Do Not Pitch That Account

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Peter Levitan
Peter Levitan




There are smiles all around.

You’ve been asked to pitch a new account or project. Your gut and P&L says, "YES, we want an account like this."

We are willing to go through the pitch wringer to get it.

But, according to your odds of winning, you shouldn’t just go for it. If you still want to "go for it," make sure you know why you want this account, why the client thinks she wants you, if the competition is insurmountable, or if this client is really worth the time and effort based on your list of client selection criteria.

Let's face it: advertising agency pitches are expensive.

Agency CEO’s and business development directors occasionally use metaphors to help describe their business development efforts. One of the all-time favorites is how similar agencies are to cobblers and shoes. Cobblers do not have the time to make shoes for their children, and too many agencies don’t make the time to run smart business development programs.

Here’s a more appropriate metaphor for the act of pitching a new account.

Agencies (OK, American agencies) often point to the career batting averages of major league baseball players when they discuss the success rate of their new business programs. As it turns out, even baseball Hall of Famers are perceived as victorious if they have a career batting average of .300.

Note: That’s only 3.3 hits for every 10 times at bat. 

Even the great Hall of Famer Reggie Jackson only had a .261 batting average. In agency think, this would mean that the agency would be Hall of Fame material if they won somewhere near three out of every 10 pitches.

Is a Hall of Fame batting average good for agencies? Lets do some agency math using this number.

Based on my personal experience, conversations with agency CEO’s, and a review of existing data, on average, a small-to medium-size agency responds to 10 RFP’s and participates in six pitches per year. Your mileage may vary, but let’s go with this.

My estimated cost per RFP is $15,000 based on 150 hours of agency work at a direct labor cost of $100 per hour. At 10 RFP’s per year, that’s a total RFP participation cost of $150,000 per year.

10 RFPs x $15,000 = $150,000

A conservative estimate of an average finalist pitch, which includes external and internal meetings, pitch management, strategic planning, writing, creative work, pitch design (including leave-behinds and supporting digital programs), travel and expenses, and post-presentation follow-up, costs an agency approximately $35,000 per pitch. If an agency does six pitches per year, that’s $210,000 in pitch costs alone.

6 pitches x $35,000 = $210,000

Wait, Wait, There’s More

Using my scenario, the total annual cost for participating in 10 RFPs and crafting six pitches is:

$150,000 + $210,000 = $360,000

But, wait. The $360,000 does not include the day-to-day costs of the agency’s annual business development program.

If you add in the business development director’s salary, agency management, creative services, analog and digital marketing, an agency could easily top out at over $300,000 in labor and outsourcing for its ongoing business development costs per year. I am estimating this number to get to a reference number. However, if your agency runs a smart 24/7 business development program and actually keeps track of all new business related costs, $300,000 should feel about right for a medium-size agency.

The bottom line? An agency could easily spend $660,000 in total labor and hard costs for RFPs, pitches, and agency marketing to have a “Hall of Fame” business development batting average of .300. 

Just Say "No"

Do you like this math?

I don’t.

That’s why you need to be very systematic in how you choose what clients to pitch. Maybe you’d be better off just saying, “No, thanks.” Use some of this new business budget to run a better targeted new business program that gets you incoming from the kinds of accounts you should be pitching -- not just any account that says, “pitch me.”

Swinging at the right new clients should improve your batting average.

This is a modified excerpt from The Levitan Pitch. Buy This Book. Win More Pitches. It is published with permission from the author. 


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