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Andrea Morrison 06/11/2008 [4]

Time for agents to make a stand

I read with interest both the letters in the October issue of M&IT headed “Clients show little loyalty to agencies” and also the Mailbag thread “Are there any ethics left in our business?”

This has been a bug-bear of mine for ages and I am currently in the process of launching a deposit, paid by company credit card on commencement of a new enquiry, which will be refundable after the event.

The fee or deposit, however you wish to dress it, would be 10 per cent of what we think the total cost of the event will roughly be. I feel this would put value to our work and stop the abuse of the services we offer.

One of the reasons clients abuse our services is that there are no terms and conditions of use; they have nothing to lose by keeping us jumping through hoops.

It’s so easy to say ‘sorry our budget has been pulled’, but they wouldn’t work for free. It’s time independent agencies stuck together and stood firm. Order your credit card terminal from your business bank and with your head held high say: “Please can I have your credit card number and expiry date?”

John Kershaw 07/11/2008

While I am sure the majority of agencies in our industry would agree whole-heartedly, sadly we are not alone in being led along by clients only for them to drop us without paying for the work we have done –it’s simply ‘the way it is’.

If I may play devil’s advocate - consider how many times we walk into a shop but do not buy anything; or invite kitchen, bathroom and window fitting companies into our homes, where they do plans, visuals and drawings, work up costs, only for us to say ‘nah, decided not to go ahead with that’ (and not felt too sorry for them in doing so).

Where is the compensation for their time and effort in pitching for a bespoke solution?

We test-drive a car, putting extra miles on it, taking the salesman out of the showroom for an hour or so, and still do not buy it!
I’m not saying there isn’t a middle ground that all agencies could explore, but the reality is clients simply won’t pay for something they decide they don’t want and if we start imposing terms and conditions on our pitch work then we are going to go out of business even quicker than the global economy is trying to send us already.

Peter Turnbull 11/11/2008

I'm sure that most agencies can cite plenty examples of where they have clearly gone way past the 'above and beyond the call of duty' mark during a creative pitch process. Whilst most potential clients are professional and reasonable in their demands, some expect 'full account management' for free, often for many weeks and months before any contract is signed. To use John's example, it's like taking the test drive car home for a year and charging the dealer for the petrol.

These types of abuse occur tend to most often when a highly creative/original solution is needed. Lots of time and money is spent on developing something brand new, specifically for the client.
Also, agencies' businesses tend to be much smaller than their clients and this can be a tremendous strain on resources and cash flow.
However, there is no need for a 'full terms and conditions' approach - If it is necessary, genuine clients are happy to pay a reasonable development fee in advance, deductable from their final bill.

Peter Turnbull
CORPERACTIVE EVENT BUSINESS

Andrea Morrison 12/11/2008

I totally agree with Peter. The client contacts us as a service provider asking for our help in sourcing a venue for their event. They have asked us to work on their behalf. If I went to a solicitors for their advice on a legal matter, relying on their expertise in law, but then turned round and said 'thanks but I've changed my mind', I think you would find I would still get an invoice. Or I have asked a web site designer to design a new site and then said 'Sorry but I have no budget' guess what - yes I think you would find I would definitely get an invoice. My point is that the client commissions us to find them a venue to research, use our office overheads in phone, internet costs, staff, lighting etc surely they should pay for our expertise if they decide not to go ahead when we have spent all that time working for them. A hotel reservation asks for a credit card guarantee when making a booking. They do not take any payment out of that card unless the guest no shows I think maybe this way might be a little more subtle in this financial climate but if we take the "development fee" if the client doesn't go ahead, then at least I have covered my overheads. As an SME I need to keep my cash flow going to keep the business running through these hard times and I can no longer afford to keep working for free.

Angela Seager 18/11/2008

Quite agree with all that is said. I have been banging on about this for years, and coluld get no-one to commit to it.
You will find on our web site we do levy a fee
and it works !
Angela Seager
\Seager |Associates

Hugo Ponsonby Smythe 16/10/2008 [2]

AIM - is it worth it?

I see from the news section that the MIA has awarded its first Gold in their standards accreditation. I ask what value there is to this. A quick look at the MIA website and I learn that this covers such important items as "power sockets" and "how often it is cleaned". Well surely if there are no power sockets it would be tough to get the hoover working! And it can't be that tough to get 60 per cent to pass. They also "insist that all AIM accredited venues and suppliers comply to legal ACTS" such as the Weights and Measures and Licensing Laws. Forgive me but what has this got to do with the MIA - these are legal requirements set by government not by a trade association. Is this of any value to the industry or is it something to keep the old MIA dog wagging as it's membership declines....

Jane Evans 21/10/2008

Clearly Hugo hasn’t kept up to date with the news. The MIA’s accreditation scheme AIM, which is endorsed by VisitBritain, will be available to all venues from January 2009 whether they are members of the MIA or not.

The beneficiaries of this will be the destination management partnerships who elect to become licensed partners. So I really don’t think that we can be accused of developing the scheme just to keep our ‘tail wagging’ - however pleasing a thought that is.

The MIA’s Standards & Principles committee have worked hard to develop this scheme in consultation with venues, agents, and corporate and association buyers. The scheme is a three-step process, which, as you state, at Entry Level does ask basic questions such as ‘does the meeting room have a plug point’ and yes while it may seem obvious that this should be a requirement of every meeting room this is not always the case; after all there are such things as extension leads which can facilitate the vacuuming!

At Gold Level venues are asked to work through 50 criteria covering everything from the customer experience through to staff training and business planning including ‘business recovery’. It’s a rigorous process which takes many hours of preparation by the venue and a process which forces the venue to examine all its business processes and to make business improvements.

These criteria documents are only available to venues that have elected to go through the process but I would be delighted to share these with Hugo, if he would care to contact me direct.

The legal requirements issue is something else entirely. What it has to do with us is simple. If the MIA authorises a venue to use the AIM brand then we need to make sure that buyers can be confident that their delegates are going to be safe and that there are no ethical or legal issues that could jeopardise their event. No, we are not the ‘events police’, but we have a duty of care to all buyers choosing to select AIM accredited venues.

We are a trade association and our remit has always been to ensure that the UK offering is second to none – we have a very long way to go but through initiatives such as AIM we are helping to ensure that the UK stands strong against its European competition.
Jane Evans, MIA

Hugo Ponsonby Smythe 21/10/2008

There may well be such things as extension leads but when vacuuming in a public place, taking on board the risk and potential for innocent hotel guests to be tripped over and potentially killed by electrocution... uh oh corporate manslaughter...we would be wise not to advise housekeepers how to perform their duties. Visit www.housekeepingpie.com for that. Point taken about AIM and I wish it well. However if the AIM scheme is to be opened to non MIA members, then rather than asking if AIM is of any value to the industry, perhaps the question should be: is the MIA of any worth?

Bill Prosser 07/10/2008 [6]

Are there any ethics left in our business?

I know times are tough but is that any reason for business ethics to be jettisoned completely?

In the last few months we have seen some professional behaviour that has shocked even this cynical old hand.

For example, in July we were asked to propose some incentive/hospitality ideas for 50 people for an Italian agency on behalf of their client. The client was interested in a programme we proposed around Royal Ascot next year with a broad range of add-ons. After working on this for three months, we were told yesterday by the client’s agency that they had shown our proposal to another London agency who said that they could offer the event at a lower cost.

Of course they could - we have done most of the work!

We were in the reverse situation last year when we were asked by a Russian client to quote on another agency’s programme. We refused and told the other agency what had happened.

How about the client that asked us to come up with ideas for the staff Christmas bash involving 100 people and £30k budget. We came up with three ideas they liked and they asked us to come in and talk about them. They admitted the budget might have to be reduced to £25k but particularly liked one of the ideas and asked us to prepare a fully costed programme.

We came up with exactly what they wanted at a cost of £18,000. They then told us they didn't have the budget and were not going to have an event.

Now, we don’t mind doing pitch work for free, but when a client asks us to develop a concept within a given budget and we deliver this why are they so surprised when we suggest they might like to pay us for the work they asked us to do?

This has happened dozens of times this year. Clients confirm that an event is happening, ask us to do work, then cancel the event and don’t understand why we want to be paid for work they asked us to do.

I know we should say that we won't do the work unless they agree to pay us for it - but this doesn't work unless all agencies say the same thing.

And have you ever tried to get a fee for an event that didn't happen from a Nigerian bank? Best of luck if you ever do.

Back to the Italians: if they had said they would pass our ideas and proposal around to other agencies to see if they could deliver it at a lower price than us (with a huge competitive advantage of not doing the initial work and knowing our prices) we would have agreed? Would you?

And what would they do if we went direct to the end client and said it would be cheaper if they came direct to us?

I’ll let you know how they feel when I've spoken to the end client!

Paul Ratcliffe 07/10/2008

I think it's time that agencies wised up to the fact that companies will steal ideas from an agent's proposal without a second thought. This used to be common place in the defense industry until suppliers started to protect themselves with an "intellectual copyright" clause which is featured at the base of each page.

Also offer your ideas for sale "If you like our ideas but choose to work with another agent, they can be purchased for £x amount to cover our development costs".

Luxury hotel brands do just this with their bath robes - this simple step stopped people packing them into their luggage.

Of course, this may not stand up in court but few corporate citizens will take the gamble.

Paul Ratcliffe, TFI Group

Bill Prosser 08/10/2008

My point is one of ethics not law - it's the other agencies I am most critical of.

We do put copyright on all of our proposals - but you can't actually copyright an idea - only how it is presented.

In any case trying to sue an event agency in Italy is a lost cause. It's the UK agency who should have refused to get involved. We wouldn't have done.

Peter Turnbull 08/10/2008

We know how you feel, Paul. This has been going on for too long.

Try doing what we do. In these cases, we charge a small, but fair, development fee, payable in advance. It’s amazing how quickly those time-wasting clients disappear as a result.

This is a good thing, as it saves you a lot of hassle and gives you more time to devote to clients who are genuinely interested in you and your offer. I’m sure we can lead by example and get the industry back into good habits.
Peter Turnbull
CORPERACTIVE EVENT BUSINESS

Peter Turnbull 12/10/2008

PS - sorry about all those commas!

Hugo Ponsonby Smythe 13/10/2008

Bill,

If you expect to be paid a fee that is all very well, but when does it stop?

Quite understandably you want the client to pay you a fee for all your hard work in putting together the proposal - and no doubt many agencies would agree with you.

But what about the hotels, ground handlers and venues etc that you in turn call when putting together the proposal?

If you are being paid a fee to do the proposal, then surely it would only be fair to pass on some of that fee to the hotels servicing you. Perhaps they should be able to charge for their time/skills etc as well - even if the business doesn't come off!

Bill Prosser 21/10/2008

I'm not expecting to be paid a fee. And in the case illusdtrated above we are the DMC/Ground Handler in the UK for an Italian agency.

My point is one of ethics between agencies.

I don't think it is ethically correct for the agency in Italy to give our ideas to another London DMC and to ask them to quote a lower price than us. And I don't think it is right for a competitor of ours to agree to this knowing that we have done most of the work and with the commercial advantage of seeing our pricing.

I may be idealistic - but we have refused to quote in similar circumstances.

If we are prepared to do this we are telling clients that we do not value the ideas we as an industry create.

A wise man in this business once told me that clients don't value something they don't have to pay for and we will all lose ot in the end if a stance isn't taken.

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