, but that is still six to eight agencies you are exposing the details to, when only one will be successful. It is entirely possible that the agencies use the disclosed information in some way or other. We have had a case where an agency, after being unsuccessful in a pitch, was using the information to their advantage. They were going after the client’s competitors by advertising the fact that they had information and insights in their competitive category.

Testing Contract Compliance

There is a tendency in the procurement process to provide the contract upfront. This is to ensure everyone is on the same page, and there are no misunderstandings at the end of the process. This can be effective up to a certain point, but isn’t fail-safe. Also, if we are focusing on contracts at the beginning it can show we are placing more emphasis on compliance rather than capabilities and chemistry.

We have also seen agencies agree with the contract at the start of the process only to create all sorts of problems with additional clauses later on. My recommendation is depending on the size and sophistication of the agency; provide them with details of the terms and conditions of the contract, especially around payment terms, term of the contract and IP arrangements, so they can make an assessment to participate up front. If possible, I would also recommend that these discussions not be with the creative or strategy leads but with the CEO, CFO or commercial directors.

Chemistry Sessions

Here at TrinityP3, we have a different approach in employing Chemistry sessions. (I have previously written on it here.) The important outcome of the chemistry session is for the marketing team to meet, engage and challenge the agency team. The team represented here should definitely include the agency senior management and representatives of the various disciplines that will be working on the business.

It is not uncommon to have situations where the chemistry between the marketing team and a single member of the agency is an issue. Generally this can be solved by discussing the matter confidentially with the CEO of the agency. It then becomes their responsibility whether they want to replace the individual or not.

Ultimately, if there is good chemistry between the two teams this is a reflection of shared culture, values and personality and an excellent bellwether of the immediate future of the relationship.

A Skill Test

By the time you have reached the stage of testing skills, I would advise the marketing team has filtered their list of agencies down to three. (The incumbent is additional to this). By having only three agencies it is much easier to test their skills. The testing should be based on what abilities or criteria you want from the successful agency. For example, if you are after channel media strategy, the testing should be based on that. Likewise if you want strategic and conceptualisation, then that is what you test for.

It is important that the test is appropriate to the desired outcome. Too often we hear of marketers providing the agency with a very wide ranging brief. They have asked the agencies to go and work on this in isolation, Then on presentation of the idea have selected the one they like best. What is the purpose of this test? Mind reading? Or how lucky the agency is? Or how many resources they can get in to solve the problem? Or perhaps they just wanted the idea to that brief? I am never really sure.

Through our experience in this process we have become incredibly proficient at defining the skills we are after during the testing process. When you focus on your desired skills and abilities, it becomes easier to evaluate each agency and decision making becomes easier. TrinityP3 has run a variety of workshops, presentations and events to demystify the process, and to inform marketers and procurement with the right information.

Dealing with the incumbent

The incumbent should only be in place if they represent a better option than the next best agency. Too many marketers fear some type of retribution from the incumbent if dropped at this stage. My experience until recently was this never happened.

But in a recent pitch the incumbent walked away, largely because the marketers deserved it. If you fear the agency will be unprofessional. It is probably because you have treated them unprofessionally. Otherwise I still maintain agencies will work professionally through the transition after losing business because they know that marketers move around and today’s business loss could be tomorrow’s new business opportunity.

Cost Is the Last Component in Value

The cost is always revealed at the end but the process begins before this time. We commence the financial proposal process at the short-listing stage of three. This process is designed to allow the agencies to provide their cost proposal and to allow us to provide a like-for-like comparison as well as to accommodate a customised proposal from each agency.

By analysing each agency’s proposal we are able to gain insights into:

• The suitability of the level and mix of resources
• The agency’s underlying price strategy
• Any additional costs of ancillary services

Only once the selection team has ranked their preferred agencies do we discuss the financial proposals. This is because value is based at this level on the perceived quality of each agency against the proposal cost. While I know of some pitches where the selection was driven on price, it is a short-term and wasteful strategy. If you want to select an agency purely on price, do not waste time putting them through a test of capabilities.

In most cases the discussion on the cost of the agency proposal is more about how to deliver the value inherent in the preferred agency or agencies and their proposals. This is a discussion on the resources required, the mix of senior and junior and the most appropriate remuneration model to deliver this value.

The Winning Agency

The final choice after the full process is the winning agency. The filter process described here allows you to systematically filter the agencies against your specific criteria.

It reduces waste of time, money and resources for both marketers and agencies. It provides focus and clarity in decision-making. It is efficient and effective in application. But it requires strategic focus and disciplined application.

Tags: agency management