Dear Marketer On a Budget …

It’s never quantity, it’s quality.

And audience matters!

  • The majority of people who follow a celebrity aren’t following because they want pitches.
  • The majority of people who follow a major influencer aren’t following because they jive with that influencer.
  • And those that follow a minor influencer are following for a reason and are generally of a certain consumer class (based on the common reason). Don’t ask a fashion influencer for low cost apparel to sell a high end luxury watch, and in our space, don’t ask an influencer whose only use for tech is to make brainless content for followers to consume to sell an enterprise product.

These are hard truths that have been the case since even before influencers, so the following linked post from Phoebe Sophia Russell from “In the Style” (on how 150,000 on a celebrity Instagram post only produced $800 in sales) didn’t surprise me. It’s like the new startup that forks over 100K for a big bash at ISM only to come back surprised when they didn’t even manage to get a single follow up demo scheduled.

Think back to the days when Oracle, SAP and IBM (and almost no one else) used to advertise everywhere, but see almost nothing for their stadium sponsorships, airline magazine ads, etc. All it bought them was name recognition — which was important IF you could get in front of a client who’d seen your business name (repeatedly) and not your competitors (and then instinctively thought of your company as successful), but they still had to get those RFPs and meetings, which means investing in traditional sales channels that would enable that. But that’s not a strategy the vast majority of companies can afford!

SI, which has been giving away free marketing advice (including great advice from Pinky and the Brain#) since it began (because ??? ?????? has no intention of being a marketer … but still knows what works*), including this piece on Marketing 101 which appeared with the FAQ in 2007, always advocated for intelligent spending for smaller companies which focussed on publications (on & offline), events, and thought leaders who had the necessary audience, even if it was small. 100 buyers who actually want the type of products covered by the publications, events, and thought leaders is better than 100,000 individuals who have zero interest.

And the good news is that, even though many marketers during the heyday of free money would say I was off my rocker, the best marketers today pretty much agree with me, include the Marketing Maven Sarah Scudder who has teamed up with Dr. Elouise Epstein (in their DualSource Discourse podcast) to help educate you.

(Which is great since there aren’t many of us left trying to … going back to when I started, it’s just Jason Busch, Jon W. Hansen, Peter Smith, and Pete Loughlin who haven’t given up. Fortunately, we were joined by Kelly Barner and Philip Ideson of Art of Procurement and now we have David Loseby, Tom Mills, Joël Collin-Demers, and James Meads as well … )

Focus, Audience, and Education matter!

* Every single sponsor of SI before ??? ?????? joined Spend Matters in ’16 (to ’22) [and suspended sponsorships] was acquired by ’19.

# The Brain Gives Pinky a Marketing Lesson
# Where Pinky and the brain devise a plan to market their strategy

PLEASE TELL ME: Why buys research cobbled together by “researchers” who don’t have a clue as to what they’re researching?

This press release just went live yesterday:

“Sourcing and Procurement Operation Software Industry Future Trends Analysis”

which announced a new “Sourcing and Procurement Operation Software market” research report from Orbis that opened with obvious (that we are a pivotal sector), stated a few more obvious facts around software delivery methods (could-based, traditional ASP based), broad market sectors (business, manufacturing, education, government, etc.), and top players that include:

  • GEP SMART – Source to Pay
  • Jaggaer – Source to Pay
  • Corcentric – Source to PayMENTS
  • Coupa – business spend management, sorry, margin multiplier maker based on Source to Pay

which are in every map, quadrant, wave, logo map, etc. … so no surprise there but …

  • Precoro – Procure to Pay

which only solves half the problem

  • Servicenow – workflow management
  • Kissflow – low code app development

which can build solutions, but doesn’t offer them out of the bark

  • Vendr – SaaS marketplace

where you can buy some of them

  • ClickUp – Project Management

which is not even remotely related to S2P at all!!! And if these are the top 9 vendors, I shudder at what other totally irrelevant, non-comparable, vendors were included!

A report such as this should ONLY include vendors that offer real, and core, Source-to-Pay functionality, and only if they break down the space into segments where included vendors are actually comparable!

And it shouldn’t be hard as there are over 600 such vendors in some core area of S2P … you don’t have to include generic workflow engines, project management, buy-an-app platforms, or generic project management just to hit 25!

Reports like these give analyst firms, and analysts, a bad name!

Why Won’t They Stop?!?

Procurement Organizations Need Automation, But that DOES NOT Necessarily Mean AI!

A number of leaders in our space, including Sarah Scudder in the comments to this post, have been noting to me that they are seeing AI resonate with companies of all sizes.

Sarah notes that:

1. She’s seeing AI agent automations resonate with smaller companies.

Smaller companies need automation desperately, but it’s important we educate smaller companies that doesn’t mean they need AI. We’ve had adaptive rules-based automation and tailored machine learning in this space for almost 20 years and they can get fantastic results without having to risk being pre-alpha testers for unproven AI while getting the solution they really need for a fraction of the cost of this new, relatively unproven, AI tech! (Remember, firms that dumped millions into this bandwagon need to recoup those millions fast before their investors abandon them, which means high prices for unproven tech!)

2. She’s seeing copilot intelligence resonate with bigger companies who understand risk.

Which makes sense for a small segment of the market who are ready for it because augmented intelligence and automated suggestions with yes/no approvals are great for organizations who

  1. understand risk and
  2. understand the categories/markets/domains they are applying the technology in, because a true expert will identify the 95% of the time it’s working just fine; the 3% of the time it’s probably okay (and not worth the effort to double check manually due to the risk threshold); and the 2% of the time they need to slam the breaks and take over.

However, that’s not a very large segment of the market. What most companies still need is better analytics, category intelligence, and guidance from category experts on how to use it and then where and when to integrate automation and co-pilot capabilities.

Furthermore, I’m also being told that:

3. Mid-Markets are looking for technology they can roll out to the organization at large to get tail-spend under control, manage intake, and/or relieve pressure on Procurement to focus on more strategic efforts.

Which resonates, but, again, this is an area where AI is typically not needed. Catalogs, be they hosted, punch-out, hybrid, etc. with the ability to also request/book standard, pre-negotiated, services, easy search, and easy RFQ where there is no standard item but the buyer has budget authority, the vendors are preferred, and the amount doesn’t hit a threshold is often enough. Maybe a natural language search to find the right policy documents or bring up the right products or forms, but that doesn’t require modern AI either — we’ve had that for quite some time as well.

And, as Sarah implies, while organizations of all sizes need help to overcome their excessive workload and limited market insight so that they can prioritize risk management and mitigation in their procurement activities, this doesn’t mean they need AI. Automation yes, advanced technology a definite yes, but AI, rarely! Remember that when building and recommending ACTUAL solutions and not just buzzwords.

Dear Fellow Independent Consultants: How Can We Dispel the PROCUREMENT STINK!

Hopefully you know by now what the doctor is talking about, but if not, as per the Sourcing Innovation article from two months ago, PROCUREMENT STINKS and we should not deny it anymore.

In a nutshell, and just is just the tip of the garbage heap:

  1. Case studies are ranker than expired fish in a microwave on high.
  2. Approximately 85% of companies are AI-washing everything.
  3. The Gen-AI claims that it will deliver Procurement to the enterprise are FALSE.
  4. Intake/Orchestration is totally useless on its own.
  5. Consultancies are often more in the dark than the Procurement departments they are claiming they can help.
  6. DEI is being misused to push agendas and sometimes to Do Extra-legal Initiatives,

And, as per a poll put out by THE REVELATOR, we are especially concerned with the fact that 14% of practitioners would rather trust a salesperson or a marketer than a consultant or an analyst! (Now, part of this is probably due to the lack of independence from many consultancies who continually pushed their vendor “partners” on the client whether or not the “partner” was the best solution, but still, it’s not ideal. [And, hopefully, as a result of the bloodbath, the consultants who weren’t offering value to their clients were the first to go.])

As far as the doctor is concerned, the most trusted advisors in the space should be:

  1. analysts
  2. independent consultants

and that’s it! No sales people, no marketers, no influencers, no made up positions. Sales people are paid to sell, not to solve problems, and marketers are paid for leads and, in some organizations, there is no correlation between “leads” and the sales funnel.

So how can those of us not at a bigger consultancy, where we would be joined at the hip to preferred partners or subsidiaries (and not recommending them results in a pink slip), dispel some of the stink and regain some trust?

The first thing the doctor wants to state is that he has even less ideas here than he does for his fellow analysts. In fact, the ideas he does have should be pretty obvious.

1. Disclose any (formal) relationships we have with vendors that are recommended.

Even if a partner is the best recommendation for the client, we must still disclose the relationship, especially if there is any additional benefit we get from the recommendation (and definitely if the benefit is financial). (In addition, we should make extra effort to demonstrate that we did thoroughly evaluate the identified alternatives and have a number of reasons for the partner recommendation that are specific to the client’s needs).

2. Create RFPs based on identified needs, not free vendor templates or analyst map outlines.

It’s critically important that we don’t take shortcuts here because vendor templates are designed to ensure that the vendor who gave the template away always comes out on top (by focussing in on the requirements that the vendor executes best) and analyst map requirements focus on a set of requirements that the analysts can use to compare vendors on the same scale, not on a set of requirements that is relevant for selecting a platform for a specific customer, or even a customer of a specific size in a specific vertical.

3. Recommend vendors based on technical fit and hard requirements, not cultural fit and soft requirements.

Just like it’s not an analyst’s job to judge cultural fit or other soft factors in their analysis (as that varies too much by company to even take a shot in the dark), it’s not our job to tell clients who is a good fit — that’s for them to decide. We’re there to tell them which companies can provide a good solution, and let them decide who they are comfortable with as they will be stuck with the vendor for 3, 5, 7 or more years (not us)!

4. Make recommendations on expected ROI for the customer, not follow-on work potential.

At bigger consultancies, where the consultant is often joined at the hip to partners (and must use/recommend their solution if it can be force-fit), they are often also pressured to making the recommendation that will lead to the most follow-on work and engagement extensions (and, preferably, long drawn-out implementations and integrations). As far as the doctor is concerned, this is one of the most egregious things you can do. Especially considering that, in Procurement, work is never done and the client will always need more advice, new technology, and more help.

If we focus on the technology that will deliver the most ROI, then we are enabling the client to generate funding for additional projects and, hopefully, make us their consultant of choice in the process by focussing on them before us. The reality is that there isn’t a Procurement organization anywhere, not even in the upper quartile of Hackett Group top performers, that has all of the resources, technology and knowledge it needs. So we should never think it’s a one-and-done situation if we do well (and, moreover, do it at a fair price-point where we deliver an ROI).

5. Don’t take on projects we’re not qualified to do.

While this might get you fired at a bigger consultancy where the motto is the traditional consulting motto of “sign now, figure it out later” (because they have enough expertise and people across enough areas to do it), we need to be better (because we don’t have expertise anywhere or a lot of people to fall back on). If we’re approached with something that’s not in our wheelhouse as a consultant, we take it to the rest of the company. If it doesn’t fit anyone’s wheelhouse, we need to politely decline the work. If it means we never get asked again, then we know that’s a client we wouldn’t want to work for as any client with working brain cells would be impressed and honoured to know a consultant who didn’t just say yes but instead thought about whether or not they could deliver enough value relative to their price tag before accepting the work.

Furthermore, if we take the time to educate the client on what our services are and where we could help, we should be the first call they make when they have the right project, and maybe even get it in a sole-source negotiation if the project doesn’t cross a mandatory public bid threshold. People worth working for value honesty, and are very likely to come back to you, either at their current company or their next company, if you are honest about what you can and can’t do and what value you can provide. (Furthermore, if you investigate the company and can identify something you could do to help them, nothing stops you from proposing that project and working with them to close that project while helping them find the right consultant for the project you can’t do.)

At the end of the day, no one ever ruined their reputation by saying no to work they weren’t suited for — they ruined their reputation by taking on work they weren’t qualified to even talk about and then f6ck1ng it up royally.

the doctor‘s not sure it’s enough, but it’s a start, and if other independent consultants make an effort to figure out how to restore our reputation, maybe we’ll find the answer, provide the value that we are engaged to provide, and get back the trust we should have.