I got thrown out of a Marketing Director's office. It wasn't an easy thing to admit to my manager at the time, but it was one heck of a teaching point nonetheless. I'd just started in the marketing procurement organization of a major CPG company after several years of sourcing capital equipment and was attempting to build relationships with my new stakeholders using language and approaches I'd had success with in the past. As many in our profession know, it's challenging for Procurement to engage some functions for the first time. And as I found out in this example, if you don't do it right the first time with marketers, you don't often get another chance.
I had naively led with the savings business case when I met with him, exclaiming how excited I was that I was going to save him upwards of 10% on much of his spending. He, on the other hand, did not share my excitement. He began to pepper me with questions about what I would do with the savings and explained how his people have been doing just fine without Procurement's involvement for a while now, thank you very much. Coming from a world where savings were expected (and appreciated!), this was a bit of a shock to me. He declined my services and it took almost a year before I could prove to him that I understood his business well enough that he'd agree to my engagement with his teams.
Procurement involvement in the marketing space is still a relatively new concept, and accordingly, many Marketers haven't had exposure to what we in Procurement typically get rewarded for: realized savings that hit the bottom line. As I learned the hard way, leading with the concept of saving money is not only often ineffective in getting their cooperation, it can be counter-productive to their own marketing objectives as well. So why the conflict? And what can be done to ensure a smooth initial meeting that doesn't get you kicked out of the room? Here are a couple of thoughts.
First of all, don't mention the "S" word. Typically, savings are expected to go to the bottom line, so when a marketer hears that word, the first conclusion that's made is that he'll lose part of his budget. It's great that Procurement can save the marketer $250,000 on agency fees. But if he were allowed to reinvest that $250,000 into additional media instead, he could realize another $5M in sales, which is what he's rewarded for. So when Finance takes away that $250,000, Procurement often gets "blamed" for the budget reduction and marketers become reluctant to work with us again.
Furthermore, there is a perception that Procurement will pursue savings at the cost of destroying agency relationships. It's true that using sledgehammer negotiation tactics or failing to understand the difference between creatives and widgets can damage relationships with agency partners that usually have many years' experience with the brand and who manage much of the equity. But in the end, swapping out "optimizing budgets" for "saving" and assuring them that there are non-confrontational means to working with agencies will go a long way toward not putting marketers immediately on the defensive.
Procurement professionals do more than just save a buck, so a great approach when engaging Marketing for the first time is to emphasize how we can bring structure and rigor to the organization and agency relationships. Without Procurement involvement, marketers are generally left to their own devices, hiring suppliers and creating retainers as they see necessary. Nobody faults them for doing what they see is right for their company, and I've seen many good examples of agency staffing plans and scopes of work come from experienced marketers. But in other cases, RFPs aren't necessarily managed efficiently, compensation structures are not optimized, and there is little standardization of products across the organization.
Expressing how Procurement can bring rigor and structure to the sourcing and supplier management process gets the marketer's attention, particularly at the senior levels. They want to hear how Procurement can standardize agency staffing plans to ensure consistent year-over-year staff allocations. They want to know that they can rely on someone who understands their business when it's time to renegotiate contracts. They want to see structured processes in place for selecting agency partners. They thirst for methods to gauge agency performance and improve relationships. It's not all about saving a dollar, and emphasizing what Procurement can do outside of that is a good way to demonstrate value without making them concerned about budgets.
Of course, the best point that can be made in that initial meeting with a marketer is the most obvious: enable marketers to get back to doing what they do best- marketing. I'm pretty certain that not many marketers enjoy running RFPs, conducting pre-award due diligence, or negotiating with their agencies. Enabling greater productivity across an organization is a huge selling point for a senior marketer, and its one that can engender trust while a partnership is crafted between the functions.
There are obviously many other factors that impact how effective Procurement will be when first engaging Marketing, not the least of which is simply demonstrating knowledge of the marketing space. But taking a measured and value-focused approach to the introduction will go a long way toward making a good initial impression.
To be certain, my experience was an extreme; not all marketers react negatively and most are very interested in how we can make their organizations better or how we can optimize their spend. But the fact remains that we as Procurement professionals need to understand our stakeholders, how to communicate effectively with them, and how their reward system may or may not align to ours in Procurement. I've long believed that if you get the relationship with the marketer right, the savings will come. And if you get it right early on, you might just get to stay in his office, too.