Mistakes Clients Make When Choosing an Agency: RFP process

In Part I, I responded to a blog post by Avi Dan on Forbes.com: "The 7 Biggest Mistakes Clients Make When Choosing An Agency." In Part II, I want to explore the Request for Proposal (RFP) process.

The RFP process is intended to be a level playing field for all participating agencies, which would be fine and fair. But in practice, RFPs seem like a more complicated process, for clients, who have to develop them, and for agencies, who have to respond to them. 

I actually don't know anyone who likes the RFP process.

The problem is that too many of them seem poorly designed.

A few years ago, we got one from an engineering-driven company, and it was clear that the committee that developed the RFP was comprised of engineers, not marketers.  The tactics and strategies that are important for successful marketing were included -- but at the end, under a Miscellaneous heading. Sometimes RFPs have questions that don't even address the issue.

Here are some elements that are the hallmark of a well-conceived RFP:

• A clear explanation of why the organization is conducting an RFP now, including the challenges the company faces. We've seen RFPs that provide minimal background, which makes it difficult to address key challenges. For example, one RFP was clear on the key challenge -- the organization was launching a new first-of-its-kind product; unfortunately, a quick search found that their product wasn't the first, and that that affects the strategy, messaging and positioning. 
• A clear explanation of what the organization is seeking in an agency, particularly the skill sets and experience.  There are lots of blurred lines out there among agencies: there are traditional PR agencies; hybrids (likes ours, cover PR and social media); and social media agencies as well as ad agencies focused on digital. Part of the process before the RFP should be to pre-qualify the sort of agency, its expertise and background that can help an organization achieve its goals. That pre-screening can help agencies determine whether they should participate. 
• Specific objectives for the program. 
• A realistic time line for the process. We've seen RFPs that requested a great deal of work to be completed in two weeks, with the promise the prospective client would respond in two weeks. That happened recently, but that's the exception. I remember one RFP process in which the client said they would make a decision within a week...which stretched out to more than a month. And I knew going into it, based on what the prospective client said, that they were never going to meet their deadline.
• A clear overview of the scope of work. One challenge is that the scope of work for a social media campaign can vary widely depending on the company, its resources and culture. This is especially a challenge when it comes to talking about social media, which can cover a lot of ground and tactics, and can require lots of multimedia content that can entail out-of-pocket expenses. 
• A clear overview of the budget. I understand the challenge in talking about budgets -- as a company you don't want to set the bar too high (say, $20,000 per month) if a hungry agency is willing to underbid (say, $10,000 per month).  But without a range, or some guidance, it's difficult for an agency to know what's realistic or not. Because one prospective client said, "we really want to see your best ideas," "we're entering an important make-or-break growth phase for the company" and "budget isn't really an issue," we provided some great creative ideas...that also happened to be thousands of dollars more than they could stomach. Knowing that budget was more of an issue, we would have provided more ideas that fit that parameter.
• A clear sense of how the proposals will be evaluated, including the structure you're looking for. A recent RFP we heard about generated proposals written in PowerPoint, Word and Excel. If there's that much confusion in how the document should be presented, there may be other problems with the procees. By the way, preparing a template for the proposals will also make it easier for the evaluating committee to review all the proposals and select a winner.

There are some other good ideas regarding RFPs on LinkedIn Groups available here; I liked the response from Paul Gilbert, a regional Director at Forrester Research.

If you disagree, please let me know. If you agree and have a great story to share, please let me know.

Meanwhile, to be fair, check out my blog post, "7 New Business Mistakes Agencies Make."

Mistakes Clients Make When Choosing an Agency

Avi Dan, founder of founder of Avidan Strategies,  recently wrote an interesting article on Forbes.com, "The 7 Biggest Mistakes Clients Make When Choosing An Agency."

Of the seven, I agree with four of them:

• Forgetting that the most important reason for choosing an agency is its ability.
• Not aligning client and agency interests and priorities is another mistake.
• Leaving the compensation discussion to the end of the process can cause contentious misunderstandings.
• Giving equal weight to all opinions at the company ignores the fact that different managers have different levels of experience, and sometimes, different expectations.

Dan suggests that conducing a search without using a search consultant is a mistake, but I disagree.  We're seeing fewer companies engage a search consultant, and yet we continue to nurture long-term relationships with our clients -- even through the roughest economic period in memory.

That said, I think a search consultant could be useful when companies decide to select an agency based on a Request For Proposal (RFP) process.

In part II, I'll write about aspects of RFPs.

Does Social Media Really Pay Off for Big Companies?

As part of the new normal, we're seeing increased need for ROI. That's a challenge with social media because the right metrics may well be different for each company.

In "Turning tweets into sales: Twitter’s allure is tough to translate into dollars, though Dunkin’ Donuts is tracking results," The Boston Business Journal wrote an interesting story that provided some details about how Dunkin' Donuts, Staples and other companies approach social media.

Here are some interesting facts:

• 35 percent or 173 of Fortune 500 companies have active Twitter accounts, according to a recent study about corporate Twitter usage in 2009 from the University of Massachusetts Dartmouth Center for Marketing Research. The study called company growth on Twitter “explosive.”
• Still, the majority of companies are somewhat clueless about Twitter’s business impact. Corporate Twitter strategies are “all over the map” ranging from hyper-engaged companies skilled at building trust with followers, down to firms that play it safe, sending out lackluster tidbits of information, said Emily Riley, analyst and research director at Cambridge-based Forrester Research Inc.
• Staples Inc. (Nasdaq: SPLS), which has a “Tweet team” of five staffers and has amassed more than 31,000 followers, are passionate about mastering the art of micro blogging. The company started using the site late last year and tweets mainly about deals and customer service. Even at a sophisticated company, figuring out the ROI of social media “is the million dollar question,” said Michelle Ormes, Staples’ director of corporate branding. “Right now...we value the number of our followers and how engaged they are.”
• Business-to-business firms are also placing increased importance on social media and Twitter. Forrester predicts that B-to-B firms will increase spending on social media from a total of $11 million in 2009 to $54 million in 2014.
• Not all companies are convinced that tweeting is a necessity, even ones that believe in social media. Boston-based car-sharing firm Zipcar has some 30,000 fans on Facebook, but does not actively tweet, although company spokeswoman Nancy Scott says the company “listens” on Twitter. Zipcar’s inactive Twitter page has close to 1,000 followers.

Some interesting anecdotes for companies considering how to approach social media in 2010. Ultimately, the decision whether and how to embrace social media still comes down to this: each organization will have to do some experimentation before finding what's right for their brand, goals and capabilities. The need to experiment in social media is a tougher sell in 2010, even with the explosion of users on social media, especially when organizations need to report ROI metrics for all their initiatives.

What is a Gateway Economy -- and why you should know about it

According to George F. Colony, CEO, Forrester Research, we're in a gateway economy -- "a portal connecting two very different eras."

In an article on the Huffington Post, "Beyond the Gateway Recession: What CEOs Will Face Next," Colony argues that "Those who can speak digital will thrive, and those who cannot will finally get the message and retire."

For PR functions, here are some of the highlights of Colony's thesis:

• Digital will be mandatory, not a choice. I think we can all agree about that. After all, there's very little left that comes into the home that's not digital. Probably water is the only thing not digital other than our food.
• Brand loyalty will be limited. This is because customers will have the ability to easily change their purchase decisions (because, in part, of digital delivery).
  
• You will sell differently. Just as social media has changed the way people interact online, it has already changed they way companies sell and compete. Colony expects this to continue, and he's right. Though I do wonder that at some point this may change because of a bottom-line need to hard sell. As it is, clients who are interested in social media are also wondering what benefits they'll receive if they start to engage via social media. The soft sell is harder to quantify.
  
• The way you innovated is dead.I thought this was one of the more interesting points Colony made.

Check out the full article, and let me know what you think about Colony's predictions.

Jeremiah Owyang's The Five Questions Companies Ask About Social Media

Forrester analyst Jeremiah Owyang has an interesting blog on web strategy. In a post from earlier this year, he suggests The Five Questions Companies Ask About Social Media.

I assume that our clients will already have asked the initial question: "What is Social Media?" But I think the other questions are worth asking, including:

• Why does it matter?
• What does it mean to my business?
  
• How do I do it right?
• How do I integrate across the Enterprise?

These are good questions that companies should ask themselves. The answers are likely to be different for each client, but should be asked.

Meanwhile, check out Burger King's very interesting viral video, "Whopper Freakout," cited by Ad Age as a brilliant digital initiative. It's not the right approach for every company, but it's effective here.