Surprising Agency Growth Strategy: How to Bypass RFPs and Win New Business Predictably

RFPs are unreliable for predictable agency growth. You don’t know when they will come in, from who, or for what. When RFPs do come in, they tend to drain resources and have low returns. Many agencies, however, are enslaved to this rollercoaster because they simply do not have another new business strategy.

“The definition of insanity is doing the same thing over and over again, but expecting different results.”

Let’s look at why reliance on RFPs is problematic and explore an unexpected yet better approach to bypass them and secure predictable agency growth.

Why RFPs Are Insane for Agency Growth

RFPs are not the best option for organizations that want to hire a marketing agency.

When it comes to tangible needs, like purchasing office supplies or furniture, an RFP could help you identify the best vendor. You can use a scorecard to evaluate quantifiable factors that help you make a final decision.

However, we shouldn’t use scorecards to choose a marketing agency. Scorecards cannot measure intangible factors such as strategic thinking and creativity.

For agencies, reliance on RFPs for growth leads to an unpredictable pipeline. It’s reactive, meaning that you have no control over when opportunities will come or from whom.

Let’s take a deeper look at why RFPs are killing your strategic growth and what you can do to beat the odds.

Three Reasons Why RFPs Are Holding You Back

1. RFPs Are Time Consuming

Responding to an RFP often requires moving significant resources away from existing clients to new projects that may not ever come to life. Without much promise of winning their business, you could fall victim to exploitation, especially if the prospect decides to use your work without giving credit or paying you.

According to the 4A’s New Business Activity & Resources Survey Report, smaller agencies received 10 or fewer retainer and project RFP invitations, and larger agencies received 12-30. Answering RFPs requires a lot of commitment from your strategic and creative teams. Knowing that their input could lead to lost time and unpaid work is enough to make any agency leader tense.

2. RFPs Are Expensive

It’s no secret that RFPs aren’t cheap, either in time or financial resources.

  • It has been reported that the most agencies had spent on a single pitch ranged from £28,000 ($39,500 USD) to £85,000 ($120,000 USD), with an average of £43,500 ($61,500 USD).
  • Even a decade ago, in May 2012, James Murphy, the founding partner of Adam & Eve, said, “An agency could spend £50k [($63,820)] on materials alone for a really major pitch, and that’s just the cost before man-hours are considered.”
  • More recently, former Chief Growth Officer at Dentsu, Michael Russell, shared that his team would budget 3-5% of annual contract value for most pitches. This means that one could end up spending from $60,000-$100,000 on a $2M assignment alone.

While the above might be brushed aside as ‘part of the game,’ we cannot ignore that some companies send out RFPs that cost more than they are worth. This begs the question, is this the smartest approach to new business?

3. RFPs Are Rigged

Unfortunately, in this business, proposals are rarely won through merit alone. In fact, many RFPs are won from a pre-existing relationship. So before you even start, you know you are going to face an uphill battle.

According to the 4A’s New Business Activity & Resources Survey Report, 33% of agencies size 51-100 report less than a 20% win rate, while 29% of agencies size 101-300 reported a win rate of less than 10%.

What’s more, according to agency growth consultant John Heenan, 71% of marketers admit to knowing before the pitch who will win their business. Additionally, 13% already have made up their mind before even evaluating pitches. The deck is stacked against you.

A Surprising and Smarter New Business Strategy

Unfortunately, many agencies believe that the RFP game is the only way to get new business. However, that couldn’t be further from the truth. The secret is to build relationships with senior marketing decision-marketers before the review through outbound sales.

Nearly every industry, except for advertising and marketing, has sales teams—staff dedicated to selling a business’s products or services. In fact, in our industry, we don’t even like using the word sales. We hide it by calling it business development.

Call it what you like. Outbound sales (or business development) is the proactive engagement of prospects through strategic cold calling, cold email, and social media to generate a predictable pipeline of opportunities with target prospects.

“Outbound Business Development is the proactive engagement of prospects through strategic cold calling, cold email, and social media to generate a predictable pipeline of opportunities with target companies.”

Leading agencies, big and small, are benefiting from outbound. At the Mirren Live New York 2021 Agency Growth Conference, Digitas’ CMO, Michelle Tang, shared that their proactive prospecting approach resulted in an astounding 79% win rate in 2020. The strategy led to Digitas’ New Business Development Team being awarded Campaign US’s 2020 Agency of the Year Shortlist.

With outbound prospecting, you select the types of companies you want to work with and the types of work you want to take on. You proactively reach out to these prospects through personalized outreach that focuses on specific problems the prospect is experiencing, which your agency can uniquely solve.

But the agencies that are getting outbound right aren’t trying to sell or broadcast their latest work and credentials through cold outreach.

Instead, these agencies leverage their intellectual property by offering to share relevant insights with prospects to start a relationship. What’s great about this approach is that they’re positioning themselves as an authority on a topic relevant to their prospects.

Here are three benefits of adding outbound to your business development strategy:

1. Bypass the Costly RFP Process

By building new relationships with prospects experiencing challenges you can uniquely solve, you’ll often be given project work without a competitive pitch.

Besides the apparent short-term revenue benefit, the project work will help you down the line. It’s been reported that as many as 70% of marketers use project work to vet marketing agencies. You’ll soon discover that the project is just the first step towards getting connected with more significant and longer-term engagements.

2. Get More Right-fit RFPs for Agency Growth

Ok, so you might not be able to avoid RFPs altogether. Some industries like higher education or government mandate RFPs. But this approach gets you invited to more pitches that you want to be invited to.

Remember, since it’s proactive, you’re selecting the industries and companies to target with the types of work you want to be known for. Therefore, you’re building relationships with an audience you have a right-to-win and want to win.

3. Get Shortlisted

Through outbound sales, you’ll often find yourself as the preferred agency in reviews. Why? Because instead of being one of 20 agencies the client sent the RFP to, you will already be far ahead of the game by having a pre-existing relationship with the client.

Since you’ve given the prospect value and demonstrated your expertise in solving challenges they’re experiencing, you’ll have significantly increased your chances of being the ‘predetermined’ winner.

It’s Time To Pivot. Are You Ready for Predictable Agency Growth?

The process of companies selecting and engaging agencies is begging for disruption. Along with this realization, the practice of focusing on “let’s hope we win” RFPs to land new clients is no longer serving agencies. Be in charge of your agency’s growth.

RFPs are unpredictable They drain time, money, and human capital and all too often have little return. This won’t help you secure predictable growth.

“RFPs are unpredictable They drain time, money, and human capital and all too often have little return. This won’t help you secure predictable growth.”

Instead of sticking to old habits, now’s the time to shift gears towards a lead generation (dare I say sales) approach that gets better results with fewer resources.

Outbound business development builds relationships with senior marketing decision-makers before the review. It gets you in front of right-fit prospects and leads to projects. The approach often bypasses the RFP process. And it positions you as the preferred agency, leading to predictable growth.

To learn more about building relationships using outbound, watch my free masterclass here: Three Keys to Landing 6- and 7-Figure Opportunities Predictably.

Christian Banach

Christian Banach

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