Why are paid tenders our very likely future? Because they are beneficial to both clients and agencies in their own way. Yes, these benefits are different, but they exist and let’s look at them.
Scene number 1
Let's take the current situation, a typical tender in the recent past and now.
Customers hold a tender to choose the best offer for their budget. Some clients are tempted to invite 15 agencies to the tender, hoping that there will be more ideas. One of these agencies will come up with something interesting. The customer complains that he wastes a lot of time, so he cannot meet and deeply brief all 15 agencies. Instead of a meeting, he suggests holding a conference call or simply answering all questions in writing. All agencies are on a level playing field, he says.
On the other hand, 15 agencies, knowing that there are 15 of them, understand that their chances are approximately 7%. So you need to participate carefully. It is better to participate in a tender where there will be 3-4 participants and a 25-33% probability of winning. When choosing between several attractive tenders, the agency will refuse in cases where their chances and profits are lower.
Often agencies simultaneously refuse “strange” tenders. Since the chance of winning is small, it is risky to waste expensive (literally expensive) resources - the time of good creative designers and copywriters.
Sometimes it’s difficult to refuse, especially if the customer is interesting. But then the agencies prepare the proposal “carelessly,” reducing preparation costs and minimizing risks. Leading agencies in such tenders prepare an “average” proposal from old blocks of presentations, or assign young employees or interns to prepare a passing proposal. Why do this: there is hope to get into the second round and improve there; This way you can save resources for those tenders where there are more chances.
Meanwhile, new agencies (small or without good experience) are happily trying to break through. Ignoring the risks, they create “extras” in such tenders. But they don’t have good creative designers, copywriters, since hiring good specialists is simply expensive and beyond the capabilities of a start-up agency. So, often, they send something “raw” to the tender offer.
What is the result? Everyone is busy!
Newbie agencies write 10 proposals a day and don’t understand why they lose in 90-95% of cases. They consider this to be the market norm and are simply trying to increase the number of tenders and offers.
Then the customer reads 15 mediocre, “crude” presentations and then at professional conferences complains that the creativity of Russian agencies is “not very good...”. Although, perhaps, they did not receive anything from leading agencies for such a tender.
Having received a mediocre presentation, choosing a mediocre idea, the client gets a mediocre result and is angry. Next time, the customer invites even more participants, hoping that “one of these agencies will come up with something interesting.”
Scene number 2
Near future. Let's consider another way.
REMA's recommendation is a paid tender, with some payment (Pitch Fee) at the level of 100-150 thousand rubles.
Yes, for this you will have to conduct a preliminary selection of invited agencies. Check their reputation, awards, evaluate the quality of management and select not just 15 random agencies, but 3-4 truly suitable ones, with experience in this particular segment. They are easy to advocate for in the purchasing department because they have a good reputation and resources.
What does this mean for the agency? This means that at least the direct costs of several days of work by creative designers and copywriters will be partially compensated. That is, the risk that the time of expensive specialists will be wasted is borne not only by the agency, but also partially (!) by the customer. 100-150 thousand does not compensate for all the agency’s expenses for preparing a complex tender. But they reduce the costs of preparing a tender, which means they increase its attractiveness.
What is the result? The quality is much higher! Significantly!
It is unlikely that there will be many participants paying 100-150 thousand. You should not invite more than 3-4 selected agencies, because it will be difficult to choose from 5-10 good ideas.
Since there are not many participants, the agencies will know that the chances are high and will try. They will spend resources on studying the brand, on design and creativity, and will be able to concentrate on this work. The risks taken by the agency become acceptable.
All other things being equal, agencies will not refuse such a tender, because with a paid tender the agency assumes obligations. This means that the customer will be confident that their tender will be handled by specialists from leading agencies.
The client receives a guaranteed quality offer from trusted agencies with a proven reputation, and not an “unsubscribe”. A professional team of creative designers and copywriters will definitely work on the tender.
If they don’t even have good ideas, alas: it means the work of selecting 3-4 suitable companies was not done properly.
From a financial point of view, Pitch Fee is only a small part of the overall project budget and will not play a significant role. But even agencies that lose the tender will be much more loyal to the customer.
As a result, with this approach the projects themselves will be better. After all, the project for the customer is prepared by a professional, not random, team. And the quality is worth fighting for and not risking the entire budget of the event.
Scene number 3
Right now
You sit and think - but there is something in this. Yes, there may be other, special situations from your experience. There are definitely arguments to be made. But, if you remove this spirit of contradiction, you will agree that this is a classic win-win situation. Let's get to her as soon as possible.
Draw your own conclusions.
Eventum Premo is a member and co-founder of the REMA - Russian Event Marketing Association. One of the main tasks of REMA is the development of a civilized Event Marketing market in Russia. The purpose of this publication is to show ways to improve the efficiency of the event industry.
