I’ve written previously on the steps creative firms should take in Responding to Requests for Proposals, but here I’m suggesting we finally call bullshit and throw out the RFP altogether.
In a recent episode of 20% – The Marketing Procurement Podcast, Leah Power and I interviewed a former global marketing procurement chief from a Fortune 100 company who confessed that most of the time when an RFP is issued they already know who they want to work with.
Shortly before that interview I heard Kellogg School of Management professor and Negotiate Without Fear author Victoria Medvec advocate to buyers to use RFPs to surface alternatives to the desired solutions as a means of enhancing negotiating position, not as a means of selecting the right solution.
Both of these points of view—one from a professional purchaser and one from a business school professor and negotiation coach—speak to the issue that the role of the RFP is almost never what it is purported to be: an effective and transparent tool to select the right creative firm.
I’m thrilled that some grown-ups are finally speaking the truth about RFPs because it’s just not possible that an entire industry can so naively believe they are a good way to hire an agency when we all know deep in our bones that they are not.
Some RFPs are well-meaning-but-ill-informed attempts to bring what Cal Harrison calls “a veil of legitimacy and transparency” to an opaque and murky process. A procurement person whose days are spent buying commodities and components gets a visit from marketing who asks if they have a process in place for hiring a new agency. Procurement nods a nervous yes, reaches for the direct goods RFP and translates it, as best they can, to marketing. We’ve all seen these documents that say “advertising” in the place where last week they said “ball bearings” or “carpet cleaning.”
RFPs for creative services aren’t entirely misguided. In government organizations where mitigating against cronyism or corruption is a greater concern than the value to be created by the project, RFPs as a proper selection process make sense. Even then however, I suspect they just provide the cover for a predetermined decision.
Excepting the above, most RFPs are designed to surface alternatives to the firm that marketing really wants to work with, empowering procurement in that inevitable moment when they say to the desired firm “You’re 20% higher than the other bids.” (It’s a mystery of the universe that almost every agency is almost always 20% higher than every other agency. That’s where the name of the podcast comes from.)
I understand why clients do this—I might also if I was hiring a firm that I saw as fairly interchangeable with other firms under consideration. But those power dynamics shift when we get to specialized problems and specialized firms. Generalist ad agencies with numerous direct competitors will always struggle with these buy-sell dynamics, in and out of RFP-driven selection processes. But the agency world is fully bifurcated now between undifferentiated generalist firms on one side and deeply specialized expert firms on the other.
If you run an expert firm then you’ve likely been in a sales conversation where it was clear to both parties that your firm was the one the client needed. You were it and everybody knew it. That is a win-win moment for both parties, but not for procurement. (I once said to a procurement professional that what I want to hear from procurement is, “If you help us make a lot of money, we’ll see that you make a lot of money, too.” His reply was, “Any procurement professional would get fired for saying that,” once again proving the point that procurement is tasked with savings and not value creation.) So for the client to say, in that moment of finally finding the expertise they’ve been looking for, “Great, I’ll send you the RFP,” is the height of ridiculousness. But clients still use RFPs in such situations because too few expert firms push back, underappreciating the leverage they have.
RFPs are not the spawn of satan, they are a puzzle to be solved, a system to be gamed. Truly differentiated and discerning expert firms need not suffer under their yoke, they just need to learn how to play. But now that everyone is beginning to acknowledge this RFP nonsense is bullshit, why don’t all parties just drop the pretense and negotiate in good faith instead?