Time to readdress the agency-client value exchange
Opinion
The focus on cost turns pitches into competitions of who offers the lowest price, trapping brands in cycles of poor partnerships and preventing agencies from doing what they do best. How do we fix this?
Strong relationships between agencies and clients is the cornerstone of phenomenal work, but only if they are grounded in mutual respect for time, budget and expertise.
Traditional procurement processes can often erode this foundation by turning pitches into competitions of who offers the lowest price. This creates an unfair value exchange and traps brands in cycles of poor partnerships that cost more in the long run.
It’s time to change the game.
If not run correctly, procurement processes can be devaluing, treating agencies as interchangeable vendors and focusing on cheapness over quality. Alongside this, rigid frameworks prevent agencies from doing what they do best: engaging deeply with clients. As a result, the agency’s role is reduced to box-ticking.
This model doesn’t end well for brands either. By making procurement a cost competition, brands wind up in superficial engagements where the lowest bid wins but quality suffers, leading to a cycle of dissatisfaction, churn and profit loss.
Surely, there’s a better way of working?
Performance-based, not percentage-based
Percentage-based media charges harm agency-client relationships in two ways. First, by incentivising higher spending, brands overspend on media buys that don’t deliver proportional returns. Secondly, percentage-based models don’t reflect the effort of agencies, leaving them with disproportionate costs.
Performance-based models are fairer because they align agency fees with client success. With shared risk and reward, they prioritise outcomes, not costs. Agencies are motivated to deliver high-quality work, while brands can track the direct impact, helping to justify expenditures and eliminate inefficient spending.
Clear, concise and insightful RFPs
Pitch processes are extremely resource-intensive for agencies, with each pitch averaging 175 hours and $44,000 of non-billed agency hours. Still, some brands continue to submit overly complex request for proposals (RFPs) that make agencies jump through hoop after hoop.
This lack of understanding isn’t just disrespectful of agencies’ time and money — it also pulls them away from business-critical tasks, underscoring big financial losses.
Brands must be reasonable, providing clear, concise and insightful RFPs that enable agencies to deliver effectively without unnecessary strain.
Shifting from a cost-focused lens
The pitch interchange of “can you do it cheaper?” is frustrating for agencies. Not only does it undermine the effort, creativity and strategic thinking they invest, it also prioritises cost-cutting over quality — this jeopardises the potential for meaningful, long-term results.
Brands must understand that aiming for the lowest price compromises the effectiveness of the services they receive. For mutually beneficial partnerships that drive impactful outcomes, the concentration should be on the unique value and expertise agencies bring to the table.
Be more selective
Successful agency-client relationships thrive on great experiences. But phenomenal work can’t be delivered if the agency is spread across 100 brands. In fact, 62% of clients can tell when their agency is stretched and under-resourced, citing slow response times and poor quality control.
The quality of clients matters more than the quantity. By being more selective, agencies can stay focused on delivering those high-quality experiences that lead to longer partnerships.
Agencies must ask themselves: is this client the right fit for us?
Don’t siphon ideas
Alarmingly, 84% of clients pick a winner before the pitch process begins, knowingly wasting others’ time, money and effort. This highlights a flaw in the agency-client pitching dynamic, where many brands view the process as an opportunity to siphon free ideas.
Brands should respect the intellectual property and strategic insights that agencies bring to pitches. Agencies, meanwhile, shouldn’t feel pressured to reveal all their strategies without assurance of fair engagement.
It’s about having open and honest conversations to ensure mutual respect and value.
Provide useful data
It’s common for brands to issue closed RFPs that ask what the agency will do and how much it will cost, but provide no insights about themselves. This lack of transparency shows a disregard for agencies’ time by making them do all the digging.
Brands must meet agencies halfway by providing useful data into the nuances of their goals, challenges and market positioning.
A collaborative approach eases pitch creation, sets realistic expectations and enhances the likelihood of a successful partnership.
CFOs need to be involved
Brands are increasingly bringing their chief financial officers (CFOs) into the pitching process — and it’s great. Marketing is a big-ticket item on the budget, so it’s crucial for brands to ensure that financial considerations are addressed early on.
Involving CFOs in the pitching process means critical questions get asked, ensuring the agency’s proposed strategies align with the brand’s financial goals.
This prevents scenarios where agencies win the pitch but lose the business due to budget misalignments.
Mutual respect and shared success
Mutual respect is the key of successful agency-client relationships. By focusing on price battles, brands and agencies will be locked in a toxic cycle of missed targets and inflated marketing budgets. The best and most enduring partnerships are built on a foundation of trust, transparency and aligned interests.
By moving away from cost-focused procurement processes and embracing performance-based models, brands and agencies can foster more meaningful collaborations, leading to better work, stronger relationships and greater success for both parties.
Hannah Kimuyu is managing director — performance at Brave Bison