By Philip Letts
It can be disappointing to lose out on a new business contract, but it’s even worse when you realise that you were never in the running in the first place. And unfortunately this is an all too common situation for many small media and marketing agencies in Britain today. According to independent research commissioned by blur, Britain is blighted by a ‘jobs for the boys’ culture, with the majority of contracts awarded to agencies with existing relationships rather than the best ideas.
The first challenge for many smaller agencies is convincing big businesses to give them a chance to participate in the tender process itself. 70% of small agency owners have found opportunities to work with large organisations limited due to the size of their own businesses regardless of whether they offered the best service or not. 69% had even been flatly refused the opportunity to participate in pitch processes on the grounds that their business was considered too small.
If they do make it onto the pitch list this still offers no guarantee of a level playing field. Nine out of ten (93%) small marketing agencies surveyed admitted they had participated in new business tenders where they stood ‘no chance of winning’ as the client had a clear favourite from the outset of the process. A further 86% believed they had been added to pitch lists simply to make up the numbers.
And the process itself can present significant challenges for smaller agencies, whose resources can be stretched at the best of times. Often, tender processes run by large firms can take weeks, even months, to reach their conclusion. Many smaller agencies simply do not have the ability to dedicate the time and resources required throughout this process, especially compared to larger competitors who have dedicated new business teams capable of working exclusively on pitches for weeks at a time. As a result, 87% of smaller agencies admitted that they have been forced to withdraw from pitch processes altogether.
The need for a new approach
“Why bother participating if the odds are so stacked against you?” may seem like the obvious question, but as any passionate entrepreneur knows, declining the opportunity to pitch for a contract that can fundamentally change an agency’s trajectory is an incredibly difficult thing to do. Indeed, it shouldn’t be small agencies that limit the scope of their ambitions, rather larger businesses must take a look at the way they conduct new business tenders.
The fact that pitch processes have always been conducted in a certain way or decision-makers have worked with a select group of agencies successfully in the past is no longer an acceptable excuse for making decisions that can fundamentally impact their business for years to come. These big businesses must liberate themselves from the tyranny of tradition and outdated work practices that have more in common with Victorian Britain than the digital age. They have to give smaller agencies the chance to participate in pitch processes and ensure a level playing field for all participants.
As with many aspects of life, technology is helping to create a fairer environment. Global Services Exchanges provide a new way for businesses to buy, manage and pay for core services. Most importantly, they ensure that the best ideas shine through during the pitch process and the service provider that’s best suited for the job is selected rather than one that just happens to have an existing relationship.
Appetite for change
The good news is that there is a growing sense within larger organisations that things need to change and that working with larger suppliers doesn’t always yield the best results. The same research found that 89% of decision makers in large businesses believe there are better agencies available than their existing roster and 93% would like to find an agency offering a more innovative and fresh approach to those they currently work with.
Small businesses are the lifeblood of the UK economy and this shifting mindset amongst decision makers within larger firms should be seen as encouraging. The model also needs replicating in marketing and media agencies, where smaller agencies are often overshadowed by more powerful (but not necessarily ‘better’ or more creative, or more skilful) global agency stables.
Change needs to come and it needs to come quickly. By embracing new approaches to pitch processes, big businesses will gain access to a wider pool of talent that can offer truly innovative approaches that create real value for both firms, and the wider economy as a whole.
About the author
Philip Letts is the CEO of blur Group. Throughout his career he has been responsible for running a string of high-profile web ventures operating across the US and Europe, including an established Silicon Valley venture. Philip co-founded Beenz.com in 1998, an internet currency programme. In 2000, he became CEO of Tradaq, formerly Internet Barter Inc, which became a part of a public company post-merger. Following this he was CEO of Surfkitchen which was later sold to SymphonyTeleca. Philip then decided to focus on a new enterprise, wanting to embrace the Open Source software principles whilst creating a game-changing business – this became blur Group.
About the company
blur Group is a technology company reinventing how businesses do commerce. Its Global Services Exchange delivers services differently: a new way to buy, manage and pay for core services. Approaching 35,000 businesses in 141 countries have adopted this s-commerce platform and changed the way they work.