PROCUREMENT: Is It The Scourge Of Modern Marketing?

By - CTL
July 17, 2017
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By Marcus Honesta.

Kristof Fahy, Ladbrokes Coral, Chief Customer Officer, has belled the cat in an address he delivered at the ProcureCon Marketing 2017 conference in the UK this month.

The Ladbrokes Coral Group is a leading multi-channel betting and gaming business with an impressive reach and an international presence in major regulated markets across the world. They have net revenue of over £2 billion annually.

The betting brand CCO believes: “The procurement department needs to embed itself within the marketing team to truly understand its challenges.

“The procurement team needs to understand that marketing is about more than “balloons and t-shirts” and should adopt shared KPIs so they can work closer together”.

Fahy started his talk by admitting that he has not always been “a fan of procurement. This is mainly due to the department taking a ‘lone ranger’ approach. Procurement tends to do things on their own and won’t ask the marketing team for their opinion. There’s a lack of talking and conversation. We need to stop this lone ranger approach”.

This strained working relationship is not only felt by marketers; a new report by Globality shows that only one quarter (26.7%) of procurement professionals say they have a ‘strategic’ relationship with their marketing team. Some 29% of marketers would characterise their relationship as ‘open’, while 14.3% describe it as ‘challenging’.

Fahy also believes the department should: “focus on more than just being ‘the cost police’, as it will not help them to make friends within a business. It doesn’t mean we want you to stop saving money, but it shouldn’t be the only KPI”.

 

Fahy urged procurement directors to form proper partnerships with their marketing departments by embedding themselves within the team, and by understanding what their challenges are.

He explained: “Marketing is not the balloons and t-shirts department. Understand what marketing is and what it does. Understand the challenges – and not just the everyday ones, but also pressures from other departments. For example, finance will want to know what the ROI is [on our campaigns], and HR will talk to us about talent and development.”

Fahy encourages the procurement department to have shared KPI’s, such as acquisition and retention targets, so that the team becomes aligned with marketers’ goals. He also believes the department needs to be happy to be rated.

“With every single project, you rate us and we’ll rate you. Let’s have a proper rating system, [with more] openness and transparency. I don’t think we currently do this, but we should be having these conversations in the same room”. Ultimately, Fahy stated the real opportunity for the procurement department is to help the marketing team “navigate the maze of opportunities”, pointing to the complex marketing technology landscape.

“Help us with issues of viewability; are my ads being seen? How can we reward media agencies? Are we getting ripped off? Bring me different models, views, don’t just give me the same stuff. [Procurement] should be on this like a rash. I want you to lead those conversations because I can’t, as I’ve got to look after KPI’s, turnover, cost and acquisition.”

However, when an audience member questioned Fahy about Ladbrokes’ current relationship with its procurement team, he admitted “there was still a way to go to improve their relationship, which he put down to the merger with Gala Coral, which is planned to go through this week”.

He concluded: “What I did do was bring [the team] along with me, to show them the conversations I have. Hopefully we will get there, but at the moment if I rated it, I’d say it would be 6.5 out of 10. But to be fair, we’re in the middle of a merger.”

It is refreshing to find a CCO who is not blindly led by the accounts and auditors, with little or no regard for the creative and marketing process. In this writers view, investing in a creative Marketing Programme is not the same as buying 100,000 tons of sugar or 1,000,000 Bic ballpoint pens. However in my experience most procurement officers have no experience in the production / Marketing or the Advertising process, nor do they care about it.

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