How businesses can buy better

In the current economic environment, neither B2B marketers nor procurement professionals can afford deals which fail to deliver the promised value for their companies. In this respect the disconnect between many marketing and procurement departments is remarkable.

Few people in the corporate world would find it a surprise that there is little interaction between the procurement and marketing teams within most organisations. Some suggest that procurement is all about ratio, whereas marketing is largely about emotion.

It is often the case that procurement sees its role as that of a ‘shield’ for internal departments, protecting them from ‘pushy’ marketing approaches. Whilst in some cases a valid approach, this also restricts valuable contacts between suppliers and internal users, resulting in the delivery of products and services that do not fully match business needs.

Fortunately in many large organisations, both procurement and marketing disciplines are now showing signs of reaching new levels of maturity and are creating opportunities to connect with each other. In fact these disciplines have more in common than might be expected. Here are some examples:

In order to deliver key services successfully, both disciplines need to influence many parts of what are often complex internal organisations with multiple business units and local country operations. In the case of marketing, this could be for the purpose of generating a consistent brand expression throughout the organisation. For procurement, this could lie in the coordinated sourcing of services and materials.

Both disciplines share a challenge in measuring their added value to the business and communicating this effectively to relevant internal stakeholders. In marketing quarters, the concept of ROI is currently a popular topic for publications and seminars. And, within many organisations, procurement is moving from measuring performance based on savings from supplier selection and price negotiation towards a more complex set of key performance indicators. These can include elements such as ‘lifetime value’, and the department seeks to appraise service quality and internal client satisfaction.

It is safe to say that in today’s business markets, the focus is increasingly on sustainable business value. Both suppliers and buyers are looking to connect better with each other in the value chain to achieve this and it can only be delivered via a clear and thorough understanding of each other’s business objectives.

As with many multi-disciplinary projects, starting with small, well-defined steps can work very well for both disciplines.

For marketing, the focus must be on making it easy to buy. Marketing must offer relevant choices with the relevant information, whilst providing clear insight into the value its proposal delivers to the client’s business.

For procurement, by enabling (preselected) vendors to take a closer view of organisational objectives and challenges, the department could benefit in the long run. Allowing marketing to interact with internal clients can help generate a better matching solution and increased buy-in from stakeholders.

Procurement should also take a look at how it is perceived as a customer, making an honest appraisal of its appeal to potential vendors. Becoming a preferred customer to key suppliers can add tangible value to the business. Looking at the potential for new pilot projects with key suppliers can also give the organisation a leading edge over competitors. Equally, it can help position procurement as an important contributor to strategic development and innovation within the company.

A practical place for marketing and procurement to start learning from each other is within your own company. For example, marketing can support procurement by:

• Assisting with internal awareness campaigns to address the procurement challenge of creating visibility for (indirect) spend

• Supporting internal client satisfaction measurement methods and techniques.

Likewise, procurement can support marketing by:

• Providing insight into procurement practices and methodologies

• Supporting the sourcing of selected marketing supplies and services

• Advising on the definition of a set of key performance indicators articulating the value of products and services in a way that makes sense for buyers.

 

And the departments can work together for mutual benefit by:

• Running a brainstorm on how the two disciplines could add value to each other

• Involvement in cross-functional training or exchanging talent through job rotation programmes.

Very few companies can lay claim to the perfect approach. Taking small, practical steps towards working together can reap dividends for both sides as they develop a better understanding of each others’ business issues and challenges.

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