Reducing Marketers' scepticism of Procurement's value-add
Posted by John Butcher on Thu, May 03, 2012 @ 09:15 AM
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A few articles have begun to crop up around Procurement's relationship with various business stakeholders (their customers) - with Finance being a primary focal point. However, another pot has begun to bubble from discussions heating up around the value Procurement teams' can deliver their Marketing department.
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Procurement’s attitude towards Marketing has changed enormously over recent years. While pre-2008 Marketing’s focus was on quality and output, more recently Senior Marketers have been tasked to prioritise value for money (i.e. reducing costs, but delivering the same or better results) above all else.
This is quite understandable given the conditions in which big businesses are currently operating. Any savings made would typically be reinvested back into the Marketing budget to enable additional or extended campaigns, or redirected to the bottom line if the budget holder preferred (which is very unlikely as Marketing is not measured on savings or cost reduction but top-line growth and brand impact). Whether to cut or reinvest is a decision from which procurement rightly steers clear, as marketing budget holders and finance better placed to determine the best use of those funds.
However, given recent coverage that references “maverick” and “immature” marketing procurement practices, it is perhaps useful to look at where procurement can play a meaningful role in identifying, measuring and delivering ‘value’ back to their marketing stakeholders. Clearly cost management must be balanced with maintaining performance, but this is where the marketing and procurement communities can usefully work together.
Where procurement teams can add value is in introducing new tools and techniques to enhance the control that marketing teams have over their budgets, such as econometrics, and media campaign performance target-setting and capping. This approach also demonstrates procurement’s ability to help the process of improving campaign effectiveness through championing methodologies that increase campaign effectiveness.
Delivering long-term, sustained improvements does, of course, require buy-in from all sides, so it is right that the articles also recognize the need for clients and advisers to work together to improve ways of working across their partnerships. A good example is in the approvals process for marketing collateral, where clients often demand multiple re-workings or changing of direction. Each change generates additional cost, so streamlining internal review and approvals processes on the client side and giving timely, constructive feedback to agencies delivers faster production and reduced costs, with better value achieved on all sides.
Fundamental to the success of any engagement, though, is a thorough and detailed understanding of the stakeholders’ core objectives. Procurement can apply all the latest tools, metrics, scorecards and benchmarks but if they do not truly understand what their stakeholder is trying to achieve with increasingly limited marketing resources they will fail to deliver real value and thus continue to be regarded as a hindrance or non-critical to the overall process.
- What are your experiences of working alongside Marketing teams?
- Where have the greatest successes/wins come from through this partnership?