Al Girardi, GVP, Marketing & CMO of GEP, brand & biz strategist, growth firms in software, IT, professional & business services.
There’s been a misunderstanding. While the value of the procurement function is widely embraced by many in global enterprises, the uptake hasn’t always been as strong among marketing departments. Why?
I attribute this lag to conceptions of procurement — and procurement’s relationship to marketing — that are years, perhaps decades, out of sync with reality.
Granted, marketing folks, myself among them, can and should be rather fastidious, recognizing that:
• Creativity is not a commodity.
• Quality counts — both in medium and message.
• Details make the difference, reinforcing or contradicting messaging.
Given the enormous amounts of time, talent and capital that we invest in many marketing programs, and what is ultimately at stake, no proper marketer wants to see results compromised by inaccurate assumptions and poor execution. “Penny wise, pound foolish,” as the old saying goes.
Yet if we’re honest, do we always apply the same careful thinking and analytical rigor to the cost side of our programs? That answer varies by leader, company and team. So the most accurate response is, really, “Nope, not always.”
I could argue that there is no harm in a careful review of proposed costs. But this is not quite accurate because, in truth, there is an awful lot of good to be realized. I’ve seen this firsthand with many of our clients at GEP, where we offer a full range of procurement and supply chain software and solutions.
In my experience, I’ve found that world-class procurement teams find significant savings with comprehensive reviews of marketing spend, which also result in annual savings in years thereafter. Granted, not everyone has gotten the message, but this is not news and it shouldn’t stun anyone awake at the wheel.
The fact is, we buy quite literally tons of commodities. Paper, packaging and printing services are frequently cited examples. And even if an item or service is not strictly speaking a commodity, there are often competing sources or vendors. These choices create the opportunity for value, whether negotiating with digital advertising networks to support a product launch or contracting hotel and catering services for a global conference.
Experienced marketing procurement professionals, far from being hostile and alien intruders, are more like marketing “expats,” metaphorically speaking. In other words, they were, or sometimes still are, marketing professionals in the true sense — experienced, informed and aware — but who have also developed, over time, skill and experience in the procurement of the goods and services that we marketers rely on to do our jobs.
Of course, not all marketing procurement professionals have served in the marketing department. Others, who may not have been born and bred in the confines of the discipline, have come to understand and respect the needs of their customers in marketing. Strong performers do what all strong performers do: They listen, they inquire, they discuss, they explore and suggest and, ultimately, they seek to create happy customers who endorse their work and are eager to use them time and again.
Simply put, a win-win is a necessary component of both their success and survival.
But for even the most motivated procurement ally to stand a chance of success, they need to be brought into the planning process at or near the outset — that is, before decisions are made.
Why? Among other reasons, because it maximizes their (and thus, your) leverage, including in cases where you have preferred partners or suppliers. With that leverage, they can cut better deals, achieving more value or less cost, and often both.
Share the marketing plan with your procurement team. Discuss your objectives with them and make the connections to your strategy and tactics. Once briefed, they will manage bidding processes, contract negotiations, resource selection and other key activities in an informed and far more effective way.
Okay, good for them, but what’s in it for you?
In my book, mindless overpaying is a form of senseless waste and to do so willingly is downright perverse. Reduce or eliminate that waste, deploy those recovered funds in productive activities and you have, in effect, a force multiplier. Build the brand, generate leads, reward your best people, train and retrain. These are just a few things for which we never seem to have enough money. But on closer examination, perhaps we do.
Maybe we could do better. The point is, it’s certainly worth the effort.