The concept of procurement and marketing teams working together in pitching or renegotiation of agency services carries, in my experience, a veneer of PC speak that often obscures the truth. Some common examples I generally hear repeated at the start of a project:
‘Oh, we’re not like other organisations, our marketing and procurement teams work hand in glove’.
Well, it can happen, but not always – not even often. Generally, there is an unhealthy power imbalance one way or the other, preventing holistic assessment either throughout a process or at a specific point. At its worst, marketing is either in the thrall of procurement, or procurement is a mute observer and box-checker.
Or here’s another:
‘Yes, I’m a procurement person but I’m really not about cost, I’m much more about value and relationship’.
Hmmm. Every procurement person I’ve ever worked with eventually reveals a certain pre-occupation with cost inputs (as opposed to value outputs). And I can’t blame them. If ‘reduce indirect vendor outlay by 15% over the next fiscal’ is in your KPIs, then there’s not much anyone can do about it.
Don’t get me wrong. I’m not anti-procurement. I can see their intrinsic value, of course I can. But some common elements of pitch mismanagement, particularly those that leave agencies with a sour taste in their mouths, come via procurement teams. And often, they can arise from the pitch panel saying one thing up front, and then doing another.
Getting to the end of a pitch all about culture and relationship and getting the A-Team (according to marketing), to be suddenly clubbed over the head (by procurement) with impossible demands to reduce cost base and margin.
Pushing the boundaries for six months on a protracted pitch process, only to be told at the end that another agency ‘satisfies compliance’ (whatever that means) or another term that has had, up until that point, no bearing on the assessment.
Finding out at the last minute that the procurement person who had sat in the corner of the workshop room making no attempt to engage, was actually vocal in feedback about the fact she wasn’t engaged.
Yes – all frustrations. And yet, the role of procurement can be critical. They can help the marketing team with board sign-off. They can help to build or endorse new or differentiated fee models. They can bring fresh perspective to commercial terms, help expediate tedious contractual discussions, and shield the newly hatched agency-marketer relationship from having to directly grub around in negotiation about money.
So, how best to bridge the marketing-procurement divides? Our experience as consultants is as outsiders looking in, but make no mistake, this can be revealing, particularly if both ‘sides’ are talking to us in separate streams, venting issues or asking advice. Naturally we will always try to assimilate different types of thinking into a process, but the insights gained from cathartic conversations can, as we all know, be invaluable to solving challenges.
Start Before the Start – and Be Honest
A procurement person, if not actually running a pitch process, should be engaged throughout in honest discussion with marketing – or, vice versa.
This involves being honest about challenges, frustrations, issues and opportunities, rather than tiptoeing around each other with platitudes or fake respect. And it needs to happen before, and not at, the start of a process or project.
Topics that can be covered include things like:
- Why – really – are we running this pitch? Beyond the corporate speak, what does success actually look like, really? What personal agendas are at play?
- Who owns what in this process and what are the points of arbitration if we have a dispute?
- What’s the real deal with the incumbent agency?
- What do we really need to look out for internally, in terms of selecting the right agency?
- Airing previous bad (or good) experiences with marketing or procurement and working out how to keep the good, and make it great, this time around
- Agree communication lines, involvement levels, panel responsibilities – the nuts and bolts
- How do we best present a united front to the board for sign-off?
From having these conversations, a game plan is developed, a level of initial trust and confidence is established, and there’s already clarity in terms of what everyone is actually trying to do.
Take Time to Understand (and learn from) Each Other
How does a procurement team in my organisation actually make decisions? How does a marketing person choose an agency? I’m betting that more often than not, both marketing and procurement teams have a relatively vague or subjective understanding about how the other is working. Be honest about what you don’t know – learn about how the other typically works and what matters behind the scenes, so you can build together with knowledge and understanding, as well as mutually improve the practice of procuring agency services.
Agree a Balanced Assessment Framework
Too often, procurement and marketing are working to the beat of different drums in assessment of agencies and at the end of a process, things don’t add up. Agree up front, with a weighted rack or similar, the process gates, the assessment methodology and the relative weight of each criteria. Don’t leave it to the end to argue about the role of ‘cost’ in determining which agency is ultimately chosen.
Present a United Front to Agencies
In my experience, a sense of disunity often stems more from marketing than from procurement. Try to avoid any sense with the agency that ‘we can work around procurement’ or that procurement is somehow less important because they won’t be the people working the relationship. Or taking the line of ‘sorry, there’s nothing I can do, you’ll need to lower your costs, it’s a procurement thing’. You need agencies to see that you’re united, otherwise the door is left open for them in negotiation to manipulate things to their own advantage, as well as creating learned behaviours and/or reinforcing negative stereotypes.
Don’t Use Each Other for Dirty Work
This is all part of being united. It’s fine for procurement to take the lead in negotiations or tough conversations – as I’ve already mentioned, this can be helpful. But there’s a difference between tough conversations and dirty work. Agree the negotiation strategy up front and be fair to the agency in terms of what’s expected, managing expectations and not deviating from scope. If something suddenly changes, you’re asking the agency to do more for less, the scope decreases, whatever it is; both procurement and marketing should front these kinds of discussions, with fairness, context and respect, rather than one relying on the other to dump on the agency from a height, ‘ask for favours’, or generally shift the goal posts in an unfair way.
Use Each Other’s Strengths to Mutual Advantage
Rather than focusing on weaknesses, play each other to respective strengths. It makes for a much better play both internally and when assessing and negotiation with agencies. Of course, there does need to be some give and take, but like any team, you should be better together.
A procurement ally can be powerful for you, marketers. And procurement people, having marketing inside the tent with you, rather than…well, you know the rest of that analogy – is surely the better way. Good luck with reaching across that aisle.
