Choosing the right agency can seem like a daunting task, and, as
David Reed discovers, it's a process both agencies and clients
often dread.

Where would direct marketing agencies be without the pitch?
Staring out of the window, bored, while trying to find a fresh
idea that will beat the control pack is one answer. On a more
stable financial footing and better able to provide existing
clients with strategic thinking is another.

The harsh fact is that only a quarter of agencies are retained
as the agency of record. Three-quarters of revenue has to be
won on a project-by-project basis, which explains why agencies
put so much effort into the process.

But what is less obvious is why clients still prefer to select
their direct marketing agencies in this way. The average
tenure for marketing managers in client companies is about
15 months. That means any specialist knowledge acquired over
the course of several campaigns leaves when they do.

As a result, knowledge of a client's business, and what
marketing has worked in the past, is often greater on the
agency side. And there are signs that this is starting to be
recognised in longer relationships. David Poole, chairman of
DP&A, told the recent Royal Mail Media Forum that more two
or three-year contracts are being signed. "Brand custodianship
is more a function of the account director than the marketing
director," he said.

Another function of the high staff turnover in client marketing
departments is that marketing directors have to take on more
responsibility. That means running pitches for advertising,
direct marketing, sales promotion, PR and any other type of
agency which may be required.

Chris Parry, group chair of Direction Group, says: "Many
clients have not got the expertise or understanding of each
of the marketing disciplines to be able to make an intelligent
decision relating to a specialist agency."

One growing solution to this problem has been the involvement
of purchasing departments in the pitch process. This not only
brings more rigour to the selection, including undertaking due
diligence checks, it also makes the choice more objective. After
all, should hundreds of thousands of pounds really be spent on
the basis of personal chemistry?

Yet three out of four direct marketing accounts are assigned
on an ad-hoc or project basis, often with only limited contact
between the two sides. For clients, the process is often carried
out in haste.The requirement for a direct marketing campaign
suddenly arises out of a sales goal or advertising objective,
but there is no pre-existing agency to handle it.

The Direct Marketing Advertising Agency Register (DMAAR) helps
about one client a week through the selection process. "We do
sometimes work to tight time constraints, where the client
says they have got to get an agency in two weeks, for example,"
admits Michelle de Young, marketing and new business manager
for DMAAR.

This type of short timescale is in decline, she points out,
although it was very prevalent just two years ago. Instead,
clients are using the Register's service to save themselves time,
while also increasing the chances of a successful client-agency
relationship.

"They could spend a lot of time meeting agencies which they
would not have chosen if they had undertaken a more thorough
process when they began," says de Young. Using the Register, a
long list of ten or 12 agencies can be quite rapidly established.
Each of these may then be asked to complete initial tender
stages to ensure they are financially stable and not excluded
through conflicts of interest.

"That has the advantage of more confidentiality. If a client
is seen out and about visiting agencies, word gets out and they
are soon inundated," says de Young. Instead, a Register client
may only need to see a shortlist of six agencies, each of which
will be quite a good fit for the task in hand.

Cost is one of the main reasons for beginning an agency search
this way.Taking into account a client's time, it can cost as much
as £50,000 to reach the stage of appointing a new agency. DMAAR
fees start at several thousand pounds and even an extensive
process will still cost less than what might otherwise have
been spent.

De Young also highlights other advantages. "Methodologies are
important - we have to work together to make the right choice
of agency. Culture is also a big issue,"she says. However, many
agencies can be excluded early on. The final sense of whether the
two sides can work together will require the dreaded 'chemistry
meeting'.

Recently, some clients have taken to getting all of the pitching
agencies together at the same time. This allows the usual
information exchange to take place in one go, saving considerable
client time. Agencies are required to bring the teams who will
ultimately work on the account, rather than their pitch specialists.
Barclays adopted this tactic for its recent appointment.

Reaching the pitch stage assumes that the client has a clear
idea of what they require. Yet anecdotal evidence from agencies
suggests this is far from being the case. If it were, then
'challenging the brief' would not be the common practice it is.
But clients do have a hierarchy of needs, as recent research by
the DMA (UK) has revealed. When asked to rate the importance of
11 different factors, 83 per cent said creative ability was very
important, with 82 per cent naming strategic planning ability.
Expertise across more than one discipline was very important to
69 per cent, while evaluation techniques only received the strongest
support among 47 per cent of clients.

Aspects of agencies that their owners often see as critical scored
less well. An award-winning record was very important to 41 per
cent of clients, the same score that was achieved by quality of
account handling. But director involvement only holds the highest
importance for 35 per cent of clients, while the client list mattered
to just 13 per cent.

Given the complexity, and sometimes contradictory nature, of these
views, it is no surprise that many agencies try to avoid the pitch
process altogether. TDA managing director Heather Westgate says:
"I hate pitching. I have a real issue with it. We sometimes have
to do it, but we avoid it like the plague if we can."

She believes agencies are guilty of not following the same advice
they give to clients when it comes to winning business. "We recommend
to clients that the best way to build their customer base is through
relationships, using member-get-member initiatives and testimonials.
But agencies never apply that to themselves,"she says.

Her agency has gained most of its accounts through recommendation
and referral, or because a client changed jobs and appointed the
agency at the new company. This allows the strengths of the
relationship, especially the ability to work together, to be maintained
and transferred."The problem with pitches is that they become 'tarts
parades'. People end up just looking at the pictures, but all agencies
should be able to do them. Take the images out of the equation and
what do you get? You don't see how an agency thinks or works in a
pitch," argues Westgate.

Pitching an account is sometimes a political exercise by a client.
The company needs to believe that its marketing is being done by the
best agency for the job, not just the best friend of its marketing
director. That sort of cronyism is relatively rare,but there is a fine
line between appointing a favourite agency and favouring a good contact. Agencies are aware of this and often use relationships to their advantage. Parry believes the new concept which his group is offering cannot be explained through conventional pitching.

"We are not looking to get onto pitch lists. I am working to get in front
of clients who may not know about the way we work and to get them to
understand what we have to offer. That way, when it comes to them looking at their marketing spend and placing pieces of that activity, they will call us," he says.

His target audience is companies spending between £1m and £4m on their marketing, but who do not have a large marketing department. Parry believes they are most likely to want a single point of contact for
a wide spread of activities. But he is equally happy to begin a
relationship by selling in just one of the group's specialisms.
For The John Watson Partnership, the issue of how to present the
agency is a different one. Its founders are well-known for a particular
approach - highly-accountable and efficient direct mail. But the new
agency is coming from a different position, seeking to act as business
partners and consultants.

"We focus on issues such as how do you improve the profitability of
your direct marketing? How do you make it more efficient and get the
most out of the limited amount of management time you've got? Rather
than, how do we create a mailing pack? It is still about talking to
marketing directors, but differently," says Tony Masters, senior
partner of The John Watson Partnership.

Paradoxically, the re-emergence of some of the 'grey hairs' of the
direct marketing industry is coinciding with a shift among the
client base. "You have to recognise that direct marketing has been
taken into large swathes of business in the past ten to 15 years. The
people who've come through those organisations as direct marketers
are reaching fairly senior positions," says Masters.

These senior marketers are now looking for a more strategic,
all-encompassing agency, rather than just campaign-based work. Their
goal is to achieve improvements in business performance, not just
uplifts in response. "Nobody else is doing it, but there is a need,"
adds Masters.Richard Arkle, founder of Oast Communications, says his
decision to start an agency in 1987 was the result of dissatisfaction
with agency services over 17 years spent on the client side. His
agency specialises in full-service, pan-European marketing communications for IT companies.

"I've seen a lot of marketing and PR conducted on automatic pilot,
restricting the service to the client. Instead, companies should take a
more active role in pursuing opportunities for their clients, enhancing
the campaign and contributing to a company's profitable growth," says
Arkle.

Agencies are in a service industry after all. Their proposition is
entirely shaped by what clients need and what they are willing to pay
for. This is visible in one hugely negative respect - the number of agency closures and staff reductions that have taken place over the past 12 months. Agencies simply cannot sell their services if clients aren't buying.

Significantly, recent months have seen a lot more activity around
agency start-ups and reformulations. New structures and ideas are coming onto the market, reflecting a different agenda on the client side.If you want to know what clients really want from an agency, you need only compare what agencies include on their credentials now, compared with five or ten years ago.

For further information, please contact:
Richard Stephens
DirectionGroup
Tel: 0118 989 8104
Mob: 07836 587096
Email: richards@directiongroup.co.uk
www.directiongroup.co.uk