How do you compare marketing agency proposals?

I ran my own marketing agency for 22 years, and for a while its biggest account was one I won by refusing to put a price on the job. Then I spent years forgetting that I'd done it.

If you're holding three marketing agency proposals that won't line up, the proposals usually aren't the problem. None of the agencies has looked at your business yet, so each one has priced its own idea of what's wrong. Pay for the look first, then compare.

Three proposals that won't line up

You need more enquiries, so you ask three marketing agencies to pitch. A few weeks later you've got three documents. One wants six months of paid search and a new website. One wants a content programme and a year of social. The third proposes a rebrand first and everything else after. One costs a good deal more than the others, and each is confident it's what you need.

Most of the advice on comparing them says the same sensible things: line up the scope, separate the agency's fee from the money that goes on media, and find out who'll do the work after the pitch. All of that's worth doing.

It still won't tell you which one to pick. Each agency has guessed at a different job, so the three prices aren't for the same thing.

A price set before anyone has looked is a guess

Each agency priced the brief you gave it, and a brief is usually a description of the symptom: not enough enquiries, a tired website, or sales saying the leads are poor. Nobody has yet worked out who buys from you, why they pick you over the next firm, or where the enquiries you do get come from.

The way pitches are bought is what causes it. The Institute of Practitioners in Advertising [IPA] is the agencies' own trade body, and its president has called pitching "largely unfunded". So none of the agencies can afford to spend a week inside your business before naming a price. They read the brief, take a view, and put a price on the view.

The price looks precise, but it's still a guess.

The question I asked a board

Years ago, running my own marketing agency, I pitched for a recycling business after another marketing agency had already quoted for the whole job. I didn't put in a lower price. I asked the board how the other agency could know what the job would cost when nobody had done the strategic work yet.

Nobody on the board could answer it, so they paid us for the thinking first, as a piece of work on its own, for a fraction of that quote.

What came out of it was a plan with every item numbered, split across the three kinds of organisation the business dealt with. The work that followed was ordered off numbered lines of that plan, and the invoices used the same numbers. They turned down five of the items along the way. The rest went ahead anyway, because no item depended on the others.

I'd love to say I worked that way every time after. I didn't. As the projects got bigger I started pitching the big job first, because that was what clients said they wanted. Even when a client said the budget was big, I never started small, and it took me a while to see that I'd dropped the one step that made the price honest.

Ask each agency one question

You can test the proposals on your desk this week, and it costs nothing.

Ask each agency: what did you find out about our business before you priced this?

If the answer is the brief you gave them, plus a look at your website, the price is a guess. That doesn't make it a bad agency. It means the comparison you're trying to make can't be made yet.

Then write down what each proposal assumes is wrong, in one line per agency. If you end up with three different lines, you've got three different views of the problem, and nobody has checked any of them. The same test works on a single offer, too, which I've written about in whether an advertising deal is worth it.

Then decide who does the look

1. You can do it yourselves. Sit your directors down and answer these in writing: who buys from you and why, where your last 20 enquiries came from, and what happened to the ones that didn't turn into work. If you can agree the answers, you've got a brief worth pricing.
2. Or pay one of the agencies to do it, separately. Ask the one you rate most to price the discovery work as its own job, and make clear you may not buy the rest. Most won't mind being asked.
3. Bring in someone who isn't pitching for the campaign, for a short, fixed piece of work, and let them hand you what they found.

Whichever you choose, brief all three agencies on what the look found, and ask them to price again. Then you're comparing like with like.

The look might find there's no job

Sometimes the look finds that more marketing isn't what's needed. The enquiries are fine and the sales follow-up is where they're lost. Or the business is chasing a kind of customer it doesn't make money on. Sometimes it finds that part of the job is better done by your own people, once they know what they're aiming at.

That's awkward when you've already spent a month on the pitch, and it's awkward for whoever does the look, because it can talk them out of the job. It still costs far less than six months of the wrong work. I'd rather find out there isn't a job than sell you one.

Questions people ask

Should I pay a marketing agency to pitch?

You don't need to pay for the pitch itself. Pay for the discovery that should come before it, as a separate piece of work. A pitch is a sales document, and discovery is the work that tells you what the job is.

What should a marketing agency proposal include?

It should say what the agency found out about your business and what it thinks is wrong. It should also say how it will measure whether its work has fixed it, and who'll do the work. If the first of those is missing, everything else leans on your brief alone.

Is the lowest-priced proposal a false economy?

Only if it's aimed at the wrong problem, and so can the most expensive one be. You can't tell which until somebody has looked.

How long should the look take?

Days rather than months. It should be a short, fixed piece of work with its own price, and you should be free to walk away afterwards.

What if all three proposals cost about the same?

Then the prices agree, and you still don't know whether their views of the problem do. Ask the same question about what they found out first, and compare the answers rather than the totals.

Nobody can price your job before they've looked at it

Send that one question to all three agencies before you read their totals again. Whoever does the look, get it done before anyone prices the fix, and the comparison takes care of itself.

I should declare an interest here, because the look is my own line of work. It's the paid first stage of the method I use, Revenue ReSET: the 48-hour Commercial System Diagnostic, two days finding out what's wrong before anyone prices the fix. How I work sets out how it runs, and there are other examples of this order of work across manufacturing, logistics, and recruitment.

Nik Stapleton, FCIM. Managing Director, Sapius Commercial Ltd.

Nik Stapleton is a commercial director and AI adviser who fixes B2B sales and marketing so that growth repeats, rather than coming down to luck. He runs his own business and his client work with AI underneath, and keeps the judgement himself. He works in short, fixed-scope sprints on the system underneath that joins the two up, then hands it back to the team. Before that, he spent 22 of his 31 years in commercial work running his own marketing agency. He has sold and delivered £9.3m of work, with client accounts up to £1.6m, and is a Fellow of the Chartered Institute of Marketing. He works through Sapius Commercial Ltd, company number 17046077. More at about Nik Stapleton and on LinkedIn.