You're the Reason Our Kids Are Ugly

The Love-Hate Relationship Between Agencies and Purchasing Departments

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Phil Johnson Phil Johnson
Last week Jennifer Modarelli wrote an insightful and entertaining post for this blog in which she described with wonderful accuracy what the RFP process, when run by the purchasing department, feels like for an agency. There couldn't have been an agency manager who didn't cringe with recognition at the experience. Don't skip the comments, where agencies and a few clients face off against each other. Reading them gave me flashbacks to some of my own disheartening interactions with purchasing departments, and for a moment I considered getting treatment for post-traumatic stress syndrome. It's demeaning to think that the creative soul of your agency will be turned into a line item, forced into an ultimate fighting match with other line items on a spreadsheet.

The uneasy relationship between agencies and purchasing departments reminds me of the country duet sung by George Jones and Tammy Wynette, "You're the Reason Our Kids Are Ugly." Together, agencies and purchasing have created an antagonistic dynamic that drives each other crazy. The spoils will go to the agencies that figure out how to extricate themselves from this hellhole. Here are my opinions and strategies for making the purchasing relationship work.

Never enter a new business opportunity through the purchasing door, no matter who tries to sweet talk you into it. You absolutely need a relationship and advocate within the marketing department. If the prospective client tells you it's out of their hands, you just got blown off. Pack up and go home.

No matter what clients tell you, purchasing included, it's never solely about price. You can lose because you're the high bidder, but you can seldom win as the low bidder. Know what you're worth. Know what you need. Know what the market will bear. That knowledge should inform your pricing.

Regardless of what criteria purchasing puts in place, if somebody on the executive team wants you in, you're going to get in. Focus on proving your value to the people who need you the most. Purchasing seldom has the final word.

Agencies love to talk about their global capabilities, but we seldom learn to speak the two languages that can make a profound impact on our businesses: value pricing and per unit cost. We love to sell the allure of magic and mystique. We can speak eloquently about the transformative power of our services. Guess what: Purchasing people don't know what we're talking about. They want to know how much a banner costs. To be fair, that's not asking too much.

Purchasing may put up frustrating roadblocks when you're trying to win the business, but once you're on board, they're your new best friends. They're likely going to review your contracts and help define the success of the relationship. In most cases, they really do want to understand your business, and they probably would appreciate an invitation to visit the agency. This may sound like an urban legend, but the purchasing manager from a longtime client showed up one day with pizza for the whole office. And he didn't charge it back to us either.

Too often in this business, hope triumphs over reality. Agencies pursue opportunities where the odds of winning are about the same as a lottery ticket. Brent Hodgins, who writes a smart blog about agency new business, puts it bluntly in the title of a recent post: Why You'll Lose Your Next Pitch. Even if you're a successful agency, you're going to lose, and you're going to lose a lot. Just try not to lose more than 35% of the time.

To return to my country-music theme, let me quote Kenny Rogers:

"You got to know when to hold 'em, know when to fold 'em.
Know when to walk away, and know when to run."
That philosophy puts me in Jennifer Modarelli's camp. She knew just when to walk.

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You can follow Phil Johnson on Twitter: @philjohnson

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