It is vital for stability as well as growth. But one has to wonder what the incumbent knows that those agencies happily spending considerable time, and often substantial out-of-pocket cash, in pitching don't.
However, it also appears that inability to make money is increasingly the determining factor.
Few agencies make money from a new client in the first year of operations, especially if the business is won late in the fiscal year. Once the pitch costs have been considered, plus the inevitable staff changes even where resource already exists, there is unlikely to be any profit left in year one.
Then there are the terms of business negotiations, which in these hard times can reduce agency margins to the slimmest acceptable. Here the incumbent has the advantage. They know what it costs to run the account, and whether they ever made any profit or had any prospect of doing so, over the life of the relationship.
So, although it is understandable that the winning agency waxes lyrical about the value of the win, and media hacks speculate about the media spend and value of the business, maybe, just maybe, we should look out for that last sentence: "The incumbent XXX declined to repitch". Hmm!
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