Bringing Marketing and Procurement Together to Form Stronger Partnerships with Marketing Suppliers
Procurement has quickly adopted a role as a strategic asset to the organization. Where once procurement was typically viewed as a cost center, recent innovations, technology developments, and changes in thinking have revealed that procurement can not only help the company reduce costs but also add value to its operations.
Previous studies conducted by Worldwide Business Research have revealed that procurement decisions work best when they are accompanied by expertise. For example, the procurement department can make better decisions about its technology purchases by partnering with IT experts both inside and outside the organization before making decisions. Likewise, marketing procurement can be aided by partnering with the organization's marketing department.
As such, both marketing and procurement must play a key role in selecting marketing partners like agencies, publishers, and creative companies. With a coordinated effort, both teams can help the organization form strategic partnerships with other marketing firms.
Here are a few ways in which marketing and procurement can work together to form stronger bonds with marketing vendors.
Applying Core Procurement Functions to Marketing Suppliers
There's some debate over whether marketing suppliers can be treated the same way as other suppliers, such as those who provide the organization with goods or core services. Marketing agencies tend to be creative outlets that aren't governed by the same supply chain restrictions as companies that deliver physical goods.
But procurement should play a significant role in negotiations with marketing agencies and other industry players. They can even use their supply chain intelligence tools to conduct research into prospective partners and provide the organization with an edge in negotiations.
Procurement can also step in to help manage marketing costs. The function can play a key role in enforcing supplier governance and identifying opportunities for cost reduction. This will allow the marketing department to focus more extensively on marketing processes instead of concerning itself with out-of-scope projects and purchases.
Improve the Organization's Visibility into Its Marketing Suppliers
One of the most significant points of contention between organizations that their external marketing partners is the issue of trust. A lack of transparency when it comes to data and value can breed skepticism on behalf of the organization and frustration on behalf of the marketing agency. Generally, most organizations want to be able to identify where their marketing dollars are being spent and how each dollar contributes to the organization's bottom line.
Obtaining visibility into the supply base has been a challenge in the past, even for procurement. According to SupplyChain, as many as 65% of procurement leaders have limited or no visibility beyond their tier 1 suppliers.
But this is one area in which the procurement function can excel if it has the right tools to do so. Procurement can lend its technology tools and analytical skills to help the marketing department understand how its relationships with specific partners affect key metrics within the organization. Primarily, procurement can assist the organization in gaining better visibility into its marketing suppliers.
Identifying Strategic Partnership Opportunities
The marketing department is naturally in the best position to identify which types of marketing suppliers will suit the organization's needs. But as a strategic function of the business, procurement can also play a role in selecting which marketing vendors will make the best strategic partners, especially in terms of cost.
Typically, a strategic partner is an external company that can provide the services and resources the organization needs to achieve its business goals. These types of partnerships are mutually beneficial, so there is often a way the organization can gain an advantage in negotiations by offering the external company something it needs to achieve its own business goals.
While the marketing department can help to identify partnership opportunities by analyzing a vendor's capabilities, the procurement function can help by diving into its vendor intelligence and identifying each vendor's needs and pain points. Once an opportunity is found, all the parties can come to the table with a mutually beneficial proposal.
Learn More at the Next ProcureCon Marketing Event
The decision to purchase services from a marketing vendor like an agency shouldn't be taken lightly. Long-term contracts that don't produce ROI can result in wasted spending. Organizations that aren't prudent about their partnerships risk investing significant amounts of money into marketing projects that don't produce value.
But by combining the skills of both the marketing and procurement departments, the organization can identify the best marketing providers to work partner with. Both departments bring specific skillsets to the table. Combined, they can help the organization form long-lasting strategic partnerships with marketing vendors that produce real value.
To learn more about how procurement and marketing can work together to drive value, don't miss the next ProcureCon Marketing event, happening from December 6th to December 8th at the Omni Orlando at ChampionsGate Resort in Orlando, Florida.
Download the agenda today.