Some prospects love good ideas and will pay for them no matter what happens. What is the professional way for a prospective customer and an agency to work amicably towards consensus?
Some agencies will only participate in paid pitches. It makes commercial sense.
Good ideas are not something mundane, nor are they effortless to come by. Good ideas from an agency are often the culmination of decades of experience, the toiling of many late nights and days by the entire agency, and incurring costs in between. Good ideas are good because great talents came together to mind meld and blossom, certainly not something anyone can easily come up with. Otherwise, agencies would have ceased to exist.
Good ideas are not patents or trademarks, and once gifted to another, cannot be retrieved. It becomes embedded in the minds and hearts of another. There is therefore every good and commercial reason to ask for a fee before a good idea is gifted away to a prospect.
Paid pitches are also the door opener for a prospect who intends to become a retained customer of an agency. The pitch fee can be applied towards the retainer program once the prospect becomes a retained customer, and a long-term relationship can then be nurtured and developed, where good ideas become refined through the continuing dialog between the agency and its new client, so that the ideas become transfigured to goodwill, brand equity, and of course, revenue and loyal customers.
Now, what if a prospect is unwilling to pay for a pitch?
Simple, the agency can forward a simple non-disclosure agreement (NDA) for the prospect to sign off, which is a simple formality to respect the intellectual property and confidential materials of the agency. It is common for prospects and retained customers to ask of the same of the agency, and it is equitable to expect to same from prospects.
The telling sign is when there is a multi-agency pitch, and a prospect expects all the agencies to sign off an NDA of theirs, but is unwilling to sign off an NDA from an agency. This is troubling because it can imply many things, and puts an agency at a disadvantage. And there have been cases where prospects have prior preferred agencies, and simply wanted to suss good ideas from competing agencies without incurring any expense. Agencies have every good and valid reason to simply move on.
Sure, there may be some agencies willing to stake everything to gamble for a remote possibility of a new business, in the rather gloomy economic climate today. But not every agency weighs such remote possibilities as viable or real. Every agency has to weigh its own business operations, profits and losses. It is a conscious choice.
In some instances, there have been prior working relationships with top executives of a prospective customer, and there will be trust and friendships that were built long before. Then trust will override all other legalities.
Good ideas are costly and difficult to come by, and have a commercial value. They are what agencies are paid for, and deservedly so.
Dr Seamus Phan is the Head of Content and CTO at McGallen & Bolden. He is an expert in branding, marketing, communication, leadership training, crisis management, and entrepreneurship. This article may appear concurrently on his blog. Connect on LinkedIn. ©1984-2018 Seamus Phan et al. All rights reserved.