In 2020 the exhibition industry has been devastated by COVID-19. Exhibitions are slowly starting to return, but live marketing budgets will be tighter than ever. Brands will be looking for a better deal, trying to get more for their money.
In an aim to find a ‘better’ solution many brands will send out more tenders to more designers, requesting a free pitch in order to secure their business.
Pitches cost design firms an average of 10K per pitch. In normal times good companies win approximately 40% of the pitches. During the Global Financial Crisis (GFC) I saw the win ratio drop to single digits.
The same thing happens to profits margins. In normal times the average profit margin is 35%. During the GFC I witnessed this fall to under 20%.
If the average job is worth about 40K at a margin of 20%, you are making 8K profit per project.
If your winning 1 in 10 projects and each project costs about $1500 to pitch (for smaller projects), you’re losing 7K on every stand you win.
Design firms like Expo Centric will feel this pressure.
Exhibition stands are more than a pretty picture. Good design comes from a partnership between designer and client, where communication and research are carried out to create a comprehensive brief prior to the designer starting a concept. The most remarkable results are achieved when clients and designers work in collaboration. It’s a win/win.
When a client sends out an email brief to 10+ companies asking for a ‘free pitch’ without allowing any direct interaction, this is commoditising the industry and under valuing what we do.
What is a ”Free pitch”?
Free pitching is a term commonly used to describe the practice of supplying design services without payment. Clients often initiate this by requesting competing firms to provide free creative services by which they can decide which firm they choose.
It’s bad for clients and bad for design firms.
For the design firm the disadvantages are quite obvious:
- This practice undermines the value of the design service
- Pitching dramatically undercuts the financial viability of the design firm
- You are providing your ideas and IP for free
- Free pitch design briefs are often based on appearances rather then problem solving
For the client the disadvantages are slightly more ambiguous:
- Collaboration between the designer and clients is overlooked, missing crucial steps in the design process
- Client’s design problems and challenges haven’t been addressed properly and therefore remain unsolved
- Pitching emphasises the ‘creative’ aspect of design and suggests a poor understanding of the technical, commercial and marketing related values that designers build into projects
How do we tackle the current market and situation?
Many clients may not be aware of or understand the design process, therefore they don’t appreciate the value of a good design solution that is developed from a professional client-designer relationship. Upon working with a client, the design firm should discuss the best practice for developing a technical, commercial and practical exhibition solution and why they do not encourage free pitch services.
With exhibition companies globally weaker than ever, if we agree to pitch for free, we are undercutting our industry associates. This undercutting will make it near impossible for many firms to make it through this tumultuous period.
If we can stand together and get clients to appreciate what we do it will be a different story.