A Very Sad Advertising Agency Story From Keurig Dr Pepper.
Start here: By now, most people in advertising know that Kuerig Dr Pepper’s marketing team (and I must assume their procurement department) are assholes. Why AHOLES? Here is their advertising agency business development story. This from the UK’s IPA, its leader Paul Bainsfair…
“UK agencies react in horror to the bizarre Keurig Dr Pepper 360-day payment terms”
“Global consumer products giant Keurig Dr Pepper is currently running a PR agency search in the United States, where part of the ask is for agencies tendering to accept 360-day payment terms. Those that cannot are being offered the option of financing, at their own cost, through Atlanta-based, Prime Revenue.”
Are you fucking kidding me?
Why Is This Important? Cause An Advertising Agency Pitch Can Hep Your Agency Go Out Of Business
OK, yes you know that this kind of lame client shit is important to pay attention to. But, playing along with this stuff can put your agency out of business…
The cost and effectiveness of agency business development can make or break an agency. Let me give you a – real-world – worst-case example.
A few years ago a Pacific Northwest agency was one of a set of agencies trying to land a major digital account. The client’s pitch team wanted to see each agency’s strategic approach to the client’s marketing goals and the northwest agency built a comprehensive plan that included performing some market research and even the leasing of related technology. The pitch dragged on forever and the agency was racking up staff and hard costs.
The good news… the agency won the account.
Bad news… the pitch became so expensive that the agency almost went out of business – in this case, after winning the account. The agency’s costs included the cost of the initial RFP response and a four-month pitch. Add in the agency’s actual client work plus the client’s 90-day payment schedule. Yikes. The RFP response, managing and crafting the pitch itself (mega labor hours), and the actual work, once won, all added to have the agency essentially working for free for more than six months.
Could the agency have managed this insane scenario? Not sure. Every pitch and client engagement is unique. That said, the agency could have had a better handle on what was coming when they initially interviewed the client. However, I’m not sure that the client was actually forthcoming. Or worse, really knew what they needed in the first place. Or skilled in running a pitch. or skilled in working with an agency.
The takeaway is that agencies should not pitch everything. Period. Spend the time to understand the client’s needs and motivations, its past agency history, know why you should be the winner, and what the search/pitch details are – including payment terms (yes, often hard to gauge) but if anything does not feel right or professional, then bail.
Always keep in mind the cost of pitching and that, at best, an agency will only win 30% of the time.
Now ask yourself, why would an advertising agency pitch that Keurig Dr Pepper account?
Is your agency pitching too much? Read this…