Why free pitching doesn’t add up

We turn down over 90% of invitations to pitch for new business. As a consequence our profit margins and client retention rates are better then they have ever been – read on to find out why.

Over the years we’ve been involved in literally hundreds of situations where we’ve been invited by organisations of all types, shapes and sizes to pitch our creative ideas for free in order to win new business.

There are many, many reasons why free pitching can be a negative experience for both the agency and the client but there is however one single compelling reason why we don’t like to free pitch, and that is because the maths just don’t add up:

An average pitch for an agency such as ourselves will cost around £6k in chargeable time and associated materials costs. We receive around 5-10 invitations a year, potentially costing us up to £60k in time and materials. The average agency can expect to win 1 in 5 pitches, a good agency can win 1 in 3. The typical value of a project varies dramatically but on average for medium size agency could deliver £30k revenue. So a good agency, such as ourselves, could look to yield £90k to £100k a year in new business. However this £90k - £100k is turnover, once you’ve taken away your ‘cost of sale’ @ 40% to 60% then the maths simply don’t work.

We do agree to pitch on occasions should the conditions be right for us i.e. no more that three agencies competing, we get to meet with and discuss the brief in detail with the client decision maker and we can demonstrate solid experience specifically working in the clients industry sector.

However, we’re always happy to undertake speculative work for new prospective clients. This tends to be a hugely more positive and a mutually beneficial experience. It works on the simple basis that through gaining a fundamental understanding of the organisation, through its products, services, people, culture and resources we’re in a far better position to utilise our abilities effectively on behalf of our client. This approach nurtures two essential elements in any successful relationship; value and respect – something that free pitching can never achieve.

Well that's our perspective on free pitching. If you've got any thoughts on the subject why not let us know...

www.parenthesis.co.uk