Post on 20-Sep-2015
description
Procurement Mapping
Procurement Mapping ToolUnderstanding Procurement Types
& Conditioning Strategies for Each Procurement Type
High 10Potential
Ally
Benevolent
Czar
Marketing Knowledge
Clerks
Dictators
LowHigh 10
Procurement ExpertiseFour Types of Procurement Personnel Relationship Focused PersonnelClerks (Low marketing knowledge Low procurement expertise)
Dictators (Low marketing knowledge High procurement expertise) Transaction Focused ProcurementPotential Allies (High marketing knowledge Low procurement expertise)
Benevolent Czar (High marketing knowledge High procurement expertise)
ClerksClerks=Low level of procurement expertise, Low level of Marketing knowledge
Kinds of Negotiation: Typically involved in fragmented marketing project
Cues
Mindset is transactional not driven by long term relationship
considerations
Can be unrealistically aggressive via Power Moves
May exaggerate their authority and influence
Typically hide true feelings by way of a poker face
They generally avoid personal conversation
Not comfortable answering questions, just asking
They distrust Agency Executives (they sense you lack respect for them)
Goal
Get them to trust you
Get them to help you
Get them to recognize the importance of reconnecting with Marketing
Get them to defer on their information demands until you complete
step #1 & #2 of compensation dialogue process
Best Practice Conditioning Approaches
Dont educate them, get them to educate you. Find out their goals,
requirements, and latitude.
Use your countermeasures for Power Moves (deferral reverse, up-front contract)
Try to push the personal side. Try to get them human
Elevate their ego by asking for help and guidance
Listen
Ask questions that allow them to shine i.e. play into their strength and comfort zone
Implement OK/Not OK Strategy to secure advocacy. For Example:
1) It might help me to provide you with the answers you need to do your job if we can clearly define the assignment.
2) Im glad youre part of the process; it will make things go much smoother. Thank you for including us.
3) I want to make sure we provide the answers you need right away. Maybe you can help me understand the context that will be used to ensure that our proposal and servicing plan with accomplish your organizations business goals and marketing objectives.
In Upfront meeting Empowerment can also be effective. For example:1) Would it be okay if we sat down together & outlined a process to get to an agreement?
2) We are excited about your involvement in the compensation discussion and we could certainly benefit from your help in securing key information from marketing. Would it be helpful for you if we gave you a list of questions that include critical information that we need in order to submit an appropriate compensation proposal?
Dictators Dictators=High level of procurement expertise, Low level of Marketing knowledge
Kinds of Negotiation: Annual contracts (projects as well in smaller companies)
Cues
Mindset is transactional not driven by long term relationship consideration
Uses Power Moves strategically to secure early concessions and control
Likely has detailed cost and rate benchmarks
Can sometimes be a detailed oriented perfectionist
Generally alienates you from other corporate advocates
Can frequently be feared by marketing
Has a commoditized view of both you and the agencies deliverable
Has a detailed plan they follow and is not inclined to deviate
Relies on facts and figures
Slow and not willing to commit to a course of actionGoals
Must get Marketing involved early and often
Get Procurement Dictators to respect you
Give them the impression theyre in control (as youre working behind the scenes)
Best Practice Conditioning Approaches
You must complete and properly execute your negotiation plan
Implement Power Moves Counter Measures
Dont avoid or resist cost transparency discussions
Engage them early and often providing a steady flow of information
Get them to explain their process (trying to educate them will lead to distrust)
Get a commitment from your advocates to coach you (stealth) with procurement
Do not make significant concessions at the beginning of the process
Talk up Agencies value added without pitching themBe sympathetic to role (whats on their plate/how are they measured?)
Tell them that you look forward to working with themAsk them to explain, educate the agency (objectives, decisions, deadlines) --Help the agency to understandAgree to collaborate with them to meet the needs of all parties (Client Marketing, Client Procurement & agency)Support their equal value to marketing (invite them to participate)
Create conditioning messages to be sent by client advocates to Procurement Dictators to broaden negotiation beyond cost and rates. For example:
1) How can the agency and your client marketing team work together to build the metrics (?, Sales, Awareness, etc.) to educate procurement on the importance of the relationship for future negotiations.2) Have you (or anyone else in your management team) had a discussion with your procurement group that touched on The risks associated with cutting the agencys budgets? 3) How can we best communicate the key aspects of your strategic plan to procurement so that they gain an appreciation of quality requirements of the work we do and the quantity of activities that your SOW entails?4) We know that your company is trying to decrease costs, but it appears that your procurement group is not aware of the significant (media buying) efficiencies (X% or Y$$$) that we delivered last year. Can you help us ensure that this efficiency is clearly communicated to procurement? Potential AllyPotential Ally=High level of Marketing knowledge, Low level of procurement expertise
Kinds of Negotiations: Marketing projects, and RFP process
Cues
Mindset is relationship and value based
Focused on Agency requirements
Will be more closely aligned with Marketing
Will have influence with little authority
Will rely on intuition as well as facts and figures
Power moves will be more carrot than stick
Has a process but willing to adjust
Will allow themselves to get personal
Goal
Earn their trust
Get them to help you
Get them to view you as a trusted adviser
Secure their buy-in on compensation dialogue process
Go through and around them to someone of greater influence
Best Practice Conditioning Approaches
Get to know them, their vision, and requirements. Ask personal questions and the
rationale behind their vision and requirements.
Ask TDQs (Pain, Budget, decision questions)
Introduce the compensation dialogue process as a proven an accepted approach to
secure true value in a client/agency relationship
Use a strong up-front contract when you circle back with marketing
Understand how we can make him look good (help him with his internal politics)
Consider giving them financial benchmarks that provide context and frame value
Help them with innovative contracts - incentive based, multi-year discounts
Hold something back (while being responsive)
Building the Potential Allys OKness is critical for building trust with the potential ally (who is also a potential enemy). These are some OK strategies to consider:
1) The agency can be source of info (internet/extranet) to procurement so that theyll rely on the agency2) Be source of expertise help make them look good/smart be their trusted advisor3) Provide them with industry context and market information..As you know in your category marketing budgets are increasing4) Reinforce their own knowledge Give them a pat on Back
5) Leverage their hopes & aspirations to be a marketing partner if procurement, show them work so they can identify with the agencys efforts. Help them make your arguments for you.6) Try to make things easier for themcoach them
CzarBenevolent Czar=High level of Marketing Knowledge, High level of Procurement Expertise
Kinds of Negotiations: Annual and complex contracts
Cues
Starts with costs and rates but recognizes agency benefits when defining value
Generally has strong authority within the company (based on past successes reducing costs) and is respected by marketing and senior management
Will appear as a pit bull driven by Savings Targets
Will eloquently use both carrot and stick Power Moves
Has a proven negotiating plan with cost and rate benchmarks and will not deviate
Will recognize added value if strategically critical, proven and documented
Highly skilled negotiator who is generally liked and feared at the same time
Goals
Convince them you are committed to their goals
Convince them you have saved them (or other clients) money in the past
Get them to believe they are driving the negotiation (not you)
Best Practice Conditioning Approaches
You must complete and properly execute your negotiation plan
Demonstrate your respect for them by finding out their wants needs and requirements at the beginning (prior to circling back to marketing on Steps #1 & 2 in the compensation dialogue process)
Refer to costs and rates as a client investment not a client expense
Get them involved early and throughout the process (Do not alienate them or they will alienate you)
Be proactive in discussing transparency needs and expectations
Ask TDQs (Pain, Budget, decision questions)
Be proactive in introducing performance metrics (other than cost and rates) to validate added value solutions geared to client pain
Play into their knowledge to learn/get information from them
Conduct business reviews, lessons learned, quarterly check-ins
Discuss big ideas/results--Include ROI
Arm yourself with your data agency should really know their stuff
Present options + alternative solutions but not final decisions
Engage in a discussion about what efficiencies they are looking for within the marketing value chain
Probe win-win synergies for example consolidation moves within their organization.
Leverage your client advocates by creating conditional messages that can be sent to Benevolent Czar that validate past cost efficiencies and added values. For Example:
1) The agency proactively implemented a cost management program that resulted in an X% savings; how can you as CMO make sure that procurement appreciates the agencys efficiency initiatives?
2) Is your procurement group aware that the agency identified a new acquisition channel for you that drove your sales by 3% / $X
3) The agency completed projects that were beyond the scope of our agreement (we invested in your business and in our relationship). Those projects had a direct impact on your sales of $1.2 mm. Is your management aware of the agencys investment in your business?
Relationship Focused
Transaction Focused
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