The word “procurement” may strike fear into the hearts of agencies, but Rod Geoghegan shows how, with understanding and an inclusive approach, you can make procurement work for you
Article by Rod Geoghegan
But agencies brave enough to embrace the commercial reality of procurement departments – which are here to stay – will actually find they are staffed by reasonable people (yes people!) who can be a real help to you.
The key to working productively with procurement is in building a relationship founded on mutual understanding, openness and trust. And there are many ways to do this. Firstly, there’s nothing to be afraid of. The sooner you embrace, love and help them to do their job better, the more you will benefit from them. Procurement should be the agency’s best friend, and they can really help, for example, clarifying commercial situations with clients that may become tricky. Get procurement involved as early in the process as possible – don’t put off meeting them because you think they are only going to give you a hard time.
Just make sure you have all the information they need in a format they can use and understand. In fact, our approach is more proactive than that – we mail our details to the procurement departments of clients we have yet to work with and it has put us on their radar and helps us immediately create a sense of openness and trustworthiness.
Transparency is all. Be open about how you work and how you charge. Don’t be frightened to show your costs and profit. If you don’t, procurement managers will think you have something to hide. Be upfront and think ahead: are third-party costs available to look at, for example?
Have you highlighted where the budget-breaking risks could arise? This kind of detail shows you are commercially aware, which again helps in the trust-building stakes – it’s one of the key factors a procurement department wants to see from its suppliers. Make sure you give a clear picture of the value you offer – not just a breakdown of your costs, but details on how you manage the working relationship; how you keep costs within budget and the checks and balances that are in place that can warn of budget over-runs. Let them know how you benchmark your service and what your service level agreements are. Think about your internal processes and how they can be improved to aid better working – can you improve your negotiating skills for example? Are you looking for points that unite rather than divide?
Whatever you think, procurement people are not the cynics Oscar Wilde referred to as “knowing the price of everything and the value of nothing”. What they are looking for on behalf of your clients is “good value”, and it’s up to you to prove that.
So agencies must show increased concern for quality and effectiveness, as well as productivity and efficiency. The creative must be great, but so must be the costing, pricing and negotiation. Knowing the value of the creative contribution made to the client’s business and having confidence in your processes and costs will help build mutual respect and deliver mutual benefit. Talk their language. Make sure you take a finance person or trained negotiator to every meeting with procurement – finance people speaking to finance people is a much better start point than bringing in your finance director way down the line when things have already got sticky.
Consider: do you talk in measurables and are you focusing on output and deliverables as much as costs? Include procurement in your communications with your client. Keep them abreast of any changes in activity that may impact finances.
Tell them early on, so you can work together to ensure a good result. Keep the client in the loop too when talking to procurement. Some businesses outsource their procurement and these companies can be very good at excluding the client so they do not get to see how tough they are being in the negotiation and only report back that the agency supplier is “being difficult”. It’s your job to keep your client abreast of what’s going on.
Also, remember procurement are integral members of your client’s team, so approach them the same way you would your marketing client. Believe it or not, procurement are people too – so send them Christmas cards, as you would with the marketing department, thank them for their help and really work hard at building that relationship. Help them understand who you are, how you work, how you charge and help them see you as people, not as numbers on a spread-sheet. It all comes down to mutual understanding and collaboration.
By keeping open the lines of communication and listening to each other, agencies and procurement should learn to work side by side rather than head to head, as is often the case today.
First published 30 June 2008 and still relevant today.
Rod Geoghegan works with Marketing Services Agencies, Tech Start-ups and Professional Services Firms to plan and deliver growth.
He is Founding Partner at Metropolis Partners