How agencies can win at the procurement game
December 10, 2013 | David Thomas | Comments
Step One: Get over yourself
The most common business complaint heard these days in the advertising industry is that services have become increasingly commoditized and the blame for that is placed squarely on the ongoing creep of procurement practices.
But the next time agencies complain about an onerous RFP process or how the squeeze on hourly rates is killing them, they should realize they’re doing it to themselves, a panel of three US-based experts said Tuesday. The good news is that there are ways to turn the tables.
The best way to avoid the commoditization game is to stop pretending to be the most unique agency in the world, according to both John Gleason, consultant and 20-year Procter & Gamble man, and Edward McFadden, a senior group manager with Target. “Everyone is trying to do the same thing,” said McFadden, who added a pitch is already in trouble if an agency uses the same first 10 slides in their decks as its competitors.
So, agencies, don’t pitch the fact your agency has the most talented people in the industry, because everyone knows those same employees have probably worked at half the other competing shops, said Gleason. Don’t tout your lengthy client list because it doesn’t really explain what you did for each client. And don’t pretend you have the secret sauce in some kind of magical creative process.
How do you turn the tables? Try listening to what the client needs, what keeps him or her up at night. Know your agency and pitch on business where you can prove you can provide value and results – meaning revenue – not just now but in the future. And learn the value of saying no when clients come back at you after a presentation to cut costs or change terms.
Of course, standing up to clients isn’t always easy. Brett Colbert, chief procurement officer at MDC Partners, plays a somewhat rare role in an agency in that he specializes in helping both his agencies and their clients quantify the value of the services offered and the results that will be delivered. A former procurement executive for Nestlé, Time Warner and Anheuser-Busch InBev, Colbert says the game is won when agencies can sell their services as “an investment to maximize, not a cost to minimize.”
It also helps agencies when the client is enlightened. McFadden told the Toronto audience gathered for the panel assembled by the Institute for Communication Agencies, that he spends a lot of time on “policing our own behaviour” at Target to ensure the firm uses the RFP process effectively, with clearly defined strategic goals in mind.
He advised clients to use procurement staff internally to help focus and gain insights and cautioned against just handing the process over to them. The risk? You end up having the same relationship with agencies you’d have “with someone who ploughs your parking lot.”