There is an increasing use of Request for Tenders and Requests for Proposals (RFX) by procurement in selecting strategic marketing suppliers. In fact the trade press, especially in the USA is often filled with articles about agency complaints about procurement run pitch processes.
I am surprised that there are not more complaints from marketers about the heavy reliance on the RFP and RFT (RFX), because largely it is a flawed way to select a strategic partner.
So what is a strategic partner?
As part of our Strategic Supplier Alignment process we segment marketing suppliers into three categories:
- Simple or General
Strategic suppliers are seen as essential to developing and delivering the strategic communications requirements of the brand. Traditionally this was the creative agency and often the media agency, but as channels diversify and strategies diversify and the requirements of brands change this could be any number of suppliers increasingly including Public Relations, Digital including SEM and Social Media and Retail and Channel Activation.
Specialists are usually those suppliers who have specific skills required to extend the communications strategy to their specific skill or channel. Again, this could be Public Relations, Digital including SEM and Social Media and Retail and Channel Activation. But it can increasingly be Media Agencies where they are simply planning and buying the media or creative agencies where their function is design and production of the communications material.
General or Simple suppliers are those who are offering an increasingly commoditised functional role such as mail house, print management, premiums and merchandise. They have almost no strategic input to the brand communications strategy and their strategic input into their specific channel or skill set is also minimal or non-existent.
The RFP is the ideal way to select a general or simple supplier. The commoditising effect the RFX process creates is well suited to selecting or buying a commoditised offering.
It can be used for selecting specialist suppliers, but only if heavily customised and weighted to the specific services required from those specialists. The problem is that often the RFX format is set with only minimal customisation and so is poor in sorting the diamonds from the dirt for specific specialist services. (Also the onerous nature of completing most RFX forms means that the more successful and in-demand suppliers cannot be bothered participating)
With Strategic Suppliers, and to a lesser extent but still importantly Specialists, the real failing of the RFX is that it overlooks an important selection criteria, which is cultural alignment and chemistry.
How can you assess chemistry in an RFX?
We use a three stage filtering and qualification process:
- A less onerous RFI stage to test capabilities, expertise and capacity and a face-to-face meeting to also initially screen chemistry
- A strategic workshop to test collaboration, chemistry and strategic ability
- Financial and resource proposal, negotiation and contract appointment
The strategy workshops are the most important as it is here that the marketers obtain the most insight into each of the agencies and often this is where the selection process is completed.
The RFX has a place in procurement and even marketing procurement in selecting more commoditised and generalised services. But for selecting strategic and specialist suppliers, it could be that marketers are ending up with the one that survives the process, rather than the right one for their martketing needs.
What do you think? Leave a comment here and let me know.