A new kid in town
Over the years, we in the creative industries have become pretty good at overcoming the creative/suit divide to explain and sell ideas. Coming up with the smartest, most creative idea should be enough to seal the deal between agencies and clients.
But all of a sudden, there’s a new kid in town. One or two more people are sat in the room at pitches, and we find them to be mysterious creatures. “Procurement,” someone whispers. The increasing involvement of the procurement function in the purchase of creative services is changing the pitching process and we’re a bit unsettled. Prejudice tells us that ‘these people’ are all about counting beans and comparing prices for pencils. They’ll only look at the numbers! Frustrating, as despite the economic climate, it’s simply not feasible for successful tenders to be solely price-driven.
In response, we quickly seek to optimise our pitching process to what we think must appeal to the archetypal bean-counter to underline value, efficiencies and savings. Strangely though, the strategy isn’t as successful as we’ve envisioned. And we’re unhappy anyway, because this is not what we’re in the industry for.
Where did it all go so horribly wrong between procurement and us creatives? We here at GyroHSR decide to approach the problem the grown-up way: with the closest thing to counselling we can find – we commission serious research and have other people shine some light on our peculiar relationship with procurement.
The research
And so, over several months, a swot team of MBA students from Lancaster University Management School – one of Europe’s leading business schools – sets off to leave no stone unturned in the GyroHSR network (18 locations and 600 staff worldwide) and in the world of procurement, to help us explore how agencies can adapt to the growing necessity of dealing with procurement functions. The resulting report looks at perceptions and misconceptions on both sides – and reveals how agencies might re-shape their rules of engagement, forcing us to take a good hard look at ourselves.
The research findings are pretty interesting – more than half of procurement professionals now get involved in putting together their agency roster, half of procurement professionals actively participate in negotiation with agencies and 45 per cent of the procurement professionals have a say in agency selection.
Before agencies are even involved, our research reveals a tension between client-side marketing and procurement teams. Not only do they have different motivations, their performance gets measured differently and there is a clear difference even in the language they speak. Add differing structures and cultures within organisations and you can begin to sense the lack of clarity created by procurement’s involvement in the creative pitching process.
That good hard look in the mirror
As much as it might hurt, there are a couple of shortcomings on our part, too, making our dealings with procurement more difficult than necessary.
Most procurement teams adhere to heavily structured processes. To them it is essential that agencies understand these procedures and motivations – and then structure their case to address these. Well, this research is a start, we hope.
A common perception amongst agency pitch teams is that procurement don’t care about the value of ideas, it all boils down to basic hourly rates – which they then want to negotiate as low as possible.
Procurement professionals tell us that the agency must not undermine the importance of creativity as part of its value proposition. Indeed, they tell us that it’s dangerous to undersell creativity in pitches by assuming that procurement does not understand it.
There’s also a disconnect between procurement professionals’ selection criteria and agency perceptions. Procurement people tell us that referrals, credentials of team members and the past track record of the agency are key factors in agency selection. Agencies tell us that they think that the criteria are reputation, competencies, differentiation, availability, commitment and price.
Feedback is essential to understanding where strengths and weaknesses lie, but the common agency view is that the feedback provided by clients for unsuccessful pitches is vague and unusable. However, our research shows us that the onus lies on the agency to obtain feedback, both from unsuccessful pitches and from successful ones.
Is it love yet?
Throughout our project, one thing was clear: procurement is here to stay. Rather than avoid the reality, it will benefit agencies to forge relationships with procurement professionals as they do with marketing contacts.
Our research shows that procurement teams in reality are not all the faceless bean-counting machines that agencies consider them to be.
They are open to communication, invite greater involvement throughout the pitching process and want to be perceived – and treated – as a professional partner in the buying process. They recognise their shortcomings and are actively looking to agencies to help educate and develop their creative appreciation.
Quite lovable, actually.
By Fiona McFadden, head of PR GyroHSR