Because marketers sit on the opposite side of the purchasing table, there’s a lot procurement teams can learn from them.
They know what it takes to win over prospects and turn them into customers and even raving fans … and the same tactics they use with prospects can help you better manage vendor relationships.
(Learn how RFP360 can help you improve procurement and supplier relationship management at your organization.)
What can procurement teams learn from marketers?
Marketing has undergone a revolution in recent years. New methods including inbound marketing and content marketing create a system where prospects actually seek out branded information (thereby warming them up for the sales team).
The idea is that by providing valuable, relevant content, prospects will develop an interest in the brand and view them as an authority in their industry.
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 teams learn from this mentality … because too many organizations treat vendors as disposable providers, rather than as partners worth investing in.
4 secrets inbound marketing can teach you about building effective long-term partnerships
First, why do we need to invest and think long term? What’s wrong with disposable vendors? As it turns out, it’s actually cheaper to keep a vendor. It’s also easier, and it’s more effective.
It’s cheaper and easier because finding new suppliers for every project is time-consuming. It means your team has to issue new requests for proposals (RFPs) and spend hours finding and evaluating vendors.
Constantly engaging new suppliers also means you’re continually working from ground zero.
They don’t know your business. They don’t understand your unique needs. There’s no established trust or rapport to buffer the inevitable problems.
The tried-and-true saying — it’s easier to keep a customer than find a new one — also applies to your vendor partnerships.
Work with your current vendors to find ways to reduce costs and improve value. But make sure to find ways to make their lives easier, too. Supplier relationships are a two-way street.
Marketers have a term for nameless emails, mass cold calls, and boilerplate content: Spray and pray.
It’s a method based on sending your message to as many people as possible and hoping you get results. As you might expect, it’s not particularly effective.
Marketing metrics and analytics agree that generic messaging just doesn’t work.
What does work is targeted marketing. By defining and understanding your audience, you can deliver the most impactful messages to the right people at the right time.
Keeping your messaging relevant and timely also keeps your audience engaged. The same applies to procurement. If your RFP questions are specific and relevant, the right vendors are more likely to identify a good fit and respond. In turn, you’ll get fewer, but higher quality, responses. Segmented questions also set you up for successful weighted scoring and clearer comparisons.
Bottom line: People don’t engage with generic messaging. If you want to identify and select better vendors, you need to create relevant RFPs that target right-fit suppliers.
The linchpin of inbound marketing is offering genuinely helpful content (insightful blogs, secrets-of-the-industry guides, webinars, etc.) that make prospects’ lives easier. Content isn’t created to serve as a sales pitch, and it should be helpful regardless of whether the reader is interested in buying.
It may seem like a selfless approach, but it’s highly profitable.
Consider a scene from the classic film Miracle on 34th street. The Cole’s Mall Santa is advising parents to purchase their children’s Christmas gifts at competing department stores because they’re cheaper than the mall he works for.
Terrible business model, right? One mother disagrees: “Tell your Santa he made a Cole’s shopper outta me. I’m coming here for everything but toilet paper and bananas. Any store that puts the parent ahead of the almighty buck at Christmas deserves my business.”
We need to invest in our vendor relationships first because they’re our allies and helping them encourages long-term beneficial partnerships, built on trust and loyalty.
In the final stages of the inbound marketing process, the business development team reaches out to prospects who have expressed interest in learning more about the company. Instead of approaching this as a sales opportunity, business development reps are encouraged to take a consultative approach, partnering with the prospect to understand and better address their needs.
Supplier relationship management can benefit from a similar approach.
According to Jonathan Webb, head of strategy research at Procurement Leaders:
“The purpose of [vendor] relationships is to build an effective, long-term relationship. As such, buyers must communicate with the suppliers on the basis of an equal partnership. Threats, aggression, and negotiation stunts will likely undermine the degree of supplier trust into the relationship. Consider, rather, the supplier, as an extension of the internal organization and therefore subject to the professional respect afforded to co-workers.”
Find ways to strategically partner with your vendor. Consider allowing them to conduct an on-site visit. Participate in their research efforts. Sign up to beta test new technology.
Your involvement will provide them with much-needed insight, while giving you a larger voice in the development of their products and services.
How RFP360 can help
RFP360’s full-circle RFP management solution empowers organizations to streamline the RFP process so they can focus on selecting the right supplier and forming mutually beneficial relationships.
“RFP360 helps us automate and focus on core business. Now, we can categorize, search, and profile providers, which helps us understand who would be the most appropriate vendors to invite to a particular RFP,” said Mark Rieder, SVP of HR technologies and benefits administration at NFP. “We’re shortlisting faster, and we’re being a true partner to our vendors. It’s a win-win.”