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Saturday, 20 December 2014

In defence of procurement

Like many agencies, we increasingly find ourselves working with global procurement teams within client companies.

Much has been written about why this is a “bad thing” and why buying insight “is not the same as buying toilet rolls”. Yet there is relatively little discussion about why dealing with procurement is great news for research agencies. For starters, it usually means that the procured service is of significant value, of large scale, required over a long period of time and across a wide portfolio of geographies.

Yes, the procurement process is sometimes (if not nearly always) arduous and lengthy. It requires a good deal of time and effort from all parties. The data must be sufficiently flexible to be sliced and diced in multiple formats; the levels of detail required of how a service may or may not be delivered can sometimes seem manifestly obtuse. But dealing with procurement departments is an opportunity not to be missed. Finally, we can start to monetise our “thinking time”.

I absolutely support the idea that we are being forced, however reluctantly, to put a price on our ability to think strategically, on our ability to deliver incredibly clever analytics and on the tools we use – both mental and actual – to synthesise customer feedback into competitive advantage.

“I absolutely support the idea that we are being forced to put a price on our ability to think strategically, on our ability to deliver incredibly clever analytics and on the tools we use to turn customer feedback into competitive advantage”

I have long believed that research professionals on the clientside more than understand that thinking time is worth investing in: they do believe that it creates value and are prepared to pay for it.

All they need – and have repeatedly asked for – is a clearly defined price tag. Historically the industry has shied away from the sheer bluntness of this. But that is why embracing procurement warts and all is such an opportunity.

Agencies which are capable of producing, within tight timescales, a clear architecture for pricing, managing, securing and delivering sizeable insight-powered global consulting programmes, will without doubt reap handsome rewards.

Through the procurement process itself they will have proved that their own businesses are managed with good governance and with more than sufficient wherewithal to respond to the sometimes complex demands of a global request for quotation.

Post procurement, the client/agency relationship will begin to take on a totally different hue. Trust has already been earned: hard work and commitment on both sides has been truly road-tested, a working relationship has been allowed to develop and a contractual handshake has agreed a mutually beneficial price tag.

Once the vetting is complete the agency choice will, in most cases, have been communicated widely throughout the client organisation. Even the finance chief may now know who the research agencies are and what they do. To have the corporate purse-holders on side, is one mighty step forward for the insight industry.

The client sponsor – be that insight, customer experience, or brand or marketing teams – can rest assured that due diligence has prevailed: insight has taken commercial centre stage (which is always a good thing) and the task of providing the business with profitable rocket fuel can now commence.

Agency fee structures are set. Complete transparency is achieved. And although the task of convincing clients as to the merits of insight projects may still be required on an ad hoc basis, at least this backdrop allows both parties to give more time to the pivotal task of enhancing bottom lines.

Clare Bruce is CEO of Nunwood

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Readers' comments (1)

  • Interesting column, and you do discuss a very valid point.

    Just to add to it, the difficulty client-side researchers face is being able to justify agency X over agency Y for a given project. As you allude, many procurement teams see research services as a fixed commodity - 1 qual and 1 quant = £40k, for example, and why should it cost any more.

    Although ease of working with an agency isn't quite the same as quality of service, those that are easiest to work with are often those that can justify their price. As discussed elsewhere, commoditisation of research means that the intangibles have become more important, and what clients are paying for now is the understanding, thinking and depth of insight that an agency can provide - the value-added service, if you like. While it's never easy to say that "we add £10k of top-notch thinking, that's why we cost more", that ability to explain to procurement why one approach is worth more than another is incredibly useful.

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