Supplier evaluation and scoring of vendors by procurement teams is as tough as it comes. This is because of the nature of buys that happen. While it is relatively easy to evaluate and score suppliers for standardized marketing procurement items such as printing services, fabrication services, collateral production, the challenges come when one is buying a service rather than an item.
How do you do supplier evaluation of service vendors? Can price be the sole arbitrator between two different marketing suppliers? What parameters are to be considered while evaluating and scoring? How often should the marketing supplier be evaluated? Most organizations have an annual or a semi-annual vendor audit system in place. While this is perfectly fine for most vendor situation, it is woefully inadequate when it comes to supplier evaluation for marketing service vendors.
Marketing services vendors play an important role in the brand and marketing functions of an organization. They are in reality an extension of the marketing team and therefore need to as agile, proactive and sensitized to the marketing function as the marketing managers are. Just as marketing initiatives and campaigns are analyzed for performance effectiveness, so should the marketing supplier go through a process of self-evaluation and internal supplier evaluation process.
Constant innovation is the key to having a great marketing support system comprising of marketing services suppliers. As a marketing or procurement professionals, the following evaluation criteria could be used to set up a scoring system to evaluate an agency or an RFP
Price is one of the most fundamental evaluation metric in deciding whether to award a project or reject the agency. However price comparisons can be difficult without adequate domain knowledge. Tools like the Comparator will help create effective price comparison charts.
As important as price is, quality plays an equally important role when deciding who you want to work with. The nature of marketing is such that quality of delivery becomes critical in achieving marketing objectives. Good marketing suppliers continuously measure their own delivery quality. Having a balance between delivery quality and price makes for a good procurement practice
Marketing services is largely an idea or communication business whether it to be execute a digital or mass media campaign or an activation or event or retail merchandising. Your creative, messaging, concepts can make or break your campaign. A poor concept will end up doing nothing for the brand while a great idea can do wonders.
Evaluate the agency from the perspective of how good, bad or average their creative idea for the project execution has been.
Bear in mind, great ideas are not just creative concepts but also innovative solutions, better processes.
Marketing projects are typically time bound topical requirements. Agility of marketing intervention requires marketing suppliers who are equally agile in their executional capabilities. Understanding and evaluating existing marketing vendors and new ones from this perspective is critical to building a great marketing machine for the organization
A marketing supplier is only as good as the human resources he deploys. While organizations take great care in hiring the best brains for their marketing departments, sadly little emphasis is laid on evaluating the human resources within marketing vendor teams.
The ability of the account management person to take a client brief and convert that into an internal briefing and project document is crucial in getting the best out of an agency. Evaluate the account management team from this perspective to determine and give scores.
Supplier Evaluation Scoring
Scoring suppliers help in finding out the best fit project solutions for the different kind of procurement projects that organizations typically execute. In my earlier blog Marketing Procurement Challenges I highlighted the importance of creating marketing project buckets, i.e classifying the marketing buys into specific individual buckets.
Now using the buckets, one can evaluate suppliers to fill up the requisite buckets with the required number of vendors in each bucket. This will ensure that your RFP goes out to those who are best at their specific skill set score
The simplest method of supplier evaluation and scoring is the 5 point rating system that classifies each vendor on various performance requirements and then adding weightages to each parameter based on the skill requirement for a specific type of marketing project.
For instance if you’re trying to evaluate between outdoor suppliers for all your outdoor buys, a key parameter which would carry a higher weightage is obviously Delivery Quality, Delivery timelines and Creative Concepts. This is because outdoor buys are usually for a particular campaign which is topical in nature and hence needs to be executed fast (Delivery Timelines), you need innovations in your outdoor to make it stand out (creative concepts) and you need Delivery quality to ensure that your OOH creates a clutter breaking noise in the market. Using this matrix, managers can effectively evaluate the best fit service suppliers that meet the requirement.
However the real challenge that arises for indirect services procurement is that existing tools are inadequate to comprehensively address the need for supplier evaluation and scoring. Services buying require a constant system of evaluation which current procurement processes do not have. At best there is an annual supplier evaluation and scoring that is done by which time several suppliers may have caused damage due to faulty project execution.
What is needed desperately especially in marketing procurement is a system for continuous supplier evaluation and scoring mechanism. Doing this on a manual auto-mode across the organization’s various user departments is impractical. An automated process would best serve the user, procurement, supplier and organizational needs.
About the Author:
Rajesh Menon is the CEO of Agencyonnet, a B2B marketing procurement SaaS software designed keeping in mind the needs of modern agile organizations. Agencyonnet helps organizations automate the buying processes in marketing procurement and eliminates inefficiencies. He has been a marketing services buyer and seller for the past 25 years. He is available on LinkedIn and on Twitter at @aon_menon for advice and consulting on marketing procurement processes.