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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