While a majority of agency executives are spared from dealing
with (corporate) procurement departments during the negotiating
process, those who do are frustrated by having to answer to
executives they say haven't a clue about PR.
Still, although dealing with procurment execs can be a pain in
the neck it often pays off in terms of agencies getting a foot in
the door and/or winning larger budgets from big-name accounts.
Those are two of the main conclusions from an exclusive two-part
study on (agency side) procurement conducted by PR News and
Counselors Academy. (For the corporate side, see PR
News, Feb. 23.)
"They set it up in such a way where they're not only comparing
apples to oranges but kumquats to peaches," says Mike Mulvihill,
president of Richmond, Va.-based Carter Ryley Thomas PR,
referring to how some procurement officers view PR services the
same way they view buying paper clips.
One remedy is for procurement officers to be more closely
aligned with their PR managers rather than leaving them at the
water's edge. "The successful companies understand the functions
need to work together," Mulvihill adds.
And, with apologies to Grateful Dead lyricist Robert Hunter,
sometimes you get shone the light in the strangest of places if you
look at it right.
As one agency rep responding to the survey quipped: "We
eventually found the purchase department to be a potential source
of revenue and a good source of referrals within the company."
1. During the last year, have you participated in the
negotiation of a public-relations contract in which the client's
procurement department was involved?
| Response Percent | Response Total | |
|---|---|---|
| Yes |
30.1%
|
31
|
| No |
69.9%
|
72
|
| Total Respondents: 103 | ||
2. Describe your role in that procurement process.
| Response Percent | Response Total | |
|---|---|---|
| Project leader |
59.4%
|
19
|
| Participant |
28.1%
|
9
|
| Advisor |
3.1%
|
1
|
| Other (Vendor, CEO) |
6.3%
|
2
|
| Total Respondents: 31 | ||
3. How much time would you estimate your agency spent working
through the procurement process? (Sample)
- Appoximately five hours on and off.
- Forever. Several weeks.
- 75-125 hours.
- For a large global client, around 200+ hours to set it up.
- 20-30 hours.
- Client's procurement officer (Fortune 500 company) was
extremely well-versed in PR, so it was not too difficult. On the
other hand, working with state-government procurement reps is
impossible.
Total Respondents: 32
4. Did you win the business?
| Response Percent | Response Total | |
|---|---|---|
| Yes |
66.7%
|
20
|
| No |
33.3%
|
10
|
| Total Respondents: 30 | ||
5. Did the procurement process have a positive effect, a
negative effect or no effect in any of the following areas?
| Response Percentage | Response Total | |
|---|---|---|
| Agency efficiency |
74.1%
|
20
|
| Value of service offerings |
44.4%
|
12
|
| Relationship with PR client contact |
59.3%
|
16
|
| Ability to be more competitive for future new business pitches |
51.9%
|
14
|
| Total Respondents: 62 | ||
6. What were some of the stumbling blocks in the procurement
process? (Sample)
- Client not knowing exactly what they wanted; having us re-bid
three times for various alternatives and then a fourth time after
client reps decided it was too much for themselves. - In trying to standardize their procedures and contracts, the
procurement team laid out completely unrealistic terms. They wanted
60 days net pay only to be paid at the completion of all
projects. - Too much involvement by the client's legal department. Client
changed specs after bids closed while request for proposal (RFP)
was poorly written and unspecific. Client was also slow in
responding to requests for RFP clarifications, and client wrote RFP
so that only one or few companies could qualify. - Contract officer (finance) and client contact have different
rules for engagement, different standards for reviewing
pitches/proposals (cost versus effectiveness) and often don't speak
- or cannot speak - with each other.
Total Respondents: 20
7. Which outside experts, if any, did you involve in the
procurement process?
| Response Percent | Response Total | |
|---|---|---|
| Legal |
20%
|
5
|
| Accounting |
28%
|
7
|
| Auditing |
4%
|
1
|
| Marketing |
12%
|
3
|
| Did not enlist the help of outside experts |
44%
|
11
|
| Total Respondents: 27 | ||
8. Which of these disciplines proved most helpful or had the
most workable solutions for improving the client/agency procurement
experience?
| Response Percent | Response Total | |
|---|---|---|
| Legal |
18.2%
|
4
|
| Accounting |
27.3%
|
6
|
| Auditing |
4.5%
|
1
|
| Marketing |
4.5%
|
1
|
| Did not enlist the help of outside experts |
36.4%
|
8
|
| Total Respondents: 20 | ||
9. In your opinion, what could help strengthen the
client/agency relationship during the procurement process?
(Sample)
- Procurement teams need to be less rigid when going through the
process. Understand that some services will not fit within neat,
pre-set parameters. - A better understanding by the procurement (purchase) department
of the nature of PR work. Interestingly, we eventually found the
purchase department to be a potential source of revenue and a good
source of referrals within the company. - Being able to talk realistically about money/budget upfront.
You can develop a strong program for $100,000 or $1 million, but
there's a big difference in what you can do. It would be fairer to
the client and the agency to discuss the budget upfront so there is
no time wasted and no unrealistic expectations on either end. - The client should maintain a direct relationship and simply not
defer to procurement. Procurement plus the client at the table
feels much better than only procurement. - Personal interviews early in the process, examples of work.
Sounds basic, but in my experience, it's rarely been used. I like
it, of course, when it's me, but I also see some contracts go to
bad people for the same reason. - Stopping the procurement process altogether. Having a live
person who is more accessible versus having to send in e-mail
questions and waiting for responses. - Both sides to know guidelines and procedures. Often, this is
the blind with power leading the blind supplicant.
Total Respondents: 49
10. Whether or not you have been through the procurement
process, what reasons would make you willing to go through
it?
| Response Percent | Response Total | |
|---|---|---|
| To get a foot in the door with a big-name client |
65.3%
|
47
|
| Large budget |
56.9%
|
41
|
| Help prove PR's value to senior management |
18.1%
|
13
|
| Help make the agency/client relationship more of a partnership |
22.2%
|
16
|
| Good corporate governance |
13.9%
|
10
|
| Would not be willing to go through the process at all |
19.4%
|
1
|
| Total Respondents: 72 | ||
Total Respondents: 103
** Response rates vary per question
*** Response totals vary with total respondents due to multiple
choice