You tell us

picture_cacioppo_low_ballNine out of 10 times I agree with new business guru, Robb High’s list of 3,952 common pitch mistakes made by advertising and PR firms.

But, I take exception with Robb’s Agency Pitch Mistake #18 in which he says, “…Agencies often think if they low-ball their price in a new business competition, they increase the likelihood of getting selected.”

High says a client decision is based, instead, on feedback such as, “I like them and I trust them.”

I agree that chemistry is key. But, and this is a big but, many prospects refuse to provide ANY budget parameters whatsoever during a search.

They’ll ask you to “think big” and “show us how creative you can be.” Others will list their business challenges, and ask for strategies and tactics (all gratis, needless to say).

Then, if an agency is so fortunate, they’ll be invited to a final round of in-person presentations with the prospective client decision-makers. That’s where Robb High’s likeness and trust factors come into play.

But, and this often occurs, when the agency completes its presentation and presents a suggested budget, there’s a nervous laugh, followed by silence. Then, a senior executive on the client side will ask, “What could do within, shall we say, far more modest budget parameters?”

I’m not sure why this bizarre mating ritual occurs as often as it does, but it does.

And then a day, a week, a month (or, sometimes never at all), a call or e-mail will be placed or sent by the prospect thanking the agency profusely, but explaining they selected a competitor who seemed to “…be able to do more with less.”

In other words, they selected Robb High’s low-ball agency.

It’s not pretty. But, it’s life in the agency business. And, try as hard as we do to pre-qualify prospects at the very beginning of a pitch, many invariably hint that budget isn’t an issue. They’ll say they want the smartest and most creative partner. What they fail to add is, “We also want a low-ball budget.”

7 thoughts on “You tell us

  1. RepMan, I believe that one of the reasons this arises again and again is that agencies are simply uncomfortable discussing budgets. And that’s just insane, because the fiscal arrangements are a critical part of the client-agency relationship, and agency success on the client’s behalf. It is in the agency’s rep best interest to work through his/her pain and ask what the project/program budget is, and if it’s allocated/approved. If this isn’t provided, ask for a reasonable range. If that’s not provided, ask “What budget number is so high you’d think I was insane for requesting it?” If the client won’t budge, run away as fast as your feet can take you, and find other prospects that help you achieve your agency vision, and are willing to spend a reasonable amount to achieve their goals.

  2. Spot on as always, Eric. We subscribe to your three-point analysis. Here’s the rub, though: we’d obviously pass on a no-name lead that refuses to provide a budget. What do you do, though, when it’s a Fortune 500 prospect that’s always been on your firm’s wish list?

  3. We find if the client / prospect doesn’t or won’t share the budget, it’s either:

    A — not approved
    B — a contact that really doesn’t have decision-making authority
    C — somebody who doesn’t have a “win-win” value base

    Simply pass on those opportunities…they are a long-shot, anyway.

    Onward and upward!

  4. I tell all my agencies, “This is how much I have to spend. How should I spend it best to get max value?” That seems to work.