Category Archives: Marketing

If You Can Marry Magic to Logic You Might Just End the Marketing Mayhem

In our last post where we asked if marketing mayhem got you down, we noted that, in many organizations, Marketing is still one of those sacred cow categories that Procurement has (very) little influence over (but yet often accounts for [up to] 20% of spend).

And since it needs to have a substantial impact on sales and revenue at that spend volume, it’s important that the spend be effective as well as efficient. This means that not only does the organization have to make the spend that is most likely to lead to a return, but it can’t overspend in the double digit percentages on a significant percentage of spend if it wants to get the maximum ROI. But when a considerable portion of the spend is on consumables (like print) or commodity services (like website design, social media marketing, or production overhead costs), that spend has to be efficient. But when its managed by Marketing, it typically isn’t.

But as a Procurement professional, whom Marketing often sees as the enemy who only wants to help Finance cut their budget as Procurement cuts their spend, chances are you won’t ever get to lay a hand on this spend unless you can change the status quo, which starts with changing the way Marketing sees you. In order to do this, you have to look like someone who is their friend, and not their foe, and this will involve mastering the marketing way — walking the walk, talking the talk, understanding, and working towards their viewpoint (spend money to make money, even if they can’t measure it). (Except that you will work with Marketing to take action to make sure that spend is accompanied by measurements and metrics that will help Marketing gage which spend is most successful with respect to a particular goal.)

Only once the walk, talk, and focus is mastered can Procurement get to the message, which has to revolve around Agency (Lifecycle) Management, as discussed in a recent six-part series over on Spend Matters Plus on Mastering the Marketing Way by the anarchist and the doctor. As of our last post, only the first three articles were available. Now the entire series is available. And in the last three articles you get a deep dive into agency management support, intelligence, training, and how to create a great RFX. If you want good results, you need a good RFX — and creating a marketing RFX is not like creating an RFX for commodity goods.

the doctor recommends that you check out the rest of the series, which is the most in-depth series on mastering marketing spend for Procurement that has ever hit the Procurement bit stream.

Enjoy.

Marketing Mayhem Got You Down? Maybe It’s Time to Master the Marketing Way.

In many organizations, Marketing is still one of those sacred cow categories that Procurement has (very) little influence over but yet often accounts for (up to) 20% of spend. It’s also one of those categories that, like packaging, logistics, and MRO, straddles the boundary between direct and indirect (which are, as you know, two categorizations that SI despises because it’s strategy and complexity that matters). And, even though it (should) have a substantial impact on sales and revenue, the reality is that it has a much greater effect on the bottom line as an average marketing organization is overspending in the double digit percentages on a significant percentage of its spend — especially when the spend is on consumables (like print) or commodity services (like website design, social media marketing, or production overhead costs).

But mastering the marketing way is not easy — marketers, like financiers, have their own language, their own modus operandi, and their own tastes and in each aspect are often quite different than Procurement, who they tend to distrust because they tend to firmly believe you have to spend (lots of) money to make money, so Procurement’s agenda of reducing spend runs counter to everything they believe in. And, conversely, Marketing’s traditional focus of spending their entire budget to raise brand profile and sales (even if not absolutely necessary) runs counter to everything Procurement believes in.

But this is just the tip of the marketing mayhem that Procurement has to get a grip on if it wants to help the organization get a grip on marketing spend. In order to even get through the door and get a foot in the marketing department, Procurement not only has to appear non-threatening and not focussed entirely on spend reduction, but has to talk the talk (and master the marketing lingo), walk the walk (and dress for marketing success), and live the life (to the point that they are comfortable with the marketing way).

But this just get’s Procurement in the room. In order to get Marketing to listen, the “savings” message has to be buried, and the focus has to be on what marketing cares about — helping them get the best creative talent and ensuring they have as much money as possible to do this. (In other words, it’s about helping Marketing achieve “cost control” on non-value added products, like print, and services, like commodity social media campaign management, web design, or production house services.) The best value marketing can bring is a campaign that increases brand value (perception), and this takes the best talent, who want the top dollar. Procurement has to be able to convince Marketing that they can help Marketing do this by better cost control and better processes.

Then, once Procurement get’s the core messaging right, they have to bring the right process messaging. Some Marketing departments are still in fax, email, and spreadsheet hell when it comes to tenders, bids, and negotiations. They don’t have good supporting platforms, processes, or tender management support. This is the value — and power — that Procurement can bring. But the messaging has to go beyond the canned e-Negotiation messaging that Procurement was sold on. Marketing projects are not typical products or services and Procurement has to understand this to get Marekting’s support.

Procurement has to understand Agency (Lifecycle) Management, the importance of scope of work, the nature of agency search consultants, market intelligence (for marketing), and campaign management, among other critical marketing terms and techniques. When you put it all together, the education and understanding needed to even approach the sacred cow marketing spend is quite considerable indeed, and the education available to you quite limited. Until now.

Over on Spend Matters Plus, the first three parts of a new six-part series on How to Get Marketing Spend Under Management by the sourcing doctor and the spend anarchist are up for your educational pleasure. This in-depth series, which will take you through mastering the marketing way, understanding the value drivers, engaging executive support, bringing a message of structure and support in agency management, going deep on tender support, and agency intelligence, is just what you need to understand marketing and finally get marketing spend under control in 2016.

We hope that this ground-breaking first-of-its-kind series is just what you need to take your organization’s spend management to the next level. For those of you wanting to dive in, here are links to the first three posts:

Enjoy!

Consumer Damnation 73: Individual Consumers

Of course individual consumers are a consumer damnation (and you were just reminded of that while trying to keep the shelves stocked this holiday season). They are the consumer damnation. Corporations are bad. Governments are worse. But individual consumers take the cake, especially considering most of them bring their views to corporate and government purchases. And you are left trying to deal with the inanity and the insanity. When dealing with consumers, damnations are plenty.

Consumers are fickle.

Their tastes can change overnight. Today they want red. Tomorrow they want black. Then they don’t want the product at all because the competitor’s product glows radioactive green.

Consumers are demanding.

They want the newest operating system, the biggest screen, the fastest processor, the most spacious hard drive, the longest battery life, and the absolute lowest price for that new smartphone, even though all of these requirements might be mutually exclusive with today’s technology. And the minute you don’t deliver, they abandon your product to wait for the product from your competitor who is promising more than your current offering.

Consumers are impatient.

If you promise 72 hour service, you better deliver in 48 hours or they will be calling every hour asking where that service professional is. And if you can’t repair the product, you better have a replacement on hand or they will be demanding a refund for the service plan they purchased.

Some consumers are vindictive.

Your product didn’t perform. It broke a day after the warranty. The store wouldn’t take it back. Complaints are filed with every better business bureau and consumer protection agency the consumer can find, and that’s a best-case scenario. If the consumer discovers that there was a banned or dangerous chemical in the composition of the product, they rally a few friends, get a lawyer hungry for some media sensation, and launch a very public class action lawsuit. And if they get hurt opening the hard shell or sick licking the lead paint, that’s a multi-million lawsuit coming your way.

And of course Procurement will be on the hook for not getting the product on the shelves before the consumer tastes change, not getting the price point low enough to appease the consumers enough to buy the company’s product when it is missing a new feature just included in a competitor’s product, when the company contracted for service doesn’t deliver fast enough, or when the supplier ships a defective unit and a consumer gets hurt and sues in a very public way that is very damaging to the brand.

Consumers might be the reason the company, and Sales and Marketing, exist, but they are a perpetual damnation to Procurement who will have to deliver on every insane and inane promise made by Marketing or Sales (which are, as we know, their own damnations).

The Marketing Spend RFP – Everyone is debating over the death of it — I think it needs to be improved Part II


Today’s guest post is from Mat Langley, a Strategic Advisor and Procurement Executive with 14 years experience in leadership roles in strategic sourcing and category management in Europe, Africa and Asia across Finance, IT Outsourcing and Oil & Gas industries who is currently associated with Shortlist.co.

In this post I am suggesting three areas the tools we’re implementing need to change to give Marketing what they need and then I’d love to hear any more ideas/suggestions that you have.

The ideas below are based upon the fact that a significant percentage of marketers (greater than 50% according to a July study by Walker Sands2) believe that we’re not investing enough in the right amount or the right type of solutions for them.


eMarketer.com Marketing Attitudes
1. The tools we’re providing need to improve usability – day 1

A recent international survey of Procurement Executives by Ivalua shows that we are focused on transforming the toolsets we’re using today — 80% of us consider Digital Transformation an opportunity3. That’s fantastic – now our focus needs to continue finding tools that are simple for marketers to use — on day 1 — not year 1. Preferably they should have modern interfaces and be SaaS so Marketers don’t have to use one brain at home and another at work.

2. The tools we’re providing need to improve access to qualified agencies

With the significant increase in channels and the number of content components that need to be created – access to a broader set of qualified specialist agencies to meet campaign needs is required. We need to provide tools that let marketers find, engage and then partner with agencies big and small across the specialist spectrum regardless of whether they are across the street or across the globe. And no, I’m not recommending that long-term relationships or that strategic and broad partnerships aren’t important — I’m simply pointing out that Marketing needs an agile toolset to deliver against compelling (and evolving) challenges — and they need access to partners ‘on demand’. This needs to be done in a way that meets our obligations to protect the organization commercially while bringing in the best and brightest vendors.

3. The tools we’re providing need to improve the creation of Request for Partnerships (RFPs) – perhaps they could even be user friendly?

Everyone in the organization has too much work… We need to provide tools that allow Marketers to find and share best practice workflows, templates for briefs, easy access to current best practice questions and that have the maximum amount of automation built-in for comparisons, approval workflows, agreement signatures, and so on. And our tools need to integrate with other tools marketers are using to get the job done – whether that’s Dropbox for file storage, Slack for communication, Office365 for email and yes, even your ERP system! And most of all the tools we choose need to help engage agencies and build long-term partnerships – not drive them all into a single box as described by Kirk Cheyfitz in his piece on ‘6 New Reasons to Kill the RFP4:

I think the fact that you put your RFP out only to agencies you really like is a demonstration that it wasn’t too closely allied to the mass, mindless cattle calls that I rail against. Then you actually seem to ask open-ended questions that invite the respondents to define or re-define the conversation. And that puts you completely outside classic RFP territory. Even I would respond to an RFP like that.

I believe that with a renewed or for many an on-going focus on the above 3 items we can align with Marketing and let them take control of their Request for Partnerships which will, hopefully with the right tools, lead to RFPs being done in days and weeks – not months and with less frustration and pain for all stakeholders involved: Marketing, Procurement and Agencies. This should lead to more of the Marketing spend being influenceable and competitive, thereby addressing both obligations of procurement to the marketing team and the broader organization.

Thanks, Mat.

2 Walker Sands State of Marketing Technology 2016 Understanding The New Martech Buyer Journey
3 Ivalua. (2015, 3 November). International Survey Procurement Executives, PROCUREMENT IN THE DIGITAL AGE: Measuring the impact of Digital on Procurement Departments.
4 Kirk Cheyfitz. (2015, April 02). 6 New Reasons to Kill the RFP: Find Innovators, Not Commodities.

The Marketing Spend RFP – Everyone is debating over the death of it — I think it needs to be improved Part I


Today’s guest post is from Mat Langley, a Strategic Advisor and Procurement Executive with 14 years experience in leadership roles in strategic sourcing and category management in Europe, Africa and Asia across Finance, IT Outsourcing and Oil & Gas industries who is currently associated with Shortlist.co.

I want to start with a bold statement — in Procurement, the most challenging group to work with is most often Marketing. Almost every other function in the organization easily identifies the value we aim to deliver. When it comes to who’s really leading, the RFP there shouldn’t be a ‘hot potato scenario’ — we guide, as Procurement experts, and collaborate in a mutual partnership. Marketing, by comparison is still evolving their views on how to collaborate with Procurement. In a late 2014 study conducted by the ANA (Association of National Advertisers), nearly half of all Marketing and Procurement respondents stated that the relationship between them needed to be more collaborative. Nearly 50% of Marketing and Procurement professionals admit that they aren’t collaborating the way they need to in order to deliver maximum value to their brands.

Now, on the flip side, my experience with Marketing colleagues is that they are passionate, energetic and constantly focused on being creative. For Procurement (or Marketing) people reading — I’m guessing you’ve had more than a few debates and I’m sure that debate often centers on how Marketing feels like they’re wearing an RFP straightjacket designed, fitting and sewn by Procurement!

With agencies currently rebelling against RFP’s and even some very high profile CMOs like Linda Boff from GE calling for the ‘death of RFPs’1 — organizations can quickly get themselves in a downward spiral, ‘hot potato scenario’. It’s a relatively simple problem at its root: when Marketers don’t fully collaborate and provide the necessary support at the beginning of the RFP process, someone has to jump in and grab the ball (find the agencies, write the brief and RFP questions, and run the process) — that often ends up being Procurement — which doesn’t always lead to the best results for anyone involved: Marketing, Procurement, Agencies … everyone.

Hot Potato Was Fun as Kids — Not Today

To be clear, no one is at fault here. Marketing hates RFPs because they feel they are old and outdated; in stepping in to assist Marketing with their agency selection, Procurement ends up writing more of the RFP than they should, often using out of date questions; then it gets sent to more Agencies (just in case) because Marketing doesn’t have a short list or have time to find a strong and competitive agency panel; and finally, Agencies are overloaded responding to bloated RFPs and remember above – they’re also hoping that RFPs die. In the end, we’ve all played our part in proving exactly why RFPs are so terrible and ‘out of date’ – and the easy answer is just to kill them — and the tremendous value they can provide to everyone involved.

Now is not the time to kill the RFP (nor is that what we are suggesting) — it’s time to enhance our focus on improving communication, collaboration and building great internal and external partnerships. The marketing industry is changing so rapidly, with new channels and divisions, new technology, broader yet flatter reach requiring even more agility and calls for more focus on driving value out of every dollar spent. It’s an exciting time but also daunting and we need to ask ourselves, if the CMO is struggling to keep pace with this change, how are we going to support and bring value?

Time for more focus on what’s working and less ‘tossing blame around’ — Time to give Marketing the tools they want

Ok, I know that there is no perfect world where Marketing loves Procurement, Agencies love Procurement and Procurement loves procurement workloads… But there are things we’re doing really successfully that we can build upon. In Part II, I’ll suggest three areas the tools we’re implementing need to change to give Marketing what they need.

Thanks, Mat.

1 Marketers: It’s Time to Say RIP to the Media RFP