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Tips for Procurement when engaging with Marketing – Part II

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Here’s continuing from where we left last month.  This part two includes three more tips, which can help procurement play a vital role in marketing services outsourcing and vendor engagement.  The dynamics of supplier–customer relationship being a little different for marketing; these tips along with the three others shared in Part I of the same piece can give procurement the edge they need!

  • Appreciate the People Oriented Nature of Outsourcing

The output in outsourcing for any marketing deliverable is heavily dependent on the comfort level and shared understanding among the trading parties.  Hence it is said that the success of marketing is dependent on people rather than on factories. This is true for marketing services outsourcing as well.  It thus becomes highly important to maintain a positive atmosphere of trust and reward which inspires the ingenuity and passion of the servicing personnel.  A sub-optimal rapport can play havoc on the output and end up dissatisfying both the parties.  All vendor negotiations and cost reduction requests must be driven by this fact.

  • Help Marketing Think Beyond Hourly Rates

Marketing services do not operate in ‘perfect market’ conditions which are so popular in economic theories; they are highly differentiable based on supplier expertise and skills.  There is also rampant information asymmetry in the marketing services pricing.  Hence, going primarily by the hourly rates when choosing a vendor might be naïve and unwise.  Marketing employees  who are novices to outsourcing often tend to get attracted to overpriced vendors.  Procurement can help champion a possibility where a low priced agency is also the most sophisticated in punctuality and quality of the output.  The ultimate ‘value realized’ should be the key driving force for decision making here.

  • Focus on Improved Efficiency and Reduced Cost of Alignment

It might feel counter-intuitive when marketing folks seem intent on continuing with a select vendor for their subsequent outsourcing needs despite nominal price reduction by that vendor.  This is because of the invisible cost of ‘vendor alignment’.  Time and effort being such very precious resources, working with a vendor who doesn’t understand the business and is not well versed with the company’s communication tone and style can be an execution nightmare.  Well aligned agencies work much faster and are far less iterative.  This is a benefit that procurement can help in quantifying.

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