Procurement…Friend or foe?

Today, in many cases, it is the Procurement team who turn up in

Porsches, working for some of the richest organisations on the planet.

With an increasingly commoditised product and having been ravaged

by the recession, it is agencies who are struggling to make acceptable

margins.

The old game of cat and mouse is over. Today’s modern world requires

a modern and positive approach to running an agency, negotiating fees

and working with professional purchasing teams to agree a mutually

beneficial financial model.

Procurement teams, in my experience, have wised up and now

understand marketing communications (including the new world of

digital) often better than some clients or even agencies. They have

taken the time to understand how an agency works and how it makes

money. The smarter Procurement team will want to ensure that an

agency can make a good financial return, as they know how this is

critical to the long term success of the relationship and the agency.

What they won’t do is leave the chequebook open or the meter running

or indeed accept the cost of the agency’s inefficiency…It is their duty

to drive accountability and return on investment.

So what is my advice to working with Procurement and what is my advice for them?

Understand what their role is, what their objectives are and how much

power in the organisation they have. Above all, build a relationship with

them. Some of my best client relationships are with the chaps from

Procurement and I have found that they have been enormously helpful,

way beyond the contractual stage of the job.

David Ford Chief Executive

Agree/Disagree? Let David know: david.ford@brightblueday.co.uk

To find out more please call 01202 669090 or visit brightblueday.co.uk

In a previous life, I remember swapping cars to meet up with the Client Procurement team…It was not the done thing to turn up in a Porsche to plead poverty and emphasise the agency’s frugal approach to doing business.

To find out more please call 01202 669090 or visit brightblueday.co.uk

They understand the organisation and they often have a much better

understanding of the bigger picture and can be a very helpful ally if you

are having challenges with your everyday client.

Once you understand their objective, help to work with them to achieve it.

Within negotiation (and you will need to negotiate), understand where you

can give and where you can’t and set yourself clear guides of what the

agency can afford. When you reach these limits, be honest and say so.

While what we sell can be quantified in some measures, it is an art and not a science.

It is a creative industry and if you have demonstrated

insight, understanding and a passion for a client’s

business, then you can have confidence in your product

and offering and in the value you attribute to that.

Finally, know your value…Benchmark your hourly rates

to ensure that what you think you are worth is what

the market thinks! And benchmark yourself on

projects to confirm your efficiency.

For Procurement specialists, I think the challenge is

often to get agencies to see the client’s viewpoint,

specifically the bigger picture. Often we are very

focussed on us and our own needs and objectives.

Recognise that to motivate an agency you need to give them the

occasional pat on the back. Like all humans, we respond to nurture

and positive encouragement and we need to eat, so be prepared

to pay a sustainable rate and to recognise some of the real costs

of doing business.

And finally, remember that agencies can add an enormous value

to the client’s business. They build up enormous knowledge and

understanding. They often have great insight and normally will

have a team of people involved – often the agency will have far

better knowledge and understanding than the client who may not

have been there as long. So, before calling a competitive pitch,

understand the issues driving that thought from both the client

and the agency side and look at alternative options to address the

situation. Discussing performance on both sides can often shed

interesting light on problems and it can address issues and provide

simple solutions, with dramatic improvements.

A pitch process is costly, time consuming and very expensive for clients and agencies and only sometimes results in a positive improvement.

So, heard it before, or wise words? The client–agency relationship

will always be a key success factor in most client and agency

businesses – Procurement is a central part of that relationship.

So embrace it, nurture it and value it.