Is Procurement the Ad Agency New Business Enemy?

Interview with Mattel's ex-procurement chief
by Todd Knutson

procurementWhen you mention to a new business person that "procurement" is getting involved, the typical reaction is dread. You've built rapport with your prospect, established their need, demonstrated how your agency can meet it, and now someone who doesn't know you is is going to weigh in, with their ability to say, "no", hanging over your head. Your fear is that all procurement people care about is getting the lowest price, so the months you've spent getting where you are today may have been a total waste.

Dave Wilson, Ex-Procurement chief at Mattel begs to differ:

The biggest myth is that procurement people are the devil incarnate; most of us are decent, honorable people!

Brent Hodgins of Mirren interviewed Dave last month. Here are some highlights:

On lowest cost vs. quality:

  • Cost is certainly one factor, but, for agency services, it should be less important.
  • A good procurement process should weight quality and service above cost.
  • Lack of top-line revenue growth during the recession put an emphasis on reducing cost; revenue growth should reduce that emphasis.

On the biggest mistakes that agencies make when dealing with procurement:

  • Viewing them as "the enemy".
  • Not building relationships with individuals in the procurement department.
  • Not recognizing that procurement's job is to protect the client's interests.

On who should negotiate with procurement, and what they should be prepared for:

  • Have people separate from account service do the negotiating.
  • Be prepared.
  • Be objective.
  • Procurement may try to intimidate: you can't fall into the trap and become emotional.
  • Having a lawyer present to deal with contract language may be helpful.

David will be providing many more insights at the Mirren New Business Conference 2010. I've attended the conference since its inception and recommend it. If you plan to go and haven't registered yet, you'll receive a discount if you use this code: LIST2010. [Neither I nor The List have any financial interest in the conference.]


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