One Suppliers Strategy to Win New Business – Mildly Infuriating or Maximizing ROI?

Suppliers and Strategy

Suppliers should have a solid strategy when trying to obtain new business. It’s one thing to get your foot in the door, but it’s another to grow and expand within a company. Tough sometimes to accomplish, but it can be done.

If you have a well-thought-out strategy.

That’s why I’m having a really hard time understanding the strategy that I recently saw with a supplier. Thinking back on it still leaves me scratching my head.

Because if you haven’t yet expanded, the account is getting smaller, and you’re not winning any RFPs – why would you then decide to put your foot down, and make it even harder for you to win additional business?

From a procurement perspective, it seems that you’ve cut off your nose to spite your face. And that’s not beneficial for either of us if you are one of our preferred suppliers. We’re supposed to be helping you in your endeavors to expand, and you’ve just tied one of my hands behind my back.

Sophisticated or Senseless

Now to set the stage, what I’m talking about is clearly a choice. A thought-out internally discussed decision. It was deliberate, and there’s no way around it.  But to give you a little bit more information on the situation here’s some context.

When working in marketing and advertising, we deal with a lot of big personalities from suppliers to internal business partners. Therefore the requests that are made from the brand/marketer can be very specific regarding staff supporting their account.

You see, from the brand’s point of view, the team they are working with on the agency side can sometimes be seen as an extension of their internal brand team. And on both sides (brand and agency), there is a constant turnover of marketers or agency staff.

So you can only imagine, if you have a new marketing team lead, they may not get along with their “extended team” and thus the need for a different agency. Or they may just want new faces or ideas on the account.

Therefore, it’s not a big surprise that brand lead may come and ask for either a different agency but the same holding (parent) company. They want to cut ties with part or all of the existing team, but still want to keep their business with the larger holding company.

Or sometimes they have heard great reviews about another agency under the umbrella, and want to engage with them so they don’t get the “B” team from the incumbent agency. (Which was the case)

Most suppliers view this positively. Revenue isn’t lost if it’s still within the suppliers’ larger holding company’s roster. You’re just adding new business in a different part of the holding company. Not ideal for the incumbent, but still beneficial for the larger organization.  Therefore, holding companies are happy to oblige.

That is, until recently. Where they basically told us – No. Nope. No thanks. You either use the incumbent or you don’t work with anyone else under our holding company. Which really struck me as odd. How would this help them win new business?

Take it or Leave it

Don’t get me wrong, if a supplier is over a certain brand or company, then you might want to have the take or leave it attitude. But if you are trying to gain new business with new brands, maybe it’s not the best approach?

And clearly, that’s what I’m struggling with. There has been a lot of time and effort (and money) spent by the supplier, in the past to expand to win new business.  To throw all of that in the garbage at this point seems highly illogical. Especially when new business would still benefit the suppliers’ larger holding company.

Which begs the question – what really went on here?  Why is the supplier’s new business strategy so rigid? All agencies and holding companies are aware of the nuisances of the brand team relationship. Nothing is personal, but everyone has their preferences. Why would you now decide to take a “take it or leave it” stance and become inflexible in light of new business?

Now maybe I’m wrong. Maybe they took the request as a slap in the face. But why? This isn’t anything outside the norm. And it’s not the first time we’ve asked them to have a different agency pitch for the business.

Maybe I am wrong and they really do want to fire us. They figure they aren’t going to win new business regardless of the agency, so why waste any more time or money on the partnership. They just aren’t seeing the ROI.

No matter what the situation, it could have easily been communicated to the procurement partner without the brand’s knowledge. No harm in the approach. Business is business. At least we have the knowledge to support their strategy going forward.

I’ll say it again, procurement’s position is not only to help their internal customers but also to help grow their preferred suppliers. It is beneficial for our company to keep spend consolidated. And maybe it is the reason I find this mildly infuriating.

There are negative consequences to this strategy, and thus bringing me back to the beginning of this blog. As a supplier, why would you make winning new business an even harder endeavor than it already is?

Want to see the massive list of the agency holding companies and their subsidiaries?  Check it out here. Don’t worry, it’s only poster-sized and constantly changing.

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