Start A Conversation With Procurement

“I’m not happy until you’re not happy.” That was a purchasing agent’s actual opening line to me in a conversation.

He didn’t care that we were using his brand correctly and effectively, selecting merchandise appropriate to his message, delivering results and winning awards for his company. He gleefully dismissed my leave-behind gift, pointing to his merchandise collection as though they were trophies. He had met with lots of distributors. He didn’t need another mug, he told me.

And he was right. He didn’t need another mug. He needed to understand our industry’s value. But this was decades ago, when the purchasing department’s perception was that logoed goods were a commodity to be obtained as cheaply as possible.

Fast forward 20 years. Our name says “products,” right? So purchasing still perceives promotional products as a commodity to be obtained as cheaply as possible.

Order Takers Vs. Order Makers

My company, Tango Partners, interviewed a savvy strategic sourcing professional who confessed that he didn’t understand the distributor’s role until our meeting. He was unaware of our contributions in generating ideas, research, matching product to message, and the details inherent in delivering correctly. He was visibly surprised upon learning about the commitment and involvement of a promotional marketing partner.

Purchasing agents are generally not trained in our media category. They don’t consider logoed merchandise to be an effective marketing medium but as an expense to be contained. The common assumption is that their marketing departments generate all the creative ideas, and we’re the middlemen taking orders.

And that’s our fault. We’ve allowed ourselves to be intimidated by purchasing, preferring to avoid rather than engage them. It’s time to change the perceptions.

The procurement department is simply doing its job, which is to find ways to save money for the company. If we do our job, we can educate them that, similar to their advertising agency, our industry professionals can provide the following:

  • Create “briefs” to gather essential information
  • Develop programs and campaigns to fulfill expressed objectives
  • Focus on the message and influence the recipient to take a desired action
  • Deliver results for program objectives
  • Utilize branded merchandise as a communication/outreach medium
  • Provide return for the marketing budget investment
  • Recommend the right items and graphics to accomplish all of the above

Difference Between Cost And Price

No one haggles over the price of a new Jaguar. After all, there’s perceived value, a driving experience, prestige and the joy of being behind the wheel. We don’t question the cost of the tires, the steering wheel or the leather seats. We’re not interested in how the manufacturer could have cut costs to save money.

For that Jag or a special cruise or a meal in a gourmet restaurant, we don’t bargain. We pay the price for the value proposition inherent in the experience.

Since procurement agents view our category as a commodity, they neither understand nor place a value on the research, order details, creativity, touches and professionalism included in the price of a logoed item. Their strategy is to move from a price (value) negotiation to a cost negotiation. Once they’re talking cost, they can break down what’s involved: shipping, warehousing, fulfillment costs, packing, insurance and inbound and outbound freight. They’re focused on what goes into the cost of goods that can be eliminated to save money or reduce margins.

We must demonstrate the inherent value in our work. Forget the newest phone accessory; present complete programs or campaigns with real objectives and validated results. Our challenge is to establish the worth of:

  • creativity
  • problem solving
  • attention to detail
  • management of the order process
  • product quality and quality controls
  • accurate delivery
  • branded merchandise
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