5 Takeaways to Help You Win Commercially

Asset 2-100We recently sat down with Thom Roose, Global Category Chair for Marketing & Communications, IBM Procurement Services (Members, listen to the full recording of the call), to discuss ways Members can be more successful in procurement-led reviews. Thom brings very deep experience buying PR services — Prior to joining IBM in 2015, he spent five years at Accenture and 10 years at P&G. Read on for his advice.

It’s about value, not price.

Procurement professionals increasingly have a level of understanding about marketing services and know the goal is value-enhancement instead of simply cost savings. That value can come in many different forms: Agencies can reduce risk for the prospective client by offering favorable contract terms, develop a standardized creative brief or scope of work in a company with dozens of different brands and formats, take the burden of chasing POs and invoices off the shoulders of the marketer, or even implement an agency performance management program.

For experienced procurement folks, price is only one of many factors. “Personally, I tend to weight it no more than 20% of the overall scorecard,” Thom said, adding “while more and more procurement folks share my perspective, as long as there are buyers new to marketing services out there, pricing will continue to be weighted too heavily.”

Understand that buying PR is not dissimilar from buying other marketing services.

Some agency leaders have suggested that PR presents fundamental differences from buying other disciplines. According to Thom, “The purchase doesn’t really vary from agency type to agency type, especially as the discipline has evolved to offer integrated services.” In fact, education is needed because Thom reports that some procurement executives — even more experienced folks — think of PR as more of a commodity than media or advertising creative.

Some procurement teams are asking for total project costs and trying to make comparisons that way.  Agencies would be well served to detail everything included in these costs to help create an apples-to-apples comparison.

Be thoughtful about staff cost and compensation.

Procurement professionals will challenge staffing plans, so agency leaders must be able to justify the proposed plan against the requirements of the RFP.  For example, procurement will ask, “Why do you need so many senior folks on the account when the scope is relatively tactical?” Agencies will win by having a strong rationale for every aspect of their proposal.

“Procurement will be working closely with marketing to make sure the staffing matches the scope, so if you have any fat in your solution, prepare to cut it out,” Thom advised.

Agency leaders often voice concern about their ability to compensate staff and maintain profitability in procurement-led engagements. Thom asserts that it’s not procurement creating a squeeze on staff compensation; it’s the market. “As long as there is an agency willing to risk a lower comp, the entire industry is at risk,” he said.

He added, “Experienced procurement executives understand that staff costs increase every year, so building escalation clauses into contracts is an acceptable process—just be sure to clearly communicate your approach.”

Consider taking a procurement executive to work.

Thom advises agencies to be proactive in helping to educate procurement executives about public relations.  Agency CFOs or even account directors should consider inviting procurement executives to the agency to get to know each other’s headaches and goals, and then schedule meetings on a quarterly or bi-annual basis to keep the lines of communication open.  “It’s a lot easier for us to negotiate with you when we’re all talking about the same thing,” according to Thom.

What other ways do procurement executives learn about agencies? During their day-to-day work as sourcing experts, procurement executives have an opportunity to learn from RFPs. Reading trade journals is a key way (Thom says that award-winning agencies stand out). They also make connections at industry and trade conferences such as the ANA Financial Management conference or ProcureCon Marketing.

Win points by helping newbies through the process.

If you encounter a procurement manager who clearly is new to purchasing marketing services, Thom suggests sharing an example of an RFP that you thought was well-structured.  “This helps in many ways, Thom said, “First you’re making sure you’re not answering irrelevant questions like ‘how many manufacturing facilities do you have?’ Second, you will already know 90% of the answers.  And third, you’ve established yourself as collaborative and that could show up favorably in your scorecard.”

When making new business assignments after receiving an RFP, agencies should consider assigning their CFOs to track of building relationships with procurement throughout the process.

Consider the win only the beginning of your relationship with procurement.

A good procurement person acts as a marriage counselor ensuring the relationship between brand and agency stays as positive and high performing as possible. He or she can help marketers understand the impact of poor process and put a penalty in place to create more efficient workflow.

Thom shared, “After an agency complained that a marketing team was killing them with revision after revision, I did an analysis on the number of hours being burned, what the cost was in terms of retainer cap, and worked with both parties to agree on an acceptable number of revisions. We put in place contractual language specifying that ‘if the number of revisions exceeds x, the agency will be paid y.’”

Procurement is increasingly a part of the public relations review process. By investing time to learn and teach, closely following the requested process, and maintaining mutually beneficial relationships can help agencies win and keep profitable relationships.

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