Agencyfinder study reveals correctable flaws in non-profits’ RFP process.
December 9, 2004 — Agencyfinder study reveals correctable flaws in non-profits’ RFP process.
Richmond, VA – When it comes to finding the right ad agency or PR firm, a recent survey shows that non-profits and foundations that use the traditional RFP as their first step in the agency search may want to re-think that process. Agencyfinder.com, the largest online agency search and evaluation service in the advertising and PR industry, cited findings of a recent survey of over 4,000 firms registered with the service that reveal some problems inherent in the way non-profit organizations and foundations secure the services of marketing professionals. “The results of the study show the traditional method of sending out a Request for Proposal (RFP) to a laundry list of agencies is no longer viable or efficient and could, potentially, do a worthy cause more harm than good,” according to Chuck Meyst, Chairman and CEO of Richmond, VA-based Agencyfinder.
Agencyfinder found that nearly two out of three agencies considered the RFP to be a waste of time and effort. “Sixty-three percent of the agency principals who responded to our survey said they thought most non-profits and foundations had already decided who would be awarded their business before they even sent out their RFP,” says Mr. Meyst. And while he conceded that many of the responses probably reflected small non-profits
rather than the more accomplished and experienced industry giants, Mr. Meyst pointed out that this belief “still results in agencies moving the RFP farther down on their priority list or maybe not even participating in the account review.”
According to Mr. Meyst, this could mean agencies that could possibly be a great match for a non-profit – and in some cases willing to donate their time on a pro-bono basis – pass on the opportunity instead, leaving the charity as the big loser. Reported one respondent to the Agencyfinder survey, “We generally will not answer an RFP (from a foundation or non-profit) since I feel we do not need to compete for free work,”
Agencies report the real problem lies in the traditional concept of what a ‘Request for Proposal’ is in the first place. Experience has shown that many smaller non-profits and foundations ask members or volunteers with limited marketing and advertising experience to draft the RFP. As a result, it’s not unusual for the RFP to be developed without help from a professional search or marketing consultant.
That practice appears to be part of the problem for most of the invited service providers. Nearly all of the agencies participating in the study reported receiving RFP’s from non-profits or foundations that were not well thought-out, confusing, too detailed or asked for wrong, or inappropriate information. To make matters worse, these RFP’s are received with more than their fair share of cynicism. Only one in four agencies said they thought the RFP’s were fair “most of the time” – none said they were “always fair.”
So what’s the rub?
“There seem to be three big issues that bother the agencies who receive these,” reports Agencyfinder’s Mr. Meyst. “Most of these agencies consider themselves to be pretty savvy and feel there’s always an ‘inside track’ – so, in many cases, these RFP’s are seen as a big CYA maneuver on the part of the non-profit or foundation, leaving no chance for the agency to even get the business. You only have to get burned once this way before you start to think every RFP from a non-profit or foundation is a waste of time.”
“The second issue is one that is common to RFP’s written for both non-profit and for-profit clients: Too many times, these documents are written for the primary purpose of collecting information on prospective agencies which the client will use to filter their large list down to that handful of agencies best suited for the assignment. As a result, a good bit of the information requested in the RFP is often
inappropriate and, many times, not even considered if the responding agency is disqualified from the search based on a previous answer.
Finally, the study showed that decision-making deadlines are rarely met by the non-profit making the requests for information. “This practice of “hurry up and wait” is really tough to take in these instances,” says Mr. Meyst. “While you might put up with that for a multi-million dollar account, it’s tough to rationalize expending the effort for something you’re going to do for a much smaller budget.”
“It doesn’t matter what kind of account is looking,” Mr. Meyst continued. “Whether it’s a local, non-profit agency or a large, multi-national corporation, the search process works best when it is broken down into four main steps: qualification, information gathering, site visits/chemistry tests and then the pitch/proposal. And it’s key to make sure the proposal isn’t just a laundry list of price quotes. Non-profits and foundations are no different than for-profit and private sector businesses in this regard – they’re trying to hire agencies that think creatively and strategically, so the process needs to give agencies a chance to demonstrate that ability.”
Agency principals answering the Agencyfinder survey seem to agree. “RFP criteria are usually based on what is needed in very tactical terms,” wrote one survey respondent. “We answered the RFP strategically to address ways to help fund the greater good of the organization, but what (they) really asked for was how to print, fold and mail a cheaper direct mail piece.”
So, how do you improve this situation and make sure non-profits and foundations are getting the best marketing help they can afford? The time seems to call for a significant change.
Meyst outlined the issues. “First, the RFP should not be used to identify qualified candidates. To find qualified agency candidates, the Internet offers immediate and unlimited access to uniquely compiled agency databases designed for just that purpose. Some of the online databases have more information and more current material than what a client is going to get today directly from an agency new business person.”
“Then, to a handful of qualified prospects, send a well-prepared, non-intrusive Request for Information (RFI), asking only for relevant information and that not already found, either in the on-line database or agency web site. From here, it’s possible to continue along the lines of what many do today.”
Respect seems to be a big issue. “Don’t ask for free (spec) creative, media or PR ideas … if you need them, offer to pay for them,” suggests Meyst “Also, be sure to provide feedback on a timely basis.” The Agencyfinder study showed that over 60% of the agencies participating in the study reported that non-profits and foundations took an inordinate length of time to get back with an answer on the award of the account. While these agencies generally considered one to three weeks to be acceptable, many of the search committees took more than a month and several never got back with the agencies at all.
“Along with respect,” says Agencyfinder’s Mr. Meyst, “Comes relationships. A significant number of our agencies said that if the non-profit took some time out to form relationships with a few pre-selected agencies first, then each side would know and understand the expectations of the other. Who knows, a worthy cause may manage to get help from more than just one source?”
“I would insert objectives and accountability into the RFP,” wrote one agency principal. “I would also be less concerned with agency background and history and more concerned with the diagnosis and prognosis of (the non-profit or foundation).
“By using on-line resources first and, where appropriate, engaging consultants, it’s possible for both the non-profit and the commercial enterprise to find a better agency in less time than they’ve been able to, previously,” says Mr. Meyst. “And in this day and age, it’s important to get back up and operating as fast as possible in order to save time and money and preserve market share.”
A comparable survey of the for-profit sector is planned for next month..
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About Agencyfinder.com – Agencyfinder.com is a service of Business Partnering International, Ltd. and was founded in February, 1997. The service is the most comprehensive database of advertising and public relations agencies on the Internet today and is intended for use by companies seeking agency support for projects, campaigns or long-term relationships. The search service is free to marketers and supported with complimentary search consulting advice (telephone and on-site consultations) provided by the BPI executive staff. Advertising agencies and public relations firms pay an annual fee to be active participants in the online database and resulting searches.
