Shopping For An Agency Based On Price

Hi all -

It's been a few days since I've written, but this is one theme that has come up in my daily routine a few times lately, so I thought I'd blab about it for a little bit. Over the past several weeks, our agency has been in countless pitch situations with clients big and small - some right here in Annapolis. Others as far away as Richmond Virginia and Rehoboth Delaware. Of these pitches, there have been a couple that have chosen which agency they went forward with based on cost ALONE. That's right, no other factors.

This bugs me. Advertising and marketing services is one of those things that just shouldn't be done by whoever lowballs a bid enough to win the business. It should be done by someone who knows and respects advertising and marketing principles, and that a client can trust do do the thing they do the absolute best.

Look at it this way. Let's say, for example, two agencies pitch a luxury car dealer. Agency A is a top-of-the-line advertising agency with 20 employees. Agency B is an upstart agency with 3 employees working out of a basement. Who do you think is going to be able to offer the lowest prices? The one with the lower overhead, right? Right. But who is going to do the best job? More than likely the agency that costs a little bit more money. But they happen to also be the agency with the most resources, the most talent, and the most expertise. But what if Mr. agency chooser decides he wants to save a litle money?

Well, do the math. If you choose the agency that's going to save you $4,000 a month in marketing expenses, but sell you an average of about 10 cars less per month (at about $1,000 profit), you're actually losing $6,000 per month. So in reality, the cheaper agency is the most expensive. Feel me?

And that's not to mention that it is nearly IMPOSSIBLE to compare apples to apples when it comes to advertising. That's what makes it so tough when I put together a proposal for a client. I am VERY thorough, and tend to define a project or account's scope as much as I can so that I can give an accurate price estimation. Well, Joe Schmo that runs a shop out of his basement may come in with a lower price but a poorly defined scope - this usually means that they'll win the business and fail to deliver in the end, or deliver an inferior marketing campaign. I've seen it happen a million times

I guess what I'm trying to say here is that we're not selling widgets in the advertising world. As such, our services can't be treated like a commodity. The best price isn't always the best value. So don't be penny wise and pound foolish.

Let me know what you think.

Garret K. Ohm