I love pitching. The team I work closely with love it. This is important because we need to pitch a lot.

As a medium-sized creative agency working in a competitive market, we have to win new business to supplement up to 40 per cent of our revenue every year. And we’re not alone. Most agencies are in the same position. 

New revenue replaces income from jobs that aren’t replicated annually – brand strategy, brand design, long-term advertising platforms, and more. Winning new assignments and clients is fundamental to maintaining the business before we even consider growth. 

Pitching for business isn’t a process the advertising industry owns. Almost all new business-to-businesses relationships use pitching in some way. Bids, tenders, or proposals are required to win construction projects, supplier contracts, rights to put a product on-shelf or even host the Olympics. It’s the consequence of competitive markets and it gives the buyer confidence in a partner’s ability to perform the tasks required and set prices and terms before the project commences. 

Pitching is usually an exciting and rewarding process: 

• Getting to know a new business and its challenges is interesting. 
• Sharing advice and demonstrating our best thinking, experience and creativity is satisfying.
• Competing against our fiercest rivals is exciting. 
• The feeling of winning a pitch is intoxicating, except for the hangover. 
• Financially, the additional revenue contributes to budgets, hiring new people, and filling industry experience gaps. 

But herein lies the trap with pitching – all this ‘potential’ upside can blind you to the costs of pitching before you take the brief, fooling you into thinking that you need to go for every opportunity. 

I strongly recommend getting involved in the 2022 OUCH! Factor survey that’s currently open and closes on March 31. The findings from 2021 are staggering, including the revelation that the average responding Australian agency invested the equivalent of $100,000 in unbilled hours before winning a single pitch. So there’s no surprise that the cost of a year’s worth of pitching often outweighs the profit made and the whole process is called into question.

Too often, it’s the cost of winning that makes pitching hard to justify.

So can agencies avoid the downsides?

Unfortunately, not entirely. But, let’s remind ourselves of one incredibly important point – agencies don’t have to pitch for everything or anything. 

I recognise that agencies cannot survive or grow if they stop pitching altogether. Revenue needs to be replaced, and the most desirable and lucrative brands will normally pitch. It’s a challenge to control when a piece of business comes up for pitch, but we can control how and why we pitch for new business and, ultimately, the decision to pitch or not is ours to make.

One of the core issues of pitching is that the process isn’t transparent, open, and honest enough: 

• “The size of the prize” – How often do you know how much a prospect will spend in a 12-month period if you’re successful, or even in years two or three? 
• What is the decision-making process?
• When a client says ‘we don’t want creative work’, do they really mean it? 
• Is this a one-off project or a long-term relationship? 
• Has procurement mandated a review of the market, and while strategy and creative work are required, is this just about price? 
• Do you really know how many agencies are on the list? 
• Is the incumbent pitching? Why not? 

An agency’s ability to make an informed decision about whether to pitch or not relies on having the answers to these types of questions. 

So ask questions, and for money

Agency people must get comfortable with asking more questions before engaging in a new business process. And clients need to respect this with honest answers that help to inform the agency. In most cases, people in procurement and marketing teams do value the ideas, time, and effort required so they should be able to provide answers before briefing agencies – otherwise, they could risk losing the best agencies from the pitch list. There is a strong argument for remuneration discussions to be had before valuable thinking and ideas are exchanged. Potential revenue and profit shouldn’t be a nasty surprise once you’ve done all the work. 

As agencies, we seem to be so obsessed with growth that real profit considerations aren’t acknowledged (could be dictated by holding company expectations). Perhaps this preoccupation with revenue growth means agency heads can rarely say ‘no’ to a pitch, and that transfers all the power to the buyer, not the seller.

Unfortunately, this desperation can force bad decision-making. Decisions that end up costing the agency substantially more than the profit gained from a new business program. Unless of course agencies can convert a very high percentage of pitches, or new business is generated without a pitch at all (which is what we should be striving for in this industry). 

It’s the pitches you reject that will make your new business program the best

The decision to participate is up to us. Again, clients are respectful of this. If more agencies scrutinised the costs against the benefits and declined to pitch if they were’'t confident that the opportunity will add real value to their business (financially and creatively), then the pitch process would change. Clients would quickly understand that a transparent, open process where all parties know what’s at stake and what is on offer, would attract the best agencies.

A transparent pitch process will lead to more motivated partners for clients, that are able to sustainably produce better creative ideas, and improve profitably for all involved. In turn, helping to create a healthier industry that attracts and retains the brightest talent.