Procurement If You Want It: Most Marketers Eschew Inside Help When Sourcing Products

Here's a question for email marketers: Do you involve your company’s procurement team when hiring vendors? If you do, you’re in the minority. 

Only 26% of marketers actively partner with procurement in identification, selection and negotiation, according to Smart Spending At Speed, a study from the CMO Council and KPMG. 

But they should, as procurement can provide these benefits, the study contends:

  • Standardized vendor management processes 
  • Better procurement cycle time* 
  • Vendor price competitiveness
  • Focus on vendor innovation capabilities 
  • Improved vendor performance management

The top three sourcing areas that involve procurement are martech, marketing event services and media agency selection.  

The study found that procurement participates mostly in sourcing MarTech — “a good thing considering MarTech is arguably the most important and difficult purchasing decision a modern marketer makes today," it says.

For many firms, Martech can involve email marketing systems. “When sourcing foundational MarTech, like CRM and email marketing, there are a lot of considerations,” the study notes. 

Take the case of tech firm Commvault. That firm’s CMO, Isbabelle Guis, “relies on the company’s IT procurement team to provide their expertise on a product or service. This includes making sure vendors meet technical requirements, negotiating competitive rates, establishing service level agreements, and considering secondary features like compliance and security.”

Guis says, “It is a great collaboration between marketing and IT procurement to ensure that we are getting the right services for our needs, and also doing what is best for the company.”

Selecting agencies is a little different. 

“There’s good reason why many marketers don’t want procurement involved, especially when sourcing creative services.,” the study says.  “More than a few CMOs feel procurement has neither the marketing acumen to evaluate creative services nor the mandate to do so.” 

Paul Suchman, CMO at Audacy, claims that the “single biggest challenge of bringing outside creativity into the workplace is procurement,” says “Their primary filter is cost and benchmarked rates – though I’m not certain whose benchmarks.” 

But that’s not true in all cases. 

“We whittled down some 25 creative agencies to three,” says one marketing leader. We eliminate extra costs by driving more business through a select group of agencies on a pre-contracted rate. Our creative costs went from 25% of budget to less than half of that.” 

The findings are  based on a survey of over 200 marketing leaders in both B2B and B2C and in-depth interviews with executives at brands

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