Last week we wrote about the vital and often misunderstood role that corporate Strategic Sourcing teams play vis-à-vis their firms’ marketing services firm relationships, and how agencies and marketers can work better with their procurement counterparts. Upon reading that blog, an agency friend (thank you, Alex!) wrote the following:
“I’d love to see a post on the flip side of this: “how Procurement (or Strategic Sourcing) can better work with potential agency partners.” Just in the past few months, I’ve been entirely ghosted on proposal submissions, had an RFP canceled on the day it was due (after spending multiple DAYS putting it together), had an RFP canceled and reissued after it was already submitted for vague technicalities, and RFPs that make no mention of budget or what should ACTUALLY be included in our pricing (e.g. media, production, lists, etc.). All I want is to understand their decision-making process, so that I know when they think they’re comparing apples-to-apples, that I’m actually submitting a nice apple, and not a sour pomelo.”
So, how can procurement work better with agencies?
Here are some tips for how Strategic Sourcing can work most effectively with agencies.
Tip #1: Communicate clearly.
Be clear about your firm’s/marketers’ needs and your expectations. Explain the “why” behind the need. Be clear about budgets, timelines, KPIs, and how an agency’s proposal will be evaluated. Identify the size of the competitive pool and the steps in the process.
Tip #2: Communicate often.
Communicate often during a search and during an ongoing relationship. Keep agencies up to date when timelines change. Share company news and key initiatives in real time.
Tip #3: Understand the agency business.
Strategic Sourcing folks can partner better with agencies by understanding the agency business – how agencies (of differing types) are staffed, organized, and work. How they make money. What the agencies’ challenges are. A deep understanding can help the procurement pro to help the agencies and marketers succeed.
Tip #4: Be current in knowledge of critical industry topics.
At any given moment in time there are many complex industry topics. Understanding these issues is critical if a Strategic Sourcing pro is to provide agencies and marketers with sound counsel. For example, just some of the topics that a marketing procurement professional should understand include the pros and cons of principal-based media, the programmatic supply chain, digital platform strengths and concerns, AdTech, MarTech and econometrics.
Tip #5: Hold marketers accountable.
Good clients get good work. Bad clients brief poorly, give poor feedback, create scope creep and don’t allow enough time for the agency to deliver good work. Strategic Sourcing can play a very positive role in making sure that marketing issues don’t become agency issues.
Tip #6: Serve as the agency/marketer “fixer”.
Strategic Sourcing can help relationships stay on course by helping to moderate and fix important issues that arise. Is there marketing triggered scope creep? Is the agency running hot on hours because marketing is frequently changing directions?
Strategic Sourcing can play a vital role in helping to solve issues before they lead to damaged relationships.
Tip #7: Understand the extended capabilities of the firm’s agency roster.
Your marketers may have a new need that an existing roster shop can handle with distinction.
Tip #8: Provide constructive and timely feedback to agencies.
Do this regardless of the topic.
Tip #9: Respect the agency’s need to be profitable.
Negotiation is normal. Competitive benchmarking of SOWs, deliverables, agency rates and agency outputs is fair game. Deconstructing an agency’s rates and demanding lower profit margins or overheads is overreach and unnecessary. You should want your agencies to be so effective and their clients so successful that they are the most profitable agencies.
Tip #10: Develop and execute proactive engagement plans with their agency partners.
In a panel I moderated recently, the Strategic Sourcing pros on the panel noted things like:
– Agency executives rarely ask Sourcing folks how they are evaluated or compensated
– Agency executives rarely engage at all with Sourcing except when absolutely necessary (like onboarding a new client or negotiating a new SOW)
– Most agencies don’t know how their Sourcing partners prefer to engage
Got it. And – can’t the Strategic Sourcing pros also lead the way here? Procurement folks can make a point of routinely engaging with their agency counterparts to check in and see what is going well and what can be improved.
Recapping the 10 tips for how Strategic Sourcing can work better with agencies:
- Communicate clearly.
- Communicate often.
- Understand the agency business.
- Be current in knowledge of critical industry topics.
- Hold marketers accountable.
- Serve as the agency/marketer “fixer”.
- Understand the extended capabilities of the firm’s agency roster.
- Provide constructive and timely feedback to agencies.
- Respect the agency’s need to be profitable.
- Develop and execute proactive engagement plans with their agency partners.
Steve Boehler, founder, and partner at Mercer Island Group has led consulting teams on behalf of clients as diverse as Ulta Beauty, Microsoft, UScellular, Nintendo, Kaiser Permanente, Holland America Line, Stop & Shop, Qualcomm, Brooks Running, and numerous others. He founded MIG after serving as a division president in a Fortune 100 when he was only 32. Earlier in his career, Steve Boehler cut his teeth with a decade in Brand Management at Procter & Gamble, leading brands like Tide, Pringles, and Jif.
Mercer Island Group helps marketers and agencies succeed. Company leadership is as much at home with marketers and their C-Suites as in an agency’s boardroom. With marketers, Mercer Island Group is a top 5 agency search consultancy covering all types of agency relationships (creative, media, web, PR, experiential) and assists marketers with marketing organization structure, workflow and critical skill development (briefing, creative evaluation & feedback, etc.). The company also supports leading and aspiring agencies with positioning, pitch and strategy training and pitch support.
