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A structured approach to agency and supplier roster management

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trinityp3.com

Often the agency roster is defined by marketers and advertisers as the advertising agencies they work with on a daily basis. But from a financial and procurement perspective all suppliers paid from the marketing cost centre are part of the marketing supplier roster. Following on from the work done by TrinityP3 in 2011 this presentation takes the concept of a tiered roster approach further into the management and maintenance of the roster to ensure maximum performance and minimum waste.

Previous presentation on this topic can be found here https://www.slideshare.net/darrenwoolley/trinityp3-strategic-supplier-alignment-process

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A structured approach to agency and supplier roster management

  1. 1. marketing management consultants A structured approach to agency and supplier roster management Prepared by TrinityP3 © July 2018 Brand
  2. 2. marketing management consultants What is a marketing supplier roster? All suppliers (or agencies) paid from the marketing budget to provide products / services required for the implementation of the marketing strategy. This is more than just the agencies where you may invest the majority of your time and budget. Increasingly it may also include in- house services such as production, media, social media etc. Brand
  3. 3. marketing management consultants How do you structure your roster? Often rosters are segmented into two groups: Those you work with regularly and the rest. This is why many believe their roster is only perhaps no more than ten agencies. When in fact the financial ledger will reveal hundreds or even thousands of suppliers and vendors being paid from the marketing budget. Brand
  4. 4. marketing management consultants So how should you segment your roster? There are several ways to segment your supplier roster including: •  Buckets of services or capabilities (Based on the services provided) •  Spend profiles (Based on annual spend intervals) •  Strategic importance (Based on role and strategic value) $? Capabilities? Strategic Importance?
  5. 5. marketing management consultants Why should you structure your roster? Having an unstructured roster leads to: •  It growing organically based on immediate need rather than strategic need. •  Duplication and waste with multiple suppliers providing the same services. •  Fragmented marketing spend decreasing purchasing power. •  Increased time required to manage each agency and supplier. VS
  6. 6. marketing management consultants What is the recommended roster framework? While all and any model can provide advantages our experience shows the strategic alignment works best by: •  Categorising suppliers by their strategic role and importance. •  Applying a category management framework to each category including selection, remuneration etc. •  Eliminating duplication and maximise supplier utilisation. Brand
  7. 7. marketing management consultants The strategic alignment framework Not all suppliers are created strategically equal. Think of it in three levels or tiers: •  Strategic Partners – suppliers that influence the development of marketing or communication strategy. •  Specialist Service Providers – specialists essential for strategy in their particular field. •  General Service Providers – suppliers of often commodity services. Tier 1: Strategic Partners Tier 2: Specialist Service Providers Tier 3: General Service Providers
  8. 8. marketing management consultants Rank (up to) top 10 current suppliers by spend Populating the framework There are a number of considerations when populating the strategic framework from an existing roster. Depending on the size of the existing roster and the strategic needs of marketing these may be weighted. The purpose of this approach is to ensure no supplier is overlooked while reducing the roster to the most efficient. Is the suppliers services strategic, specialist or generalist Is the supplier engaged elsewhere in the roster or the organisation? Should any supplier be given special consideration? What is the suppliers potential future contribution or importance? Rank current suppliers by delivery/ performance record Is there capacity or capability to expand current role? Are there too many suppliers in any one tier?
  9. 9. marketing management consultants Selecting new agencies When adding to the roster framework it is important to: •  Look to see if the gap can be filled by another existing supplier rather than adding additional suppliers. •  Only replace a Tier 1 or 2 supplier when requirements change or performance management fails. •  Ensure the selection process is specifically designed to deliver the ‘best fit’ to the roster. e.g. Tier 1 is strategically capable and best fit with the other suppliers in that tier. ? ?
  10. 10. marketing management consultants Supplier remuneration Remuneration should ideally encourage and reward performance depending on the tier. •  Tier 1 should be based on sharing in the result of their collective strategic contributions. •  Tier 2 should be based on exceeding expectations in delivering innovation in their specialist field. •  Tier 3 should be based on driving continuous cost and time efficiencies in delivery of their services. Outcome$ Output$ Cost$
  11. 11. marketing management consultants Supplier contracts While terms and conditions may be consistent there is a need to customises supplier contracts across the roster. •  Define not just the services provided but the supplier’s role and responsibility within the roster. •  Differences in remuneration models must be clearly articulated for each supplier tier. •  Performance KPIs will vary and need to be specified for each tier. •  Need annual contract reviews to maintain relevance. Tier 3 Contract Tier 2 Contract Tier 1 Contract
  12. 12. marketing management consultants Performance Management Supplier and roster performance is evaluated at multiple levels •  Tier 1 – Marketing & Business Performance •  Tier 2 – Capability Delivery Performance •  Tier 3 – Operational Efficiency Performance •  All Tiers - Relevance, Capability, Collaboration, Contribution
  13. 13. marketing management consultants Reviewing the Roster Regularly (depending on dynamics) review roster for: •  Changes in strategy •  Changes in requirements •  Changes in budget •  Supplier performance •  Category performance •  Changes in scope of work •  Consolidation opportunities ? X X X Brand
  14. 14. marketing management consultants Roster Management Checklist 1.  Define strategic marketing requirements of the roster 2.  Decide on a roster framework to suit requirements 3.  Categories suppliers to the chosen framework 4.  Replace or select new suppliers specific to the category 5.  Align remuneration to supplier category to reinforce performance 6.  Ensure contract supports supplier category 7.  Manage supplier performance to the specific category 8.  Review roster composition and performance regularly
  15. 15. marketing management consultants For more information please contact us TrinityP3 New York + 1 (646) 666-7142 Sydney +61 (2) 9964 9900 Singapore +65 6631 2861 London +44 (203) 790 9229 people@trinityp3.com www.trinityp3.com TrinityP3.com/blog/ @TrinityP3 TrinityP3 TrinityP3.StrategicMarketingConsultants

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