At the CIPSA Category Week in Sydney May 29 – June 1 2012 I invited seven senior industry professionals to be on a panel to help the audience of procurement professional “Navigate the murky waters of marketing procurement”.

In this, the fourth of the posts from that session, Stephen Brown gives his perspective:

Ultimately the success and value of any type of creative collaboration between an organization and the various external elements who are engaged in the process, is built on a foundation of trust, individual connection and positive creative tension between the prime players.

In my experience procurement’s role is to focus on providing the framework where creative interaction can happen and mutual success measured. Acting in the capacity of a trusted advisor, rather than imbedded stakeholder in the process itself. Removing waste and improving the speed & efficiency of the process is the greatest opportunity for procurement to add value.

Stephen Brown, Former Group Procurement Manager, Simplot Australia

I thought I would share a 13 point approach focusing on “creating” an efficient process framework, to help shape your thinking on where your emphasis needs to be. Keep in mind you are “buying” cultural connection and creative insights.

1. Understand the internal client’s perspective. Ensure they understand yours. Have positive common ground to work from.
2. Understand the Value and context of what you are buying: Namely creative enterprise and collaborative partnerships, which need a positive foundation to flourish. ( Not finite physical items).
3. Do not pretend to be an expert. Connect with an independent Subject Matter Expert (SME) to advise and help you understand what is important and what is critical, to enhance the quality of your process and framework.
4. In conjunction with your internal client and SME, develop a clear and concise fit for purpose specification.
5. Work with key stakeholders, including the creative provider, to map out the engagement processes and protocols. These should not be imposed but collaboratively created, agreed and signed off.
6. Set out agreed measurements of success and mechanisms of feedback. Ensure you find the right basis for benchmarks.
7.  Align payment and reward to drive desired behaviours and value delivery.
8. Ensure internal clients and providers understand accepted values and behaviours of your organization and operate within these boundaries.
9. Remember the success of any key commercial relationship centered in creativity and innovation is the responsibility of all parties concerned, not just the service provider. Stakeholders need to be accountable for their actions and own outcomes.
10. Manage the relationship do not set and forget.
11. Take the accountability to educate the stakeholders in the relationship on how to manage and successfully deliver against the service level agreement.
12. Conduct and document regular reviews about the health and vitality of the relationship. Do not allow complacency.
13. Finally, look for opportunities to celebrate success. Ensure continuous improvement and leveraged learning taken from each creative experience are instilled back into the process framework to ensure ongoing advantage to the enterprise.

At the CIPSA Category Week in Sydney May 29 – June 1 2012 I invited seven senior industry professionals to be on a panel to help the audience of procurement professional “Navigate the murky waters of marketing procurement”.

In this, the third of the posts from that session, Murray Chenery gives his perspective:

Many see procurement as a black and white process, often just focusing on the best price.

Procurement in marketing is about seeing the colour: as marketing is a strategic and creative process.

In my experience, treating marketing as just a commodity means the best relationship deal is never achieved for your brand.

If you ask a room full of marketing suppliers about their feelings about the current trends in procurement, their answer will be “they don’t like the process which just focuses on price.” “They would rather focus on the value they can bring to the business.”

Former General Manager Marketing, Target Australia and Co-Director of the L’Oreal Melbourne Fashion Festival

Suppliers would rather have the relationship with the brand manager because they are the one that they will have day-to-day contact with.

In my experience, suppliers often start from the premise that the procurement process will “screw” them on price no matter what. Therefore, suppliers will hold back on critical value-added services that can really drive your business as they feel procurement staff will not fully understand the importance of the services.

But, this is what the marketer also wants – strategies (or the colour) to help drive their business: Those strategies that can set your business on fire.

So, marketing procurement is not always about the lowest price, but more about strategic and creative solutions that can set your business apart from others at a fair price. A marketing phrase that I have used many times: ‘differentiate or die’

From my experience, there is a strong correlation between doing great work for clients and making profits. Great ideas and creativity will always cut through in a world of sameness.

Great ideas and creativity is the colour that is rich in dimension; but sameness is the black and white that is flat and lacks vibrancy.

Too many companies are about ‘value extraction’ instead of ‘value creation.’

Although cost-cutting is important, it is not a strategy to grow revenue or take market share. Creative and experienced marketing partners will help do this.

Role of procurement?

So, in my opinion, the role of procurement in marketing is absolutely critical, but in the following way:

• Helping setup a robust tender or review process based on understanding that marketing is a creative process (that is seeing the colour)
• Assisting the brand manager in briefing potential strategic partners, and
• Making a recommendation to the brand manager based on agreed review criteria (not making the decision)
• Helping trial others partners to see if they are a logical fit with the business

How do I define value in marketing?

Well, value in marketing is when you engage with a strategic partner who:

• Is willing to understand the brand’s DNA
• Who identifies and communicates market trends
• Who can access a wider specialized team, if needed
• Is proactive in identifying strategies to increase sales, reduce costs, makes you more competitive and helps differentiate your brand
• Is experienced and has strong systems and processes to react to marketplace dynamics
• Is willing to ‘go that extra mile’ when needed (and it will be needed)
• And provides a fair price

Example 1. Target’s Toy Sale catalogue

Target’s strategic print partner prints 300 million Target catalogues per year.

One year, a truck carrying 600,000 catalogues rolled over into a ditch three days before distribution to customers losing the entire load.

When Target’s strategic print partner heard of the situation, they quickly moved other clients to reprint the 600,000 catalogues overnight with no time lost in distributing them to customers.

The risk was tens of millions of dollars in lost sales.

This partner ‘lives and breathes’ Target and averted a sales catastrophe. They knew the importance of catalogues in driving weekly sales, particularly the TOY SALE catalogue.

If this printer was not treated as a strategic partner and just treated as a commodity, do you think they would have significantly impacted their own business flow and saved the day?

Example 2. Reaction time by Target’s advertising and media-buying agencies

When I was at Target, the creative advertising agency was The Campaign Palace and the media-buying agency was Universal McCann. (Still is)

Both agencies are respected strategic partners and were included in critical Target business and operational meetings.

They understood the DNA of the brand, the dynamic retail marketplace and the need for nimble and fast-reaction retailing.

Both had strong systems and processes to deliver quick turn-around tactical support advertising, when needed.

If sales were slow on a Thursday and the decision was made by 1pm to provide extra support to that week’s campaign, then we could have national radio in the marketplace by 4pm that afternoon or a full page press ad in every metropolitan newspaper the next morning (from a standing start)

Without marketing partners who know your business and the marketplace dynamics, these strategies would not be able to be implemented in such short time.

So, what are the best performance metrics for marketing suppliers?

• Agreed service levels that are established collaboratively across critical areas to drive the business, and
• Stability of account service

There is also the need to advise partners what they can do better (they don’t know what they don’t know.)

What is the best way to brief and select agencies or marketing suppliers?

I am often asked: What is the best way to brief and select agency and marketing partners?

Firstly, treat them as strategic partners.

Then, develop a clear brief delivered with the brand manager which includes:

• Brand DNA  and business background
• Market forces
• Business strategy
• How partner fits into business strategy
• Consistent and comparable reply format

Then, evaluate account service experience and skill

Then, evaluate potential partners’ understanding of your business

Then, ensure an unbundled cost approach

Then, look at the price and see if it is fair for the service, experience, creativity and systems and processes being bought.

So, when does procurement work well in marketing?

When procurement understands that marketing is a creative process

When evaluation metrics are clearly understood

When partners are briefed with the brand manager

When there is an understanding of the processes being bought

When does procurement not work well in marketing?

When there is an expectation that group tenders will deliver better outcomes.

It is my experience that group tenders do not deliver on brand’s specific needs and result in vanilla outcomes priced by suppliers to defray risks.

So, my 10 winning procurement strategies in marketing are:

1. Recognise marketing is a creative process - Be sure that you see the colour that marketing is
2. Treat suppliers as strategic partners - Because they’ll deliver the colour in the strategies that can drive your business.
3.  Understand the brand’s DNA and strategy - If you don’t, how can you expect anyone else to understand it?
4. Understand the market’s dynamics you are buying into - That’s about knowing what market and competitive forces that partners are dealing with.
5. Appreciate the history of existing relationships - Because normally, existing relationships deliver service and value way beyond their fees, as love working with your brand.
6. Brief clearly, jointly with the brand manager - This is critical to enhance the delivery of the brief and to answer questions; but also to provide a working face to the relationship.
7. Understand all the processes being bought - Often, this can be missed or not understood leaving gaps in the review process.
8. Avoid group tenders: they don’t deliver to brand specific needs - Don’t set out for mediocrity; set out for what is right for the individual business.
9. Evaluate partner’s systems and processes based on visiting their operations - You will be surprised what you can learn visiting their work environment.
10. Flexible, longer contracts build partner loyalty leading to better deals - My experience is that partners want to invest in technology and operations to drive your business, but if you offer a one year contract, they are reluctant to commit funds to help set your business on fire.

So in summary, don’t just see black and white when looking at marketing, see the colour because marketing is a strategic and creative process that can deliver differentiation and competitive advantage to set your business on fire.

At the ANA Marketing Financial Management Conference in Boca Raton, Florida, the Media Audit Council presented the results of their survey of marketers, media and procurement  in relation to their current media audit processes.

While the sample is small (53), the results of the survey are informative and insightful.

Especially in regards to the fact that most respondents were using media audits as a way to improve media performance and not simply to assess the current performance of the media agency.

The survey results show that marketers, media and procurement respondents were focused on:

• VALUE: 65% of all respondents indicated that the media audit paid for itself.
• RETURN: More than half of the respondents indicated an improvement in value of the media investment of 6% or greater (14% reported increases in excess of 10%)
• GOVERNANCE: 92% consider a media audit to be either a continuous process or something they periodically do.
• COLLABORATION: 85% of respondents rated the audit firm either “somewhat above average” or “well above average” on the attribute of “works collaboratively with my media buying agency.”
• PERFORMANCE: 83% of respondents said media audits were very important for improved effectiveness of their media investments.

A copy of the survey can be obtained at the Media Audit Council website.

Do you undertake media audits? And do you think they are useful?

Leave a comment here and let us know your experience.

At the CIPSA Category Week in Sydney May 29 – June 1 2012 I invited seven senior industry professionals to be on a panel to help the audience of procurement professionals “Navigate the murky waters of marketing procurement”.

In this, the second of the posts from that session, Russel Howcroft gives his perspective:

The great tension point in Australian business today is the lack of value attached to creativity.

There is very little sophisticated brand management, little understanding of the true purpose of brands, a lack of trust in the tools required to build a brand and an unwillingness to make the on-going investment required to create power brands.

Russel Howcroft, CEO Y&R Brands ANZ and ABC Gruen Regular

With this as the background its no wonder the procurement at the best price argument wins the debate around the marketing and management table.

It is very difficult to articulate the Value - Because the value created is indeed an X Factor.

There is such a thing as Return on Creativity - The problem is being accurate around the number.

This is why it is imperative that you see agencies as Revenue Consultants. Of all the suppliers you procure how many of them are there to consult the top-line.

How many of them have a direct affect on sales? One. Your agency.

So, I suggest you view them in an entirely different light. View them as a supplier of Growth.

And do deals with them that respect the fact that without your business growing, you will spend all your time cutting costs.

This is a guest post by Nathan Hodges, a business director at TrinityP3. Nathan applies his knowledge and creativity to the specific challenges of marketing management, with a particular focus on team dynamics and behavioural change.

Decided you really don’t want to win the business? Prefer to go with a bigger category brand instead? But too chicken to say so directly? Okay then. Let us save you the embarrassment.

Here are ten sure-fire ways to get thrown off a pitch shortlist. Believe us – they work like a dream.

One.

Hire a consultant with some ‘specialised industry knowledge’ to do your talking for you, then agree with whatever he or she says. (Make sure you only hire freelance though. You definitely won’t want him or her hanging around afterwards. These people are really annoying.)

Two.

Agree an agenda. Then make sure your senior player ignores it completely. And just for good measure, point this out now and then, with a mix of weak humour and desperation. (I’ve lost count of the times I’ve seen this succeed.)

Three.

Bring along at least three people to say nothing in the presentation. But do make sure they nod a lot, and smile a lot, and make really energetic notes whenever a client makes a comment.

Four.

Make sure your team can laugh knowingly when you mention some self-indulgent aspect of your ‘agency culture’. Wacky photos of your ‘amazing’ agency parties are great for this. You’ll be out of there in no time.

Five.

Talk about how ‘unique’ your agency is. Mention your ‘results focus’, or your ‘collaborative approach’, or your ‘digital yet full service ethic’ – any of these should do nicely.

Six.

Build a jokey, superficial ‘rapport’. (Very big in the eighties, now sadly underrated as a chemistry destroyer.) Vigorous handshakes, loud laughter, weak jokes – these are all fantastically, utterly transparent. A real pitch killer.

Seven.

Wheel out the clichés. A few ‘death by Powerpoint’ jokes can help keep things on track. And saying ‘without further ado’ a few times is always brilliant. Brilliant. Oh – and don’t forget ‘marketplace’. Oh yes. We all love that one.

Eight.

Case studies. Lots of them. None of them relevant, of course. Preferably told in painful, forensic detail by someone personally involved. And with commercial results which are – of course – confidential. (Ah. That ‘confidential’ line. Gets ’em every time.)

Nine.

Spend at least ten minutes messing around unsuccessfully with the presentation equipment. Preferably over a laptop in a huddle of two or three with puzzled expressions. Failing that, disappear under the table and try to re-connect stuff with your backside in the air. Great for destroying confidence. If you can’t show a simple presentation, they’re not going to trust you with a million bucks of production budget are they? (This is gold, you know. Gold.)

Ten.

Just lose interest halfway through. If everything else is going far too well, and it looks like you might even go through to the next stage, this is your ace in the hole. Look around, glaze over, play with your phone, or just go quiet. Works instantly if you’re the pitch leader. And if you can come across as slightly arrogant when you pull this one, then even better.

There. Use any of these in your next new business meeting and you’ll save everyone a lot of time this year.

Have I missed any great pitch killers? Let me know with a comment.