http://www.trinityp3.com/ I recently gave this presentation to the Annual Leadership Forum of AMSRO held in Coolum, Queensland. The feedback from the audience of almost 50 research company business owners led me to think there is perhaps many professionals in the marketing category that are suffering from the application of what could be considered traditional procurement practices. This presentation is based on my 12 years consulting experience and 15 years advertising agency experience. It highlights strategies for dealing with procurement to move beyond the focus of price to encourage the evaluation of value. Of course there is no guaranteed, foolproof strategy here, but there are many interesting approaches and practical ideas for possibly increasing your success rate or minimising the waste of time of filling out endless RFPs, RFQs, RFTs and RFIs.

1. How to Minimise the
Commoditising Effects
of Marketing Procurement
TrinityP3
March 2012
CONFIDENTIAL
marketing management consultants

2. Show me the money
• Procurement is almost invariably not the
end user of the process. They are acting
as a service provider to internal
stakeholders.
• Procurement almost never have their own
budget but must convince the budget
holder that they bring value to the process.
• Procurement are therefore focused on
justifying the value they provide in the
form of cost reduction and risk mitigation.
marketing management consultants

3. Hands up who wants to complete the RFP?
• The Request for process (RFX) is
designed to create a level playing field to
allow comparison across supplier
proposals.
• Almost invariably in marketing this relies
on breaking down and filtering proposals
into measurable units.
• The outcome is that proposals are
reduced to the lowest common
denominator being cost and sometimes
a measure of quantity.
marketing management consultants

4. Avoiding the traps
• The RFP, RFT, RFI, RFX is a request
to participate in a business process.
• You need to assess the circumstances
and business opportunities before
committing to participate.
• Like a “date” you should not appear
“too easy” or be “too difficult”.
• But you can and should request some
basic information so you can better
assess if this is a request you want to
accept.
marketing management consultants

5. Work out the odds of winning before you play
• The first step is to assess the RISK, the REWARDS and the potential RETURN
• This is a numbers game so ask questions such as: How many companies are participating?
How long will the process take? And what is the value of the contract on offer and over what
period?
marketing management consultants

6. If it is too hard then it is not worth doing
• Next you need to know what will be
involved if you participate in the process.
• Then you need to consider:
• How many steps are planned for the
process?
• How much time will you need to
commit to participate in the process?
• How much will it potentially cost to
participate?
marketing management consultants

7. Know who is requesting you to take part
• As procurement is rarely the end user,
there is usually a stakeholder group
within the organisation what will be
making the decision.
• It is important to know who they are
and how engaged and involved they
are in the process.
• Do some research into the
organisation, their culture, structure,
personnel and requirements.
marketing management consultants

8. Pitching is like a box of chocolates
• Forrest Gump was right. You never know
what you are in for unless you have done
the homework.
• Use LinkedIn, talk to other suppliers, use
your networks, online search and
research to identify alignment and
connections.
• Look for what you need to enhance and
what to minimise – should you be nutty, a
hard centre, a soft centre or a chewy
caramel?
marketing management consultants

9. Make sure they are comparing like with like
• Ask about the evaluation criteria. What attributes, features, or services do they value?
Are any more important than the others? And how will these be evaluated?
• Realistically assess if the criteria fits the profile of your business, your offering and your
expertise. Think about the competitive set to see if the criteria could be skewed to
another companies advantage.
marketing management consultants

10. Set the criteria in your favour
• Just because the evaluation criteria does
not suit your company or offering does
not mean you should withdraw.
• If there are any glaring omissions in the
criteria helpfully inquire if they were
considered, especially if they are
strengths of your offering.
• Provide an industry or category “best
practice” list of evaluation criteria,
especially with those attributes that play
to your strengths.
marketing management consultants

11. Seen one you have seen them all
• Much of marketing is a people based
business, but in procurement people
are resources which are measured
at FTEs (Full Time Equivalents).
• People are a cost to business in the
procurement world and in
determining the cost they can
determine the minimum they need
to pay.
• You need to present people as value
creators and not a cost of business.
Define key staff for the value they
create.
marketing management consultants

12. If price is everything you don’t have anything
• Many times price is left to the last stage,
which is good for procurement but not
for the supplier.
• Don’t negotiate on price alone but
include variables such as quality, mix
and level of resourcing, payments terms
and contract conditions, increased
scope of work, etc.
• If it comes down to price, put it in a
context other than cost, such as overall
investment, planned ROI etc.
marketing management consultants

13. Value is what someone is willing to pay
• Ultimately the buyer sets the price so you
need to be realistic about the price of
your offering.
• Know which components of your offering
are a commodity, as these will be the
target of the price negotiation.
• Identify the components of your offering
which are unique or different and develop
strategies to establish value here.
• Isolate those components that drive
value and develop pricing strategies
based on returns or performance.
marketing management consultants

14. So you are above the benchmark
• Benchmarking is a useful technique in
establishing value in relation to a pre-
determined level.
• But the benchmarks must be relevant.
Rather than question the benchmark
level, ensure the benchmarks being used
are relevant.
• If you are over benchmark it means you
offer “premium value”.
• If you are under benchmark it means you
offer “discounted value”.
marketing management consultants

15. Make it harder to say NO
• RFX documents often have very specific
formats for providing information and cost
proposals which must be completed to be
compliant.
• But you can go beyond this and provide
options that make your proposal more
attractive.
• These options can include various
resourcing options, pricing options
such as volume discounts, performance
options etc.
marketing management consultants

16. The devil is in the detail
• As early as possible you should get an
opportunity to review the proposed
contract to ensure it is acceptable.
• Specifically check IP and copyright
provisions, liability, insurance, payments
terms, terminations etc.
• Be willing to give and take, and focus on
the 6 – 8 deal breaking clauses in the
contract.
• Flag and suggest acceptable alternative
positions to the ones proposed.
marketing management consultants

17. Don’t make promises you cant keep
• In competitive situations it can be easy
to go beyond your acceptable position.
• Make sure you never make promises or
agree to term that you cannot keep. You
can re-negotiate but it can damage the
new relationship.
• Do not accept terms or conditions that
you will regret later because they are
damaging to your business.
• In the negotiation it is important to have
a “walk away” position on those issues
most important to you.
marketing management consultants

18. You can’t buy relationships
• The most important, but often
unmeasured component of
marketing procurement is the
relationship.
• Insist on a meeting with the end user
of your service as early as possible
in the process.
• If the relationship chemistry is good
you have a good chance of winning
the business.
• If not, no amount of discounting will
win the business.
marketing management consultants

19. Sometimes you should swim away
Everyone likes to win new business, but
remember it is a business decision to
participate.
Few people like filling out endless RFPs,
RFQs and RFIs so before you say YES
find out if you should say NO.
If procurement do not your take your
requests seriously, why should you take
theirs seriously?
Ultimately swimming away from a bad
situation will always have longer term
benefits for your business.
marketing management consultants

20. Thank you
• There is no guaranteed winning formula, Darren Woolley
but hopefully this has provided some
thoughts on ways of increasing your
chances. www.trinity.com/blog
• By being more selective in what tenders @trinityp3
you participate in can certainly increase
your win / lose ratio.
TrinityP3.StrategicMarketingConsultants
• Ultimately the best way to add business is
not through a tender process, but if the
dazzaP3
tender process is well run and fairly
managed it can be the sweetest win of all.
marketing management consultants

21. For further information contact
TrinityP3 Pty Ltd
Sydney
+612 8399 0922
Melbourne
+613 9682 6800
Hong Kong
+852 3478 3982
Singapore
+65 6631 2861
people@trinityp3.com
www.trinityp3.com
marketing management consultants