Eeny, Meeny, Miney? No.

Agency execs tell horror stories about running into the PROMO 100 list during new-business pitches. In the midst of a capabilities presentation, the client will glance casually at the listing and ask, “You dropped in the rankings. Why?” Hot coals time.

Oh, there are happy stories, too. Agencies love getting a call out of the blue because they appeared in the Hot Hundred. But they fear the way some marketers rely on the list, calling a slew of top-ranked shops without checking which shops do strategy, or sweepstakes, or events. Promotion is a broad field, and agency execs dread being pigeonholed.

Review stakes are high as marketers consolidate business with fewer agencies, sign agencies of record, and pursue more strategic promotion. We can’t cram a ll the information a marketer needs into the list (which starts on page 57), so we offer this tip sheet to make your next search more productive. Happy hunting.

1. Know your business needs. You should know the size, scope, and value of the work you need before you request proposals. That way agencies know whether or not to pitch, and how to give you their best advice. Do you need help with strategy or execution? Want hands-on development or a turn-key program? Do you need national, regional, account-specific campaigns?

Set measurement criteria, too, so shops know what they’ll be accountable for.

2. Know who you’re inviting. Talk to colleagues about agencies they know. Seek shops with relevant experience, so the agency isn’t learning the business on your buck. Immediate category experience is nice, but often hard to find, and narrows your choices. Look for parallels between your category and others – automakers have done well adopting some packaged goods strategies.

3. Look for a “fit” in size and expertise. An agency should be small enough to be excited about winning your business, but not so small that you swamp them. Ideally, your account should be 10 percent to 35 percent of the shop’s total billings, says Keith McCracken, exec vp of Dugan Valva Contess, Minneapolis. “If you’re 10 percent or better, you’ll get good people put on the business. More than 35 percent, and you have to assess how quickly they can staff up to serve you.” Consider, too, how that expansion might change the culture, and whether new staffers will have relevant experience.

Make sure the agency’s strengths fit your needs. “A creative boutique may be really fun, but if it’s not good at the work we need done, it’s a poor fit,” says Fern Shapiro, group promotion manager for Unilever Home & Personal Care’s hair care and deodorant business unit.

4. Consider chemistry. Visit agencies to see what they’re like at home. Look for more than cool decor. Your tastes may not match, but your business priorities should.

5. Ask hard questions. Make agencies tell you how they’ve dealt with their biggest problems. “I like to show case studies with significant marketing problems,” McCracken says. “It’s a better gauge than knowing what clients we’ve won or lost in the last three years.”

Follow up with references, and talk to colleagues about an agency’s reputation. Look for solid middle management, long client relationships, and steady growth. Find out the principals’ visions for marketing and the agency. “It’s like looking at an annual report,” says Jay Farrell, president of Davidson Marketing, Chicago. “You have to see a company that’s set up for success” to make it worth investing your time and business.

Do a Web search. See what has been written about an agency aside from the clips it gives you.

6. Don’t assume the work you see is the work you’ll get. Top brass usually pitches new business, but doesn’t handle day-to-day work. “There are some outstanding presentations out there, but execution doesn’t always live up to the sell,” Shapiro says. “We’ve gotten burned on that – nothing irrevocable, but it’s frustrating.” Meet the people who will be working on your business. Ask how often the agency rotates business teams and what its turnover rate is.

7. Realize that agencies are suspicious of spec work. Many marketers pay agencies $5,000 for pitch creative, but require shops to sign away ownership of the ideas. “We think long and hard about that,” says Flair Communications president Allyn Miller. “We have to romance the client, but even before we respond we have to know what steps we’re expected to go through. Will we own our creative?”

There are stories of clients who send out RFPs, collect ideas, and never hire an agency. Many agencies now refuse to submit spec work for those send-me-your-ideas-and-I’ll-call-you requests.

8. Set a reasonable retainer. Payment can be figured down from client spending, or up from agency hours worked. Shops that start with client spending often use a “multiplier model” to set a retainer that covers costs (including payroll), overhead, and profit in equal portions. If the multiplier is three, for example, a third of the retainer is profit and two-thirds cover expenses. The multiplier is often negotiable. It averages 2.75 to three, but could go as high as five, making profit one-fifth of the equation.

Agencies aim for 20-percent profit on total revenues, but “not many achieve that,” says Vince Sottosanti, executive director of the Association of Promotion Marketing Agencies Worldwide.

Shops that calculate a retainer based on hours worked can estimate “full-time equivalents” – the number of full-time staffers it would take to handle all hours worked. For example, if one account exec works full-time on the business and 10 staffers each work 20 hours per week on it, the full-time equivalent is six staff members (each at 40 hours per week). Multiply that equivalent by 1,600 hours for the year. Use a blended billing rate – an average of all staffers’ hourly rates, from the president to production. Or estimate the actual hours of different-level staffers and bill separate rates – $250 per hour for the president and $25 per hour for production staff, for example. Many marketers prefer blended billing because it’s simple, and they don’t have to worry about paying extra for senior-staff attention.

9. Set a schedule to reevaluate. In three to six months, sit down again to see how actual hours compare to estimated hours. Put a ceiling on billing adjustments – for example, billings can go up or down 10 percent. “Clients have become much more focused on price and sometimes dictate a ceiling for fees, or take a past program and ask us to rebudget it,” says Fran Heller, senior vp at Flair Communications’ New York City office. “They want big, fabulous, break-through ideas, but streamlined pricing.”

10. Consider a search firm. They’ll do a lot of your homework for you. Remember, though, that no headhunter will have all agencies in its database. If you want to consider an agency the search firm hasn’t recommended, invite the shop yourself.

After all, you’re the client.

What an agency should know about a potential client. St. Louis-based Zipatoni tripled billings to $18 million last year after Miller Brewing consolidated its business there. Here’s what president Jim Holbrook likes to know before answering an RFP.

* Is the client buying on price, or on investment and results?

* What are the real business issues beyond marketing and sales issues?

* Who will make the decision, and what are the criteria for judging? Will the decision-maker(s) come see our shop?

* How many other agencies are pitching and who are they? (This is simply to help manage the expectations of our team.)

* How open is the client to new programs? Is the work just doing bigger coupons in FSIs, or do they really want our ideas? O