Advertising ::

Sales promotion 30.06.08

The word “procurement” may strike fear into the hearts of agencies, but Rod Geoghegan, business development director at promotional marketing agency Wax Communications,  shows how, with understanding and an inclusive approach, you can make procurement work for you

Procurement departments have had a bad press, it has to be said. Regarded by many as evil bean counters whose only talent is to buy goods and services by the metre at the cheapest price, the very mention of them tends to send agency folk diving for their calculators and a stiff drink.

But agencies brave enough to embrace the commercial reality of procurement departments – which are here to stay – will actually find they are staffed by reasonable people (yes people!) who can be a real help to you.

The key to working productively with procurement is in building a relationship founded on mutual understanding, openness and trust. And there are many ways to do this.

Firstly, there’s nothing to be afraid of. The sooner you embrace, love and help them to do their job better, the more you will benefit from them. Procurement should be the agency’s best friend, and they can really help, for example, clarifying commercial situations with clients that may become tricky.

Get procurement involved as early in the process as possible – don’t put off meeting them because you think they are only going to give you a hard time.

Just make sure you have all the information they need in a format they can use and understand. In fact, our approach is more proactive than that – we mail our details to the procurement departments of clients we have yet to work with and it has put us on their radar and helps us immediately create a sense of openness and trustworthiness.

Transparency is all. Be open about how you work and how you charge. Don’t be frightened to show your costs and profit. If you don’t, procurement managers will think you have something to hide. Be upfront and think ahead: are third-party costs available to look at, for example?

Have you highlighted where the budget-breaking risks could arise? This kind of detail shows you are commercially aware, which again helps in the trust-building stakes – it’s one of the key factors a procurement department wants to see from its suppliers.

Make sure you give a clear picture of the value you offer – not just a breakdown of your costs, but details on how you manage the working relationship; how you keep costs within budget and the checks and balances that are in place that can warn of budget over-runs. Let them know how you benchmark your service and what your service level agreements are.

Think about your internal processes and how they can be improved to aid better working – can you improve your negotiating skills for example? Are you looking for points that unite rather than divide?

Whatever you think, procurement people are not the cynics Oscar Wilde referred to as “knowing the price of everything and the value of nothing”. What they are looking for on behalf of your clients is “good value”, and it’s up to you to prove that.

So agencies must show increased concern for quality and effectiveness, as well as productivity and efficiency. The creative must be great, but so must be the costing, pricing and negotiation. Knowing the value of the creative contribution made to the client’s business and having confidence in your processes and costs will help build mutual respect and deliver mutual benefit. Talk their language. Make sure you take a finance person or trained negotiator to every meeting with procurement – finance people speaking to finance people is a much better start point than bringing in your finance director way down the line when things have already got sticky.

Consider: do you talk in measurables and are you focusing on output and deliverables as much as costs? Include procurement in your communications with your client. Keep them abreast of any changes in activity that may impact finances.

Tell them early on, so you can work together to ensure a good result. Keep the client in the loop too when talking to procurement. Some businesses outsource their procurement and these companies can be very good at excluding the client so they do not get to see how tough they are being in the negotiation and only report back that the agency supplier is “being difficult”.

It’s your job to keep your client abreast of what’s going on. Also, remember procurement are integral members of your client’s team, so approach them the same way you would your marketing client.

Believe it or not, procurement are people too – so send them Christmas cards, as you would with the marketing department, thank them for their help and really work hard at building that relationship.

Help them understand who you are, how you work, how you charge and help them see you as people, not as numbers on a spread-sheet. It all comes down to mutual understanding and collaboration.

By keeping open the lines of communication and listening to each other, agencies and procurement should learn to work side by side rather than head to head, as is often the case today.

::

Some thoughts on blogging and how to avoid the pitfalls.

A look at the future of digital advertising by Helgo Tenno

Excellent paper on brand advocacy by Paul Marsden.

Marketing ::

Directory-enquiries firm 118 118 has just handed its top job to former Superdrug marketing director Gerry Murphy, while several bosses with marketing backgrounds were listed in Marketing’s Power 100.

ROBIN AULD, SALES AND MARKETING DIRECTOR, DOMINO’S

Yes. It’s said that the two most important skills a chief executive needs are the ability to demonstrate strong leadership and motivate colleagues. You can’t motivate people without understanding what makes them tick, and no person can better understand how different we all are than a marketing director.

As for leadership, it’s all about motivating people toward a common goal, which is a pretty good definition of a marketing director’s role in itself.

Add to this a marketer’s communication skills, logical yet creative thinking, team working and ability to manage people, grow business, hit deadlines and meet budgets, and you have a pretty good chief executive on your hands.

RICHARD HUNTINGDON, DIRECTOR OF STRATEGY, SAATCHI & SAATCHI

Yes. Others in the organisation may have greater experience at managing the supply side of the business, but this is often precisely why marketing directors make great chief executives – because they are dedicated to understanding how to generate fresh demand – they are focused on growth.

Add to that their innate belief in the commercial power of brands to extract value from consumers and the truth is they are often perfectly placed to drive the business forward. Marketing directors also recognise the importance of emotionally engaging their audience. If they apply this within their organisation, they will have a motivated and productive workforce, too.

ROD GEOGHEGAN, BUSINESS DEVELOPMENT DIRECTOR, WAX COMMUNICATIONS

Yes. But 10 years ago, the answer would definitely have been no. There has been a sea-change in marketers’ calibre – they are no longer about fluffy words and pretty pictures.

Today’s successful marketers are commercially savvy, hard-nosed business people who know every aspect of a business and consider the bottom line in every decision they make.

They also know the brand is everything and have become the spokesperson for the consumer – again vital in today’s market.

Marketers, particularly those who have worked their way up through a business, are perfectly placed to lead the board – and even more so in a recessionary market, where they can deliver real ROI from the front.

JONATHAN HARMAN, SENIOR VICE-PRESIDENT EMEA, CARLSON MARKETING

Yes. The question should be why wouldn’t a marketing director make a good chief executive. Customer-centric businesses are winning today, so who better to lead them than someone able to grow the value of the customer base?

The ability to deliver profits by looking at customers, brands and markets commercially and creatively has earned marketers their places at board tables and make them natural candidates for the top job.

Today’s board-level marketers need great relationships with their finance and operational colleagues, just as chief executives do. An interesting question is whether they change the balance of power and, if so, whether the consumer wins.

::