Ah, the 1960s. When top inventions included the audio cassette and the halogen lamp, the first handheld calculator was produced, and RFPs made their debut. Of course, all of those things are now obsolete, right?
What a minute…
While it’s true that most inventions from the 1960s have evolved substantially, RFPs seem stuck in a time warp. Sure, they’re more complex than the first one used in 1962 by Mohawk Airlines to pare their agency options down. But much has remained the same.
The question (and answers) of why RFPs have remained in an industry known for creativity and innovation would fill quite a few pages. Instead, let’s look at the reasons why RFPs are no longer the best choice, and what works better.
Responding to RFPs Uses Valuable (and Finite) Client and Agency Resources
Not all RFPs are authentic requests. When Lyft posted a search for an agency, many felt it met all the criteria for a PR stunt. Was it the fact that they were already working with 9 agencies? Their poorly written brief? The fact it was posted publicly on Twitter and requested all agency video pitches to be posted publicly on Twitter? All of the above and more.
Responding to an RFP—one that’s solid—is no guarantee of any future contract, and it tends to take valuable time from an agency’s most talented members. As Laura Reagan describes for Active Health, “You’re in the middle of important work on behalf of your existing clients and you receive a 50-page RFP asking you to respond in two weeks.”
Some large companies have dedicated RFP teams that can put in the time and effort needed to respond to RFPs. But mid-size and smaller companies have to choose between pulling resources when they’re needed elsewhere, giving a stock response that’s unlikely to generate any interest, or simply saying no from the start.
And then there’s the other side of RFPs: the issuing company who now must dedicate resources to plowing through piles of RFPs, trying to narrow their options.
Do the generic ones get ignored or is there something valuable to be considered? And how do the agencies compare? Is a flashy deck an accurate indication of how well the boots on the ground at the agency will actually perform?
A wrong decision is always costly in terms of time wasted, organizational churn, and money spent, and is way more frequent then brands want to admit. According to Steve Fajen of DrexlerFajen “Today, the average client/agency relationship has dropped to between three and four years. Worse still, half of these relationships won’t even last two years.”
If 50% of client agency relationships aren’t even making it to year two, there is a clear problem with the process of client agency matchmaking.
COVID-19 has created another challenge impacting brands: After conducting a long RFP process, identifying a winning agency, and signing a long contract, everything has changed. The needs a brand had in January 2020 are different than their needs in April. The agency brought on to solve one problem may not be suited for the new reality. This scenario isn’t unique to the current pandemic. Businesses undergo constant change and competitive innovation, the current pandemic is simply shinning a spotlight on a problem that has existed the last 20 years.
The lengthy process of an RFP removes the opportunity to source out an agency who is agile, prepared for working remotely, and able to provide the right solutions when challenges can change overnight. It also doesn’t allow the issue to audition the agencies on real work with real team members versus the “pitch team”.
RFPs Ask for Unpaid Work
Not only does it take agency resources to respond to every RFP, they tend to ask for unpaid work. This is a growing and worrying trend. Most agencies in the going forward landscape are not going to be much more selective with the RFPs they respond to and even the large networks will need to rethink the amount of travel, creative resources, and process they foloow in determining what to chase and how to chase it.
Proposal consultant David Seibert suggests that “new business development win rates [for non-federal RFPs] generally range from single digits up to 15%.” While there are things your agency can to do improve—like being selective on which RFPs to bid on—this rate speaks strongly to the overall low value in RFPs.
Bustle reported an increase in RFPs in 2018, but CRO Jason Wagenheim also shared with Digiday that “non-RFP campaigns have become “unquestionably the majority of our higher revenue deals”. The reason they are higher revenue, is because the relationships last longer, because they were built on something other than arbitrary reviews of crafted pitches.
You Can’t Get Creative Solutions from Boxed Problems
RFPs tend to look for creative solutions to generic problems or staged scenarios that wont actually translate to the real end result a client is trying to create. And that’s just the tip of the iceberg. In what’s become known as #lobstergate, an account executive for Kontera promised a delivery of burgers or lobster for the “first 10 media teams” to send an RFP. This was reported back in 2014. It was a turnoff for most agencies who received the email, and put the focus on responding, not giving the best solutions.
A.J. Meyer for AdAge acknowledges procurement teams usually look for the best deal, not the best solution. “The best ideas and results usually come from rethinking the problem statement, but most RFPs don’t provide the respondents with the chance to reframe, rethink or reposition the brand problem.”
The deliverables requested in RFPs aren’t necessarily the right ones for the brand. This leaves agencies unable to see larger brand challenges and bring in the appropriate solutions, failing brands and agencies.
Agency-client collaboration is essential to creative solutions. Granted, the traditional ‘win RFP then create great collaborative relationship with client’ track does point to collaboration eventually, but the RFP itself gives no room for collaboration with the client during the most important part of the dating process. Imagine deciding whether to marry someone based only on written correspondence and one or two highly choreographed and controlled 2 hour dates. That would be crazy for the same obvious reasons. Its not real.
“RFPs fail brands, too.” writes Mimi Lettunich (President & Executive Creative Director of Twenty Four 7) for Forbes, “The process precludes any relationship-building that can facilitate true understanding between a brand and the agency it intends to partner with.”
All communication during an RFP is isolated. The agency communicates within its walls. The client does the same. Instead of creative solutions, agencies tend to focus on glitzy presentation. Lettunich describes the “beauty contest nature” that leads to subjective decisions.
This ‘beauty contest’ means that agencies are putting their best people on the job of completing the RFP with the singular goal of securing a contract with the client. But once that contract is signed, that top talent is usually shifted to the next RFP or the highest paying client.
In large agencies in particular, it’s the junior members who are tasked with meeting the brand’s long-term needs. The bright light that attracted the client isn’t the one who works on the actual day-to-day business. The process fails the brand—who doesn’t get the talent they expected—and it fails the agency, who doesn’t have a productive and collaborative relationship with the client in which to build a lasting partnership.
How COVID-19 is Changing the RFP
The most immediate impact of COVID-19 was the inability of agencies to present their RFPs in person. All the activities involved with traveling to a brand’s head office, meeting, and dining were halted. Suddenly, a virtual meeting became the only way to proceed. Both sides are now forced to consider how necessary all the previous expenditures and travel time really were.
Loopio conducted a survey at the beginning of April 2020 to determine how companies involved with RFPs were impacted by the coronavirus pandemic. As Claudia DoRego reports, a third of proposal teams have seen a decrease in RFPs, and about a fifth expect this decrease to continue. However, there are some (10%) who have seen an increase in RFPs. Challenges include market uncertainty, company morale, and collaborating while working remotely.
Alternatives to the RFP
The broad solution to moving past RFPs into something more productive and effective is to look at the end goal. Brands are looking for an agency they can partner with for the long term and provide a great ROI. Agencies are looking for brands they can partner with for the long term, and utilize the best the agency has to offer.
It’s a bit like looking for a romantic partner. The online profile might look great, but what really matters is finding someone you can have a long-term connection with. The only way that can happen is by getting to know each other. By dating a few agencies you are initially attracted to before deciding which one is your soul mate.
Alternatives to RFPs for Brands
As Claire Wallace for Agency Spotter writes, there are better ways for brands to find an agency than using an RFP. Start with looking for an agency that has experience in your field and operates within your available budget. Set a flat fee and have the agency work with a specific marketing problem and show how they would solve it. This Discovery phase can be replicated with a few other agencies, or might quickly indicate that the agency is a good fit.
An expository sketch is another option, where a brand conducts discussions with a few agencies about a current problem. Conversations with agencies provide the best opportunity to identify the ability to collaborate and find creative solutions. Making sure that the actual bots-on-the-ground people are involved in the conversations is critical.
Wallace also suggests using a sample project to vet agencies. Again, you’ll need to have a short list of potential agencies already. Take a day with each of them to work through a challenge and see where it leads. After sitting down with a few agencies, you’ll have a much better idea of what you need, and who is best suited to meet that need—all without the months of waiting and piles of paperwork of an RFP.
Consider this example of how to make agency search more meaningful using paid search to illustrate the point: Instead of issuing an RFP and awarding a single media agency, carve off 3 different search campaigns and have and assign one of them to three different media agencies for management for two months. Split test your agencies and see who performs and gels the best with your team. A traditional RFP process takes a few months anyway so why not be sure you are getting the team you like the best and has the chops to walk the talk. This is just as applicable with creative and larger AOR style relationships.
If you’re having trouble narrowing the field of agencies to contact, an RFI may be a good solution. RFIs are a way of finding out more from a company than what they post on their website, without going through the full RFP process. While they do take time to issue, collect, and evaluate, the insights an agency provides can provide some indication of whether they may be a good fit for a longer term project and can be an effective hybrid approach.
Cindy Rittel, senior sourcing advisor at Una gives some more options in her RFP alternatives article for RFP360: join a Group Purchasing Organization (GRP) that outsources the RFP process, use requests for information (RFI), quotation (RFQ), or proposal (RFP), or run a more informal process with fewer questions. Send an email to a few agencies asking how they would solve a problem and what they would charge.
Alternatives to RFPs for Agencies
In Lettunich’s article for Forbes, mutual vetting is the overall solution to RFPs. “We believe that deciding whether to work with a new client or not is too crucial to be left to the tyranny of the RFP.” This requires a shift in strategy.
Agencies need to determine what criteria are essential for them to work with a brand: “knowing and clearly communicating expectations puts agencies in a position of power from the start.”
Rather than a checklist from a brand, have an interview and focus on dialogue and working to understand each other. Going back to the dating analogy, this is akin to going on a few dates and maybe throwing in a late night chat on the phone. Have some real time together where you learn what lies beyond the one-dimensional ‘dating profile picture’ of the company.
Lettunich has an elegantly simple approach to a client who has sent your agency an RFP: ask if they’ll have a conversation and if they’ll consider a different approach. Shifting to a dialogue immediately opens up new opportunities and says a lot about the way the issuing company thinks.
Ultimately, moving away from RFP’s means agencies can “deliver better work and better outcomes because we’d be set up for mutual success from the outset.” Mimi Lettunich
Long live real relationships.