New RFP research provides perspective on agency-client relationships

Lessons for finding and keeping ideal clients.
Agency Leadership Podcast

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Agency owners want clients to be happy with the results they provide – that’s one of the reasons they are in the business. A recent research project about the RFP process shows that one out of three clients are dissatisfied with their agencies.

In this episode, Chip and Gini discuss why a third of your clients may be unhappy, and what you can do about it. They tackle the topics of RFPs, communication, and managing expectations.

Quotes

  • Chip: “Oftentimes, the reason why someone is dissatisfied is because there’s a disconnect between what their expectations are, and what your expectations are, what you can deliver. And so you’ve got to get those things meshed together from the very earliest stages of the relationship.”
  • Gini, on building processes: “You start to realize, Oh, I almost need a recipe, and a recipe can be replicated. And from my interns all the way up through my vice presidents the work is the same level, no matter who’s doing it.”
  • Chip: “There are very few agencies that have no staff turnover. And if you have no staff turnover, that’s probably a bad sign. There is a healthy amount of turnover, it brings in fresh ideas. And it also validates that you’ve got a great team, because people are pursuing them.”
  • Gini: “When a prospect knows how the sausage is made, kind of like knowing how hot dogs are made, you really just don’t want to do it anymore.”

Resources

Transcript

CHIP: Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

GINI: And I’m Gini Dietrich.

CHIP: And we’re here today to talk about some new research because it’s a good way to learn and do research about what other agencies are doing, what agency clients are doing, and figure out what the heck can we learn from it, right?

GINI: What the heck can we learn from it?

CHIP: and we’ll find out over the next 20 minutes, we can learn. And in this particular case, it’s it’s a collaborative research project that was conducted by the Institute for Public Relations, RFP Associates, CommunicationsMatch and Researchscape, all those links will be in the show notes. So you don’t have to actually remember them. We’ll also, of course, have a link to the survey results itself. And this survey was of senior communications executives, mostly at larger organizations, about half of them are publicly traded companies, and half of them were not, a quarter of them spent over a million dollars a year on PR firm. So the kinds of clients that I’m sure most listeners would love to, for sure sink their teeth into. And so in any case, it was it was focused on the RFP process. But there are a lot of other lessons that we could tease out from the results that I think will be of interest to our listeners.

GINI: So one of the first things that’s pretty interesting and probably won’t come as a big huge surprise is that one out of three clients are not very satisfied with their agencies.

CHIP: And guess what that means that probably one out of three of your clients are not very satisfied with you, dear listener. You just may not know which one. You may think you do. But you don’t always.

GINI: Yeah. And yeah, it definitely creates an opportunity for competing agencies. I mean, I don’t know how many times I’ve heard, we’re just not happy with our agency, because we’re not getting any results. Right. And then you have to dig into what their expectation of results is. And you know, I actually had somebody say to me, I expect my PR firm to make my cash register sing. And I was like, okay, so that may be a little out of line. But let’s talk about it.

CHIP: Well, I think that you know, a good lesson here is that as an agency owner or executive, you need to make sure that you are having regular touch points with your clients. So that you can figure out which one of your one out of every three of your clients may not be fully satisfied, understand what their expectations are. Because oftentimes, the reason why someone is dissatisfied is because there’s a disconnect between what their expectations are, and what your expectations are, what you can deliver. And so you’ve got to get those things meshed together from the very earliest stages of the relationship.

GINI: Yes, and and that also goes to one of their top complaints, which is they harbor concerns about account coordination and oversight, because their issues with meeting objectives, objectives and staying within budget, which on our side, we see that as well, where we’re over servicing clients, and not have, you know, a good portion of the budget may be going to account management versus getting results. So it’s, it’s interesting that the, the perspectives are different, but the result is the same.

CHIP: And this all goes back to that initial pitching process that you go through with clients, whether you do a formal pitch, or a formal RFP, or you do a paid discovery process as, obviously, you advocate – doesn’t matter, whatever that process is in the early stages, you need to be making sure that you’re setting the expectations correctly. Because let’s face it, when we’re in those earliest stages of relationship, we want to talk about all the good things we can accomplish, we want to talk about the results. We don’t say yes, these are the results we can accomplish. But there’s kind of going to be a bit of a long slog to get there. It takes it takes a lot of labor and time to set up those results. They don’t happen the day that you sign the contract.

GINI: No. And I think that I mean, that, especially for the work that I do from a public relations communication standpoint, I really believe I make this joke that there’s some school out there that’s teaching business owners that you hire a PR firm, and they can get you in the New York Times, and all of your sales problems will be solved. Right. And it’s funny, because it’s true. I mean, there’s not really a school that’s teaching that. But that’s what their expectation is, is that I mean, it’s like the prospect who said to me, I want you to make my cash register sing. They really believe, you know, Oprah is no longer on the air, but it used to be, well, I want the Oprah effect. Okay, but you’re okay.

CHIP: Right. Well, and a lot of times, you know, the New York Times, you know, may sound like it’s a good hit, but it may not actually be all that beneficial for the client.

Correct, correct.

You know, if I think about my own business, you know, what I rather get, you know, a glowing report about me in the New York Times, or a glowing report about me in PR week? PR week is probably going to do a hell of a lot more for my business.

GINI: I think Spin Sucks is what you meant.

CHIP: Spin Sucks already says so many nice things about me.

GINI: Fair, all right, fair.

CHIP: I was trying to set a higher bar, Gini.

GINI: Oh! Well I’ll start saying mean things about you, then.

CHIP: Well, that’s gonna make this podcast really interesting at that point. But in any case, so part of the strategic piece, but I think the other thing that really should be the friend of just about every agency, is a timeline. And, you know, as you’re working with clients in those early stages, set the expectations about what you’re going to do, but also start showing them some timelines so that they understand, you know, here is the process that we’re going to be going through so that they can see, and they need to see what what it is they need to contribute to it, because agencies can’t do it all themselves. And it does require collaboration. And so the timeline needs to show, you know, things like, you know, and this happens seven days after we get feedback from you or whatever. And the more that you do to set those expectations up front, it’s not going to solve all the problems, it’s not going to have them say, Oh, yes, everything’s hunky dory, but it will help. And it’s, it is part of the communications process you need to have with your clients throughout the engagement.

GINI: Yeah, it’s funny you say that, because, you know, we we do a lot of work with agency owners. And this is this is probably the number one thing we work with, with our clients on, which is, what is your process? What’s your onboarding, like? What do you expect? What can clients expect? when can they start to see results? You know, those kinds of things have to be outlined, and most agents and not all, but most agencies don’t have that stuff documented. And so when they start working with a client, it’s kind of like, okay, we need this, we need this and the client’s like, Whoa, so what’s your process? What does that look like? timeline is great for that. What can the client expect? You know, all those kinds the things as part of your onboarding, it has to be documented.

CHIP: And the dirty little secret is that actually helps with your internal account.

GINI: Absolutely.

CHIP: Because more often than not, the big picture stuff is all agreed upon by the decision maker at the client and by the the owners and executives at the agency. But it’s the it’s the day to day workers on the client side and the agency side that have to implement if you haven’t documented it, they’re flying blind. Yep. And that’s when things really start to go off the rails.

GINI: Yep, you know, I will, I will insert this here, because I recommend this book over and over and over again, Built to Sell one of the very best books that you can read as an agency owner to help you think about process. It’s written from an ad advertising agencies owner’s perspective. So it doesn’t matter. You know, if you don’t do advertising, you will definitely see yourself in a lot of what he describes. But his whole point is, I mean, the point of the book is that you build a process that you can eventually sell your agency and not have it be reliant on you. But the, as you work through it, and it’s really easy read as you work through it, you start to realize, Oh, I almost need a recipe and a recipe can be replicated. And, you know, from my interns all the way up through my vice presidents they can the work is the the same level, no matter who’s doing it.

CHIP: And the other advantage to processes is that it helps address one of the other concerns that was raised in the course of this research, and that is that roughly half of the respondents expressed concern about staff turnover at the agencies they work with. And and this is, this is a really difficult one to deal with because agencies are always going to have staff turnover. And there are two kinds of staff turnover when it comes to a client perspective. There’s the people who actually leave your agency completely. But then there are also people who may get you know, reassigned, you know, project wise, and this is particularly true when you’ve got a client that’s been with you a long time, because one of the problems that that you run into, and one of the reasons why long term clients tend to take a hit on profitability is because if you keep the same people there, and their salaries continue to go up, as they get more experienced, and all that, you know, their cost of service to that client is now more than it was when they started, even though what they’re doing is essentially the same. So there’s there’s turnover is really something that that is important to address. It’s something that you need to think about how you do it with your clients, because it’s going to happen, right? There’s, there are very few agencies that have no staff turnover. And if you have no staff turnover, that’s probably a bad sign. I know, you think it’s great. I, you know, when I talk to agents, you know, I’ve had all of my staff has been with me for 10 years. Nice. Yeah, I start to get, I start to get nervous when I hear things like that. Because, you know, the reality is that you don’t want to have all of your staff turning over all the time, that’s also a bad sign. But there is, there is a healthy amount of turnover, it brings in fresh ideas and all that. And it also validates that you’ve got a great team, because people are pursuing them, right. And so if you have no turnover, you know, look at that as a as a warning sign that you need to address. But so in order to deal with, with turnover with your clients, processes help with that, because it makes those transitions smoother if there is, you know, if your agency has a way of doing things, and it is well documented, and people understand what they have to do, you start dealing with some of those transitional issues that can be problematic. But beyond that, again, this comes down to communication with the client, you need to make sure that as a senior person, you are working with them. And as you foresee these things happening, you work in advance to smooth them over.

GINI: Yeah, it’s, that’s a tough one. Because the agency business in general, is, I mean, there’s lots of turnover, it’s just like sales, there’s a lot of turnover. So that’s a hard one, I can understand completely, the client’s perspective on that. But that’s tough.

CHIP: And so then the next point that came up in the research is one that I think probably won’t come as a huge surprise to people. But it really underscores the importance of all the efforts that everyone here is taking from a business development standpoint, because two thirds of the clients rely on peers and word of mouth for suggestions. And less than 15% actually do research or hire a search consultant or use directories or do anything proactive outside of their own word of mouth circle to figure out who to hire. So it really means clients hire who they know, which means you need, you need to get to know them. You can’t just expect that your phone is going to ring because you put something nice out there on the internet. And you’ve got a nice website, you’re in all the right directories and all that you may get some inquiries off of that. But the reality is, you’ve actually got to hit the pavement and have conversations with people.

GINI: Yeah, and I also think that, you know, if certainly there are things outside of our control, like senior leadership changing over or a merger or acquisition, you know, things like that create loss of clients, but it also creates a really good opportunity, because those clients go elsewhere. And just, just not all the time, not every single time you talk to a client, but you know, consistently ask, boy, I noticed in on LinkedIn that you’re connected to so and so so and so and so and so I would love those are companies we would love to work with, would you mind making an introduction, because that is absolutely where most people are getting their referrals. And you know, they’re sitting in their Vistage meetings, or their YPO meetings or their whatever meetings and they’re on the golf course. And they’re saying to their buddies, hey, who do you guys use for PR, so having the having the kind of relationship at the very top levels that will allow you to continue to be referred as one of the things you should be focused on.

CHIP: And you need to have those relationships before that person is actually out looking for an agency. Because by the time they’re looking, it’s probably too late. And so you want to make sure that you’re known to them so that when the time comes, when they wake up and say I’ve had enough of this agency, or you know, maybe they don’t have an agency, we’re going to hire one for the first time, whatever it is, they need to have your name on their mind. So you need to establish some degree of relationship with them, get your name known to them, make sure that your name is regularly appearing before them, whether that’s through your own personal outreach, or you’ve got them on your email list, or you should be a combination of touches. So that when they have that thought, your name comes to mind,

GINI: You know, I will tell you, this is this is this totally fits my personality. And I don’t recommend this just for any client. But we work with a company and we’ve worked with them for years. And it used to be that the CEO, and I did all the work together. And then as as we grew and they grew, you know, he eventually handed off to his team, I handed off to my team, but he and I still maintain a really close relationship, but we don’t spend as much time together as we used to. And he asked for a new bio, like, six months ago, and I may have had a little extra time on my hands. And so I wrote it in the style of The Jerk. And I sent I wrote him a real bio, but I wrote the bio in the style of The Jerk, and I sent it over. And he calls me and he goes, I don’t understand this. I wasn’t born a poor black child, like, Where did you get this information. And then he keeps reading and he goes, I hate you. So fast forward to earlier this week, I hadn’t heard from him or talked to him in a few weeks. And so I texted him. And I said, remember the time I wrote your bio, in the style of The Jerk, he texted me back and he goes, I love you. So it’s like, it doesn’t work with every client. But there are things like that that can keep you you know, endear you to the top level of your clients businesses without it having to be, hey, let’s have an hour meeting and talk through all this stuff.

CHIP: Right, right. And the other thing is, you know, as you’re building relationships with people that you’d like to work with down the road, you don’t have to necessarily view that as you know, I’m going in there and trying to undercut my competitor. I know a lot of the agency owners I talked to, you know, we all work in a small community, when it comes to PR and marketing. And, you know, there’s a lot of sensitivity to, you know, geez, I don’t want you to think that I’m trying to crowd in on her business or, you know, whatever. The reality is, the client’s going to make whatever decision they’re going to make, you just need to be known to them. It’s not going in there and try to steal the business, you don’t have to go in there and say to them, and I in fact, I would not advise you to go in and say, Hey, so are you happy with Gini? I don’t know, you know, I heard she just did this thing with this other client, where she wrote the bio completely wrong. So you don’t have to do that. All you need to do is be on their radar in a positive way. You don’t need to go in there and knife your competitor in the back. That’s just that is not necessary. It’s generally not even helpful.

GINI: No, because what people what most people will think is, gosh, I don’t want to work with these people.

CHIP: Correct. Correct. It’s like when you’re doing a job interview, and you’re, you know, you’re talking to the prospective hire, and they’re just shredding their their previous employer, right? Then you figure, okay, they’re probably going to be saying the same thing about me someday. So do I really want to go down that path? You know, one of the other interesting things that came out of this research is that those people, those clients who have agency experience themselves are shocking, wait for it, much less likely to be satisfied with the search process. So if they know how the sausage is made, they’re not going to like the process as much. Shocking, shocking, I am truly shocked by this.

GINI: Right, right.

CHIP: But it is, it is important to think about that. And anytime that you’re communicating with a prospective client or even a current client, you need to understand what their backgrounds and biases are. So that you can account for that in all of the communications that you’re having with them. Because the reality is, some people will see things in a different light just based on what their life experiences have been.

GINI: Yeah, and I mean, you already said this, but when a prospect knows how the sausage is made, kind of like knowing how hot dogs are made, you really just don’t want to do it anymore.

CHIP: But you eat them anyway.

GINI: No, I don’t. I do not. No.

CHIP: Sad, sad.

GINI: Yeah, that’s very, not No.

CHIP: All right. Well, anyway, just keep that in mind that if they have been in your seat before, they know all the little secrets that you have, they know all the corners you are going to cut, you know, that they they know, when they’re listening to BS and when they’re getting the truth. So, you know, I’m not I’m not advising you ever to, you know, cut corners and BS clients, if they’re not from an agency background, but be particularly sensitive to those things if they if they understand the process, because the last thing you want is to have them call you out on it or to stew about it, because they know what’s going on behind the scenes.

GINI: Which leads us to prospects withhold vital information from agencies, big shocker there, 71% don’t include proprietary information. 46%, nearly half don’t give any budget guidance. Ahhhhh, 34% don’t disclose the decision timeline. I mean, this is what?

CHIP: This is the fundamental problem with RFPs. And so, you know, I’m less militant about RFPs than you are, but I hate bad RFP processes. And a lot of them are bad because of these very things. Because you’ve got clients or prospective clients who are putting out RFPs, they’re, they’re almost playing a game of gotcha in some cases with agencies, right? Or, or they’re just on a fishing expedition, because they’re curious, or they were just lazy, and they copied and pasted something that they found either in their own organization or on the internet. Seriously, this happens a lot.

GINI: I know, I know.

CHIP: Or, of course, the process is a sham. And it’s just to get through the procurement process. And they already have selected their agency of choice in advance. So the trick here is, and this is something that I talked about with the guys from RFP Associates on an episode of Chats With Chip earlier this year. The trick is that you have to be very aggressive and taking advantage of the Q&A process in RFPs to start digging for additional information. And if you don’t get it, walk away, if they’re, if it’s if it’s not just an oversight, that they’re willing to correct by giving you a legit answer. It’s not a process that you want to be part of. And you can you can figure out usually pretty quickly in these conversations, who’s who’s running a process and really wants to have something open and who doesn’t. And, you know, you want to understand, you know, what, what are their criteria? You know, what is their budget? What are their goals? How big is this process? You know, are they are they casting a net, and they’re, you know, talking to 50 agencies, in which case, walk away, your odds are so low at this point that it’s not worth all of the effort.

GINI: Yeah, and, you know, I mean, that’s how I feel about our fees in general, certainly, there are exceptions to my rule. But if they’re not going to give you budget guidance, or identify goals and objectives for the work, or include any information that helps you make a solid recommendation, it’s probably not worth your time.

CHIP: Right. And that then brings us to the flip side sort of agency bad behavior, which is where they just decide the agency decides, so just ignore the guidelines ignore what they’ve been asked to submit. And there are there is a school of thought that says you should get the the prospective client to intentionally make exceptions, you should ask for them and see if they can grant them to you. And there’s actually some research that I think Glenn has referenced that suggests that if a client makes a concession in the RFP process to you, it dramatically increases the the odds that you end up getting hired in the end. But you know, but if you’re going to go through an RFP process, and I don’t understand this, I’ve never seen it work, where agencies simply say, screw it, we’re not going to do anything related to the guide, we’re just going to do our own thing, we’re going to, you know, because they’ll just like our response so much, that they will decide to spend more than what we were told their budget was, or, you know, or they will go for our solution that has nothing to do with what they actually asked for, or, you know, whatever. Don’t do that. If you’re going to go through the process, it’s important that the client treats it as a legit process, but you need to do the same thing as well, as the agency.

GINI: Yeah, I know. And yes, I am not going to belabor the point. But I don’t understand why.

CHIP: And if you’re not, if you’re not a fit for the RFP,

GINI: Then don’t respond. Don’t waste the time.

CHIP: Please, please don’t respond. Because you know, that’s another one that I see a lot of where an agency is not qualified. They, they don’t provide the set of solutions that the client is looking for. But they believe that what they do is a better fit. And so they submit a response to the RFP that tries to take it in a whole different direction. There’s nothing wrong with reaching out to the client and saying, Hey, you know, have you thought about this? Because maybe they haven’t. But that’s very different than then responding to the RFP, out of bounds, have the conversation, see if they’re interested, if they’re not, thanks, you know, we’ll have a conversation somewhere down the road, because they may realize in 6, 12, 18 months down the road, that they made the wrong choice, that they should have gone for the solution that you offer. And you know, they’ll come back to you if you’ve treated the process respectfully. Absolutely. So RFPs, it’s all about respect, let’s get respect from both sides. But it if if nothing else from this, you know, hopefully you’ve gotten some good ideas of the things that you need to be looking out for both with prospects and clients so that you can be a more effective agency leader. And of course, we’ll have links to the actual research here as well as the episodes we’ve talked about, anything else I can manage to pull links for that seems relevant out of this. So if you’re on the treadmill, driving your car, flying a plane or a helicopter or whatever the heck it is that you do, don’t stop and take notes now. Wait, and just go look at the notes later.

GINI: Oh, boy.

CHIP: Little too much? That was too much? Okay.

GINI: I mean…

CHIP: Well, yeah. Do you have anything else to add about RFPs…

I have nothing else to add, especially after that conclusion.

Okay, well, I would say we’re coming in for a crash landing, but we were just talking about planes and helicopters so that’s probably not a good idea. Instead, I’ll simply sign off by saying I’m Chip Griffin,

GINI: and I’m Gini Dietrich,

CHIP: And it depends.

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