Hope is not a business strategy: The problem with RFPs

When looking for outside support for your marketing and advertising (or your website, public relations, social media, etc.) it can be tempting to send out an RFP (Request for Proposals) with the hope that qualified vendors will respond with considered and thought-out proposals. 

But there's a problem: Vendors, whether they're ad agencies, public relations firms, web developers, or social media agencies, don't like RFPs. 

You might think, “Well that's too bad, if they want my business, they'll need to submit an RFP response.” And, to a certain extent that's true. But let's spend a moment thinking critically about this.

Why Agencies Don't Like RFPs

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This is the easiest one to explain, so let's start here. Why do agencies dislike RFPs? Because they require a disproportionate amount of effort and time compared to the payoff. 

Agencies can spend days, even weeks, creating their responses. They'll have to pull together a strategy, a team, and financials. Often, RFPs require resumes, combined years of experience, and education. That takes a lot of time and energy away from client work, and means agencies have to choose whether to put their junior talent on the response (which may limit the end product, but they'll lose less valuable time) or senior employees (whose time is worth more, and who should be focusing on client work).

Usually, it goes to the junior employees because good agencies will choose existing client relationships over hope for an RFP win.

And let's be clear — it's hope for an RFP win. There's rarely an established relationship going in (more exceptions to the RFP rule later). Agencies are putting their best on paper, but they're basing it on the broad percentages noted in the evaluation criteria: 40% creative, 40% financial, 20% understanding of the challenge, etc. It comes down to a few ideas, team bios, and the price tag — based on a few lines about the challenge and the audience.

After days or weeks of work, they send off the RFP response, hoping to hear something, anything, eventually. Often, agencies will hear nothing until they see the announcement of the winner — who wasn't, of course, them. The time gets written off as a new business expense, and the cycle repeats.

That's what happens when they lose. When they win, things aren't much better. 

First, it's never always clear if the project's budget will be much larger than the amount of time and effort spent on the response. Second, the team that worked on the response work may not work on the project. Those people are busy working on other RFP responses. A successful RFP team will be put on more and more RFPs — and often, less and less client work.

But now the trouble has only just begun, especially if price was the determining factor. It's great for your budget in the short term, but it also means that the agency can't take a break from their new business efforts to focus on your work. They have to keep sending out RFP responses to keep the the pipeline full and keep business flowing. Each RFP is another few days (or, and I'm serious here, weeks) and their win rate is probably less than 1/3.

So agencies who stake new business largely on RFPs are always working on RFP responses to keep their pipeline full.

And when margins are thin, volume is the name of the game.

Why That's a Problem

So, agencies don't like RFPs. Who cares? Well, unfortunately, you need to. Because here's the thing: if an agency can avoid RFPs, an agency will avoid RFPs. 

How do they do this? The best agencies have a few things in common:

Referrals — Most of their work is word-of-mouth or referrals. They are easy to work with and produce high-quality work consistently.

Specialists — They've built a reputation as specialists and experts in their field. Their work is well-known in their industry circles, so they don't need to pitch.

Results — They charge higher prices so that they can allocate their best people to working on client projects and not new business to keep the pipeline full.

Would you like to work with an agency like that? Of course you would! They would like to work with you too! But they aren't going to respond to your RFP, no matter how much you hope they will.

If you send out an RFP, you will only get responses from agencies that have to rely on RFPs for their business.

Exceptions to the ABOVE Rule

Of course there are exceptions to this. Some projects are so large and involve multiple partners that they must go to RFP for public transparency (e.g. major public event marketing, product placement/sales) or you're a large organization that selects partners on a multi-year cycle. 

And then there are the set set of agencies that rely on RFPs not because they can't get business otherwise (they can!), but because the business they want has to come from RFPs. In short: government work. 

Public relations agencies deal with this most often, and it's unfortunate, but likely unavoidable. 

In these particular cases, if you work in an organization that requires RFPs, I suggest a few things:

  1. Make sure you select an agency that wants your business, not one that needs it.
  2. When you issue that RFP, make it a good one. Stop just hoping for thoughtful responses and give agencies something good to work with, like a clearly and purposely written scope for the project or partnership you are seeking support on.
  3. Provide ample detail on the challenge you're facing and who your audience is.
  4. Ask for case studies, not creative concepts. Require case studies with results, not just pretty pictures.
  5. Don't make it all about pricing. Value shouldn't be based on this year's budget allocation, it should be based on results in both the short and long term.
  6. If your RFP doesn't have a budget in it, you are not done writing it. 

How to Avoid RFPs

So if you want great work, how do you find it if not by RFP?

Stop hoping agencies will find you — go find them. Find work you enjoy, and contact the agency that created it. 

Look outside your city or your region — what are the odds the best agency for your specific needs happens to be the one next door? Don't be afraid to hire an agency or partner that's a state, province, or even an ocean away from you. Judge the work on whether it works, not on the address it came from.

And it's possible that you may not need an agency at all. Consider working with us or a company like ours to make sure you're doing as much in-house as you can be, and that the work is the highest possible quality. 

Marketing is not a department — it should be the backbone and the driver of your success. Your team should be the experts on your brand, your products, and your customers and clients. Don't outsource the brains of your operation in hopes that someone else will know you better than you know yourself.

Ready to find an agency or do more marketing in-house? Get in touch, we'd love to chat with you.