Having been in the advertising business for over 20 years, and in the time and project tracking business for over 10 years, I’ve learned a few lessons. In fact more than a few, but unfortunately, some of them had to hit me on the head (or should I say the wallet) several times (OK, maybe a zillion times), before I learned.
1. It takes your best people away from your best clients.
2. It generally means your best people work a bunch of extra time. This happens too much and you’ll burn out your stars.
3. You work on planning, strategy, concepts and tactics in isolation from the client - you will make errors because you don't have full access to their knowledge and insights.
4. The spec work is most often not used (because you did it in isolation from the client).
5. You will lose more than you will win.
Now let’s look at it in dollars and cents. Let’s say you receive a Request for Proposal (RFP) and have 3 weeks until the presentation date. The client has provided you with a brief and you still have a lot of questions. You hesitate to ask your questions because the client has informed you that ‘all questions and answers will be shared with all of the companies pitching’. (You don’t want to give away your thinking or process to your competitors, nor do you want to make it easier for them, so you decide to ‘go with your gut’ rather than tip your hand to your competition.) Of course this means your thinking and creative will probably miss the mark (see 3 above).
So, you put your entire staff on some part of the work, and with three weeks and a team of 10 staff, you’ll often spend around 300 - 400 hours on the pitch. If you bill out at $100 per hour, you’ve spent $30,000 - $40,000 worth of time. Yikes. That’s a lot of time and energy that you might have been able to put to much better, more billable use.
What can you do? How can you avoid this colossal waste of energy and time? It comes down to being an expert and marketing yourself to the prospective clients that would benefit from your expertise. Experts are hired for their expertise. Clients will generally pay more for an expert. And clients will go further to find one. In other words, you need to position your firm as experts in something specific. It’s a tough thing to do as most creative companies feel ‘safe’ being generalists (often because they are afraid to specialize as they aren’t convinced they're good enough to be hired as experts in any specific area). The problem with that comes back to spec creative. The less expertise you have, the more likely you’ll participate in RFPs, waste a lot of time and energy, and still not really win more than 20-25% of the business you pitch.
Next time you get an RFP, make a point of tracking the cost of your time and expenses as you prepare your pitch. Then review the value of that time, and think about whether investing that amount of time and energy in your own positioning might just pay far bigger dividends.