We often get complaints from agencies regarding procurement, but what they don’t realise is that we often go through a tender process in order to assist with running tenders. This may seem a little excessive, but that is how business is going these days, having an RFP process to choose the consultants to run the main RFP process.
This only adds to the frustration I have with the procurement profession and I’m sure many agencies are in the same boat. In saying this there are many people in procurement whom add a lot of value to the process, but too many in the profession slavishly follow process without any thought going to adding value or attaining the best possible outcome.
In two recent cases of tendering we were not successful, but this doesn’t mean we have any ill will. This is because with the first case, we actually withdrew from the process, and with the second we wish we withdrew as we were seeing red flags.
The organisations involved in both of these processes, pledged a high moral standard and integrity as their key values. When in reality the behaviour and practices we encountered during the process fell well short of their pledge. To be completely honest, from our experience, my perception of the two organisations has most definitely been affected for the worse.
Due to confidentiality agreements, I cannot identify the two organisations that we worked with, which works conveniently for them. I completely agree that such confidentiality agreements should be in place, but they should be to protect commercially confidential information, not the subpar work and standards of such organisations.
So what exactly happened in our dealings?
1. Confidentiality Agreements
With both tenders, we were required to sign arduous confidentiality agreements, ranging from 16 to 24 pages in length. I feel strongly about the importance of Non-Disclosure Agreements and Confidentiality Agreements, but only when they are protecting commercially sensitive information. I also feel that they should be easy to understand.
With the agreements we were dealing with, there were numerous clauses, and one even included a clause on Intellectual Property. This clause effectively stated that during the RFP process, any IP that arose would become property of the Party disclosing the confidential information or the client themselves. What made this worse again was that we would also be signing away any existing IP. Needless to say we passed on this.
2. Project Definition
Now that they had the protection of a confidentiality agreement, and the promise of IP without too much work, the organisations obviously did not feel obligated to give a well-defined project definition. There were no provisions of commercially sensitive information. We were left in the dark on agency arrangements, the size of the project or the timeline, yet we were supposed to provide an accurate tender. As for the confidentiality agreement, I couldn’t see the point as we weren’t provided with any information in the RFP that we could not have found out ourselves with a quick Google search or by visiting their website.
I don’t know how they expected us to provide a cost proposal without any of these critical details. And to add further insult to injury our questions were met with…
3. Providing Answers to Questions
Our questions, although not for the want of trying, were completely pointless. Even incredibly simple questions were not answered. Some of my questions to procurement were:
- How many consultants were in the tender process? This was in order to assess our odds of winning the tender.
- What criteria the selection was being based on and what the weighting of such criteria would be. This was so I could configure our response to meet their requirements.
- What the selection process constituted and whether we would be able to meet the client to go over their needs. I wanted to be able to determine whether chemistry was important in their selection process, or whether this process was just seen as a commodity.
All of our questions were refused on the grounds that if these details were not in the procurement guidelines they weren’t necessary for us to know. I don’t understand how they would create guidelines that do not allow the suppliers to measure whether they are right for the project or not. Surely they would want to give the supplier as much information so they could measure their potential return upon participating, and the client could assess probability of the supplier’s success.
I found through my dealings with this type of procurement that the whole process is tarred by a feeling of arrogance, and the idea that suppliers will give up anything and everything to jump at the chance of tendering for their business. Here a problem becomes apparent as the suppliers that are willing to jump through the clients hoops are the very ones who shouldn’t be. Often they are the less capable companies. Surely the client doesn’t want these less capable companies with less chance of success.
4. Time Management
The last straw was the time limit put on us to respond to the RFP’s 69 points. We were given 48 hours, or 96 when you include weekend work. Do they really think that when running a successful business, and juggling overheads and busy schedules, that we have extra staff sitting waiting for RFP’s to come in? That we will dedicate ourselves to showing how perfectly we are aligned with the organisations values?
We made the decision to refuse. But upon notifying them this, we were told that all other suppliers had refused as well and could we give a cost estimation within the next day for their final decision the day after. It did not come the day after, and a full two weeks later we were still waiting for it. We were not surprised as this often happens. Some agencies I have talked to have waited up to 6 months and more for contracts after stopping everything to produce an RFP within a few days for the organisation.
I know that it is not always possible to keep within your time frames and that selection processes can get messy. We have experienced this. But what we do is try to keep everyone in the loop about what is going on to reduce their concerns. When I conversed with procurement on this point, their reply was that their policy is to keep communications at a minimum when regarding an RFP, in order to eliminate compromise.
Suggestions on how to clean up
1. Procurement Guidelines – If you do have guidelines, a good practice would be to go through them and check that they do indeed work towards the best possible outcome both in their application and interpretation. This is especially important in the selection of suppliers as successful collaboration often defines their work.
2. Confidentiality Agreements – These need to be solely for protecting commercially confidential information. Any other clauses are irrelevant and should not be included. To take them a step further, use the agreement to recognise that the supplier also has confidential information and Intellectual Property that needs to be protected.
3. Provision of Information – This needs to be honest and open. Details should be freely provided on the scope, selection criteria, and processes of the project. This gives the potential suppliers the information they require to measure whether they are indeed suitable for the project and whether it matches their interests.
4. Questions – These need to be answered in good time and openly. Any questions on the details of the project should be given answers that are then shared with all other potential suppliers. Although any questions that show the strategic thinking of a candidate, or their own IP, should be regarded as private and only shared if permission is given.
5. Schedule – The schedule needs to be realistic with enough time for each stage in the process. This ensures both parties, the suppliers responding to the RFP and those on the organisation side are clear on the timeframes. If problems with the timeline do arise, all respondents need to be updated on the changes and revised timeline, in order to revise expectations.
Whether the air of arrogance within the procurement process is deliberate or not, I am concerned with its prominence and the subsequent distrust that is created. This is the opposite of the purpose of procurement, which is to create an opportunity for parties to get involved, and that they will be considered justly and in fairness.
What are your thoughts?
If you want some ideas on how to combat the commoditising effects of procurement and the RFP processes, check out this SlideShare presentation I gave to AMSRO last year.
When it comes to building brands and driving change, effective communication is a prerequisite. Unsurprisingly then, communications are often the first port of call when it comes to the unique challenges and opportunities that sustainability represents for today’s brands.
However, emerging cultural, economic and technological trends related to sustainability are forcing brands to think differently about the role of communications in their wider brand ecosystem. As is so often the case, when the game is changing this quickly, a more effective solution requires a redefinition of the problem.
In the future, those brands that take the lead, engage the consumers and drive the growth will be those that understand sustainability as a design challenge, rather than a communications problem.
The future of advertising is experiences, not messages
There are two trends converging here. Firstly, the rise of digital is forcing brands to fundamentally redefine the way in which they interact with their consumers. ‘Digital advertising’ already accounts for more spend than ‘traditional’ and is growing exponentially as the engagement opportunities it represents are unpacked. The fact that a digital application or platform is rich in interactivity immediately shifts the emphasis from advertisers communicating messages at audiences to content creators designing experiences for users.
Secondly, the traditional advertising and marcomms model is seeing an increasingly steep trend of diminishing returns as consumer trust continues to decline. We see this in the data with trust in advertising professionals third lowest after politicians and peer-to-peer communication replacing ‘paid for’ as the main trigger for purchasing decisions.
Consumers are becoming immune to persuasive messages and are patronised by suggestions that a hunk of plastic/metal/electrics will make them more beautiful, confident and virile. They are seeking authentic and useful interaction with their brands and shifting the question from ‘how can you help me impress others?’ to ‘how can you help make my life better, easier or more meaningful?’ Again, as soon as we begin to talk about meaningful brand interaction, we elevate the thinking from communication to design.
Bringing these points squarely back to sustainable brands, the rise of digital allows us to dematerialise much of our communication whilst creating more engaging interaction. Furthermore, the emphasis on meaningful experiences reflects the slow extinction of the ‘consumer’ and the triumphant return of the ‘human being’ as the focal point for brand interaction. More importantly, we are seeing the return of the human condition as the crucible of brand value, not the economic transaction.
The future of behaviour change is context, not information
Consumer behaviour change will emerge as the central strand of the sustainable brands movement over the next decade. As opportunities for supply chain improvement are exhausted, brands will have to look downstream to consumer behaviour change for sources of further progress on sustainability.
Whilst communication has an indispensable role to play in behaviour change efforts, trends are emerging that suggest that further progress will depend on design thinking rather than communications theory.
Many of the linear models of behaviour that have driven the vast majority of behaviour change programmes are logical, rational and built around internal psychological constructs. In broad strokes: knowledge determines attitudes, attitudes drive behaviour.
Whilst working within this paradigm, the role of communications in a behaviour change context is clear: an effective means of transmitting information and therefore shifting attitudes.
Unfortunately, human behaviour is neither logical, rational, nor driven by internal psychological constructs (as the deluge of recent new and repackaged behavioural science clearly demonstrates). By contrast, we are finding that our thought and action is primarily emotional, irrational and driven by external contexts.
The consequences of a paradigm shift in any domain take time to diffuse down to the mainstream. But as this one does, we will all realise that we must enable behaviour change, rather than communicate it; empower rather than persuade; build value in people’s lives, rather than plant messages in consumers’ heads. Ultimately, we need to design products, services and environments, rather than craft messages, images and campaigns.
The future of value exchange is access, not ownership
Collaborative consumption, product/service system innovation, the sharing economy and even cloud-computing can be taken as barometers for a fundamental shift in consumer consciousness: the recognition that the value of a product is located in access or usage rather than ownership.
This shift has significant implications for brand communication. Firstly, in many cases access models are based on more frequent, lower value transactions over time, rather than a single transaction of high value in one particular moment. Secondly, the rise of social media means that purchasing decisions are driven increasingly by peer-to-peer reviews, ratings and recommendations.
This means that as brands move towards an access model, the design of the service platform and experience becomes the primary driver of both brand value and communication. That is, a well-designed service experience is the only way to gain the repeat purchases that the business model relies on — and the only means of triggering positive peer-to-peer communication in the social space.
The future of brand is service, not product
The common thread through the themes outlined above is a shift away from brands built around things to brands built around experiences.
Arguably (and hopefully), this in turn is being driven by a wider shift in consumer culture away from extrinsic value sets to more intrinsic motivations that find value in experiences and not things. Obviously, products are not going to go away — indeed with the democratisation of 3D printing and the rise of the maker movement, we are likely to see a new fetishisation of the physical thing. The point is that we are seeing a growing awareness that the value of the thing does not reside in the thing, but in the experience that it facilitates in the life of the person.
In technical terms, this represents a shift from product-dominant logic to service-dominant logic that would need a separate article to do it justice. In terms of sustainability brands, it has three specific opportunities to simultaneously drive growth and change:
Firstly, a consumer mindset that is conducive to dematerialisation: digital experiences, access rather than ownership
Secondly, an appetite for innovations that help consumers manifest their intentions to live more sustainably
Thirdly, consumer demand for more human-centred interactions based on intrinsic values and genuine human needs.
These have huge implications for how brands communicate sustainability — how we empower lower impact behaviours, how we widen the appeal of access-based value models and how we embody intrinsic values in our programmes.
However, the biggest implication is the need to see communications in the wider context of a brand ecosystem that is changing much more quickly that its natural counterpart. A change that is seeing the shift to a conception of value based on meaning rather than message, empowerment rather than persuasion; value that is co-created with consumers in the context of their lives, rather that embedded within a product or transaction. Fundamentally, value that is designed rather than communicated.
This article originally appeared on sustainablebrands.com. To read it in the original context, click here.
There is a popular misconception in our business, which holds that the average client/agency relationship only lasts between three to four years. We have read it in the trades, on websites, heard it at conferences and have even repeated it ourselves. Now, we find evidence, which implies that the client/agency relationship is much healthier and more sustainable than three years.
Recently we cooperated in the 4A’s compilation of their 2012 agency review activity report. We then collected copies of the 4As tabulations of agency reviews from 2007 – 2012, six years of information. We inspected over 3,200 reviews that were listed. True there are qualifications related to the completeness and absolute accuracy of this data, but while it has flaws (like almost everything in our business) this is one of the best sources of information with a high level of specificity about agency reviews in the US.
It’s Simple Arithmetic
If the three-year turnover assertions were correct, then roughly half of the agencies that were selected during 2007, 2008 and/or 2009, should have been replaced by a different agency (in the same discipline) in less than three years, certainly by the end of 2012. That is not the case. Only 6% of chosen agencies were replaced, nowhere near half. It is mathematically impossible for the average relationship tenure to be only three to four years. Agency relationships are much more sustainable.
A Caution
Clients and agencies should take comfort in this finding. Conventional wisdom holds that agency relationships were sustained for an average of five to seven-years decades ago. Intuitively we acknowledge that personal relationships between client and agency CEOs may not be as close as they once were (due to the demands of modern business life), so that motivation to work things out may have been minimized. However, we have devised other methods to foster sustainability. Apparently, the efforts to select agencies with more scrutiny, the use of search and compensation consultants, the installation of incentive programs tying client and agency success to one another, and the adoption of two-way relationship monitoring and evaluation tools have had a positive effect.
Perhaps the three-year turnover myth was perpetrated by mistaking the ADDITION of specialized agencies (like digital, social, mobile, branding, integrated services) for replacements of more traditional agencies. Much less is known about these relationships. Though the digital space is theoretically more accountable, incentive programs are rarely installed in these relationships. Perhaps that is because they are new and fewer benchmarks for success have emerged. As far as we know there are also fewer relationship evaluation and monitoring systems in place as well with these newer agencies. As a consequence, these relationships could well be in greater danger than traditional agency relationships.
So while we bear good news that should be shared and even celebrated about current traditional relationships, we are cautious about the future of newer digital and marketing services relationships. We recommend that the same disciplines should be put in place between clients and their specialized agencies.
Thanks to our consulting activity, we are embracing the deep changes advertisers face in their marketing activity. Those profound changes have consequences on the advertisers’ organisations but also on the relationship with their communication agencies.
Marketing is facing a profound transformation.
Economic crisis in Europe, slow growth in the US, “strong potential” markets growth rate slowing down, marketing is facing big challenges globally:
- R&D fails to deliver true innovation.
- Product marketing struggles with a highly competitive environment and the loss of sexiness of middle range offers.
- Brands are deprived of their marketing and sales strategies as new players are getting in their path: aggregators, price comparators, search engines.
- Retail is deeply transformed by E-commerce stakeholders.
- Communication strategies need to evolve profoundly to embrace media proliferation, and cope with the evolution in media usage in favour of mobile phones.
- “High speed” marketing is now the rule of the game at a global scale.
This marketing mutation has consequences on advertisers organisation in various ways:
- Because of Internet proliferation, companies are now highly exposed outside. They have no other choice but to develop multichannel communication strategies to best address the various levels of interlocution with their stakeholders. Dealing with multichannel strategies requires expertise and tools both internally and externally within their agencies.
- Articulating marketing strategies is more and more complex, because borders between the various areas of expertise (sales, marketing, communication) are blurring, but also because a high speed of action is required.
- Media proliferation generates cost inflation: marketing organisations internally and collaboration with the agencies need to be reengineered to face with complexity and cost pressure.
How does this situation impact the CMO’s job?
More than ever, the CMO is in the situation of coordinating a high number of projects, involving a high number of third parties. More than ever, he needs to bring in the discussion: a global vision, inspiration, and motivation for his management, his team and his agency roster.
To execute his strategies and best collaborate with third parties, the CMO needs to implement technology in his organisation, in order to get a higher level of visibility and control on marketing actions, but also to guarantee quality in the realisation of these actions.
Marketing is changing, and changing now, to keep on being marketing is a strategic function, bringing added value in the companies thanks to differentiation.
Talents, agile organisations, technology – marketing is reinventing itself at high speed….
A couple weeks back I put together a rant and rave about digital production companies undercutting themselves (see: “We’ve created a monster – on a tight budget”). The gist of the story was that by outsourcing work to cheaper overseas markets we’re really only creating a false economy for ourselves, which will inevitably result in unrealistic prices that will fail to meet the bottom line.
Despite standing on my soap box saying “we’re not gonna take it,” I do realise holding tight on budgets is easier said than done.
But here are a few tips that can help. (more…)
Today someone in my Twitter stream shared the following quote:
“Advertising is based on one thing: Happiness” – Don Draper
Let’s ignore for a moment that Don Draper is not a real person, and that his merits in the actual world of advertising are debatable depending on how big the “Mad Men” fan is in front of you. (more…)
The Church has always understood the power of branding.
As you know, a great brand name expresses in a nutshell the DNA of a range of products, services and experiences.
The Catholic Church requires the Pope to give up his real name and adopt a new one, which can be a useful indicator of the style of his future papacy.
(more…)
“I need the best website possible, with mobile, e-commerce and a gamified interactive experience and all for the ABSOLUTE lowest price, I’m thinking 6k.”
This is a line from an actual client with a successful international business, in response to a quote for a project that would take numerous developers, designers, and project managers more than three months to complete. (more…)
Digital strategy is a fairly new concept in France; and while business is booming, I can’t say I’m pleased by the overall direction it’s taking.
A number of “digital strategists”, like myself, work as freelancers, and not often by choice. A few big agencies have taken the dive and hired a strategist, but these people often have little experience and a broad network of buddies: they’re simply the comfortable choice. (more…)
The latest cultural trends impacting advertising were presented by the SNPTV (the French television advertisers’ association) at its recent Cultur’TV meeting in Paris. It featured contributions from trend tracking agency Beautystreams (represented by founder Lan Vu and creative director Michael Nolte) and sound research institute Sound Value (whose guest speakers were president Olivier Covo and associate director Alice Zoghaib).
(more…)
