A global confectionary company with HQ in the US has embarked on a mission to reduce cost and improve strategic supplier relationships. While making strong progress in most areas, Brand and Marketing has been a challenge to engage due to their perception that Procurement lacks subject matter expertise. In order to address this perceived shortcoming, the Global Director of Procurement turned to OnDemand Resources for help to provide a Marketing Spend Sourcing Expert who could lead projects across the Brand and Marketing Category. OnDemand engaged a former client and current independent consultant / member of the OnDemand Professional Network Michelle Griffith to help the company develop and execute strategic sourcing relationships with their Marketing partners.
The Marketing Category was challenging – Client had a large portfolio of brands (15+) and a large portfolio of agency types on the roster (15+) – all at different life cycle stages and with significantly different budgets. Additionally, the Client was transitioning a new piece of business, bringing in not only new brands but also new staff members that were not accustomed to their policies and practices. Single sourcing was happening throughout the organization as the procurement function was relatively new to most. Michelle started to engage with Brand and Marketing on smaller projects to build momentum – she understood that building trust and relationships is critical to procurement success. As time progressed, she was able to demonstrate significant procurement value and was tasked to lead larger and more complex sourcing engagements. Her success in building substantial procurement momentum helped Brand and Marketing deliver significant and sustained results. The Client was so impressed with her capabilities that they extended her contract multiple times.
APPROACH & CRITICAL SUCCESS FACTORS
- Procurement must invest the time to learn everything about the brand(s) and understand the issues, challenges, and goals in order to gain the trust of their Brand and Marketing colleagues.
- Procurement must also understand that standard sourcing strategy is not always applicable to Marketing engagements, be creative in the approach taken, offer alternatives that fit the situation but ultimately can deliver the results needed.
- Know the market and changing technologies facing Marketers (i.e. Digital and Social vs. Traditional).
- Having subject matter expertise can help build the bridge between Procurement and Marketing.
- Use industry data, benchmarks, and news as a basis for negotiations. It’s not just about the ‘Hourly Fee’ – know your resources experience, the should cost of deliverables and industry standards for total resource hours for your project needs.
- Start small. Procurement’s engagement in the first term was limited, being introduced to the brand teams late in the term with most of the scopes in discussion having previously been drafted and reviewed with agency directly by the brand teams. Even with the late engagement, by introducing the use of benchmark data we were successful in realizing a 10% savings on the just over $6M in fees. These savings helped to build trust with the brand teams and build their desire to partner with Procurement in the future.
- Agency Outreach – a formal introduction of Procurement and the role they would play in ongoing negotiations was made to the agency roster.
- Standardization – in the second term of the consultant’s engagement Procurement developed and implemented a standardized rate card and scope template for use in agency negotiations. By this time Procurement was leading the discussion on over thirty individual scopes of work, therefore the template had to be flexible to address the varying degrees of work needed across the brands. Use of the tool was ultimately accepted by most agency partners providing a standardized tool for Procurement and Marketing to rely on. Use of the template by the internal brand teams also aided in providing the agency partners with a more clearly defined scope of work leading to meaningful commercial negotiations with Procurement.
- Negotiations – by addressing the total agency fee including staff plan, resource hours, hourly rates and total cost of deliverable we were successful in realizing an average 25% cost savings on over $11M in agency spend for the client in the second term.
- Organizational support – a close partnership with our legal colleagues and alignment with Global Procurement Leadership, helped in realizing these results.
- Expanding Services – by the end of the engagement Procurement had led six RFPs in the Creative Agency, Shopper Marketing and eCommerce areas on behalf of their Brand and Marketing partners.
MEET MICHELLE GRIFFITH
OnDemand Professional Network Partner Since 2019
Michelle has led Strategic Sourcing initiatives in the Financial, Hospitality, Gaming, Consumer Goods and Food Manufacturing sectors with a focus on indirect spend in the Marketing, Creative and Communications categories. Aimed at maximizing value and reducing risk she has successfully negotiated enterprise agency agreements in the areas of Creative Advertising, Social/Digital Marketing, Digital/ Traditional Media, Shopper/eCommerce Marketing, Retail Merchandising, Direct Marketing and Marketing IT Technologies. In her various roles as both client and provider throughout her career, Michelle has gained a unique perspective not held by most. In 2008 Michelle joined Green Dot Corporation in Pasadena, CA as Director Supply Chain. In this role she led her team in the creation and implementation of programs to assess and promote supplier performance and development, including the introduction of contract-based partnership agreements which led to a 30% cost savings. Working with all cross-functional teams she was able to effectively strike a balance between highly creative/innovative solutions and costs. After relocating to Nevada, in 2014 Michelle joined Caesars Entertainment’s Strategic Sourcing team to manage indirect spend for their Marketing and Creative Services. In this role she collaborated with corporate leaders to drive synergies, improve strategies, and organize efficient operations. Michelle attended Ashland University where she earned her Bachelor’s Degree in Marketing and Business Management.