The relationship between marketing and procurement isn’t always the smoothest. This is largely because of the constant debate between cost versus quality. Opening up about the intricate partnership between procurement and marketing, Charmaine Tan (pictured), procurement category manager, Asia Content, FrieslandCampina AMEA.
Tan explained that procurement teams are often fixated on cost simply because they are measured on it. “Just like how sales people are measured by the volume of customers they bring in, procurement is often measured on the savings they achieve,” Tan said. When asked for tips on ensuring a preferred agency has a higher chance of getting selected, Tan said that ultimately with marketing sourcing or agency selections, marketers are ‘buying’ humans and their talents – rather than the agency.
It’s not always about the name of the agency but rather, the individuals working on the accounts.
For example, a marketer may like the talent they want to work with due to an appreciation of their skills, eye for detail or a keen understanding of what is happening in the social media scene. That being said, if the agency is able to meet the requirements and measurements determined for the appointment well, procurement does not have a reason to say no, Tan added.
“Let’s be real, it’s also about the relationships which go a long way. When marketing budgets are tight, there are certain folks you can ask favours from because you have a relationship with,” Tan explained.These are the talents worth fighting for.
She added that it is equally vital for marketers to become a “client of choice for agencies”. She said, “Ultimately it is a relationship game. If you stay true to your selection criteria, and your ‘favourite’ agency is able to match up to that, I don’t think the procurement team would say no.”
Also consider which agency model suits you best
While selection criteria is key, another important consideration is being aware of which agency relationship model would best suit your marketing team and brand best. After knowing what your brand needs, marketers can decide whether or not they want to go with a single agency or multiple best in class agencies with different specialisations. Some brands may also prefer the holding company approach, Tan added.
“To take it a step further, marketers also need to look at how they organise their marketing teams among the different categories. This can differ based on a country-specific view, a regional view and a global point of view. It also depends on the constraints a brand has which also include resources,” Tan explained.
For example, brands with just a one man marketing team could consider a lead agency model. This allows the marketer to speak to one person which allows the lead agency to coordinate with other multiple best-in-class agencies.
At FrieslandCampina however, Tan said that procurement teams are measured on both savings (50%) and innovation and value add (50%). As such, effectiveness and efficiency of spend plays an important role in the procurement process.
“How you measure your procurement team drives their behaviour. Unfortunately, that is not something we can influence at our current level. It might be a global decision about how procurement is measured,” Tan said.
That being said, making the most out of the marketing budget starts with marketers. This is because marketers have the control and ability to leverage agencies. As such, it is about unlocking the potential in agency partners to maximise the ROI, Tan said.
The FrieslandCampina way
At FrieslandCampina, the company uses an AQSCI model in its agency selection process. This includes Assurance of supply, Quality, Service, Cost and Innovation.
Assurance of Supply refers to the availability of supply of the marketing resources. This includes in cases of crisis and supplies shut down, which considers the availability of alternatives in such cases.
Next is Quality, which refers to the quality of the service and the work, extending to how well or how experienced the agency is. This can be determined based on what the agency tells a marketer during its credential presentation and their experience in serving clients in that specific industry, which is a quick way to measure quality.
The Service factor is determined on how quickly an agency comes back to the client, as well as their turnaround and lead time. This includes finding out if they have a dedicated team for specific tasks or a member of the senior management on the account. While quality may differ, it’s also about how the brand can ensure it gets the “rockstar” of the agency team while still working with the same budget.
The next factor is Cost, which needs to be competitive when bench-marked against other options. This can be determined also through historical spend. Lastly, Innovation is about the agency’s ability to have value added, and help the brand stretch its marketing dollar. This can be through new technologies or offering a beta testing stage to new technology where the brand is the first to gain access to new innovation.
The weight of the different AQSCI factors is also dependent on the brand and what it is looking for. Tan explained that for marketing teams undergoing the initial round of a request for proposal (RFP) stage, cost may not be as high a factor because what the marketer may be looking for is creativity and experience. As such, the priorities would differ depending on the pitch and brand objectives.