Vendor Management: What Marketing Knows That Procurement Doesn’t
What on earth can Chief Procurement Officers (CPOs) and Procurement Teams learn from me (a mere Marketer)?
Though they’d never say it, the question sometimes flickers across the eyes of the different buyers I work with.
They’re wondering: What on earth could I possibly tell them about more efficient supply chain and better vendor management?
Answer: I can teach them the secrets of making their vendors love them.
Why should a CPO take advice from a Marketer?
I’m an Inbound Marketer or Content Marketer.
This means my job is to make customers come to me, to intrigue them about my company's product/service (thereby warming them up for my sales team).
Actually, it’s a lot like flirting. Prospects aren't necessarily interested, so I have to win them over. I have to “woo” them. My job is to interest them, and get them to come back for more.
What does this have to do with better vendor management?
The crux of Inbound Marketing is investment: genuinely understanding and caring about the needs of your target, and working to solve their problems and empower them.
Inbound marketing works because investment nurtures long-term relationships.
And it’s crucial procurement learn from this mentality, because too often vendors are treated as disposable rather than as partners worth investing in
Inbound Marketing can teach us 3 secrets of building those effective long-term partnerships.
Lesson #1: It’s Easier to Maintain a Customer (Vendor) than find a new one.
First, why do we need to invest and think long-term? What’s wrong with disposable vendors?
Because it’s cheaper to keep a vendor. It’s easier. And it’s more effective.
It’s cheaper and easier because finding new suppliers for every project is time consuming. It means new RFPs need to be issued, hours will be burned, and risk of working with an untested supplier will grow.
Constantly engaging new suppliers also means you’re continually working from ground zero. They don’t know your business. They don’t intimately understand your unique needs. There’s no established trust or rapport to buffer the inevitable problems.
The tried but true “it’s easier to keep a customer than find a new one,” also applies to these critical vendor partnerships. The real question is: Are we acting on it?
If we’re not actively working to make our vendors’ lives easier, then we risk losing them.
Lesson #2: Avoid Spray & Pray.
I have a friend who gives great dating advice.
He says: “In the beginning, my flirting approach was like setting off a bomb. I'd hit on anyone and everyone, and just see who responded. But I never got very far. Eventually, I realized I needed to be more like a sniper: carefully choose my target, and go in for the kill."
In Marketing we call that "bomb" the one-size-fits-all approach: spraying and praying. It's nameless emails, mass cold calls, boilerplate content, it's "spraying" your plea for attention, and "praying" that someone responds.
Marketing metrics and analytics agree that generic just doesn’t work.
What does work is targeted marketing. For example, every time I write something (email, blog, or website copy), I know exactly who I’m writing for. I have a detailed picture of them in my head (Buyer Persona).
This targeted inbound strategy works because the more relevant my content, the more likely readers are to identify, engage, and come back for more.
The same applies for Procurement. If your RFP questions are specific and relevant, vendors are more likely to identify a good fit and respond. And because it's targeted you'll get fewer, but higher quality, repsones. You'll also avoid frustrating potential suppliers with irrelevant questions. Lastly, segmented questions also set you up for successful weighted scoring and clearer comparisons.
Take a lesson from an Inbound Marketer: mass emails don't get opened, neither do generic RFPs.
If you want better vendor engagement, you need to target your vendors.
Lesson #3: Be helpful.
The linchpin of Inbound Marketing is offering genuinely helpful content (insightful blogs, secrets of the industry guides, webinars, etc.) that make prospects’ lives easier. My job is always to make readers' jobs eaiser.
That content should never be a sales pitch and should be helpful regardless of whether the reader is interested in buying.
It's a rather selfless approach, but it's highly profitable.
Empowering our vendors makes them trust us and stay loyal.
Conclusion: Be a true partner.
Making empowerement a priority is more intuitive for some than others. One of our strategic partners (in the Benefit Solutions space) really understands the importance of this concept.
They came to us with the explicit goal of becoming true partners to their suppliers. For them, that meant acquiring tools like the right RFP software that would not only make their lives as Buyers eaiser, but would also make life easier for all their vendors as well.
Their priorities are worth noting.
This is an organization ahead of the curve, because they truly understand that the best long-term procurement strategy is one where both sides win.
Start empowering your vendors.
*Image credits: Anna Spady