Marketing departments in large organizations are under constant pressure to become more and more creative with the printed collateral they develop to promote their company's products and brand. However, the latest materials and formats can be very expensive, and efficient spending is not always top priority to marketing managers. In their view, branding is critical to a company's success and cost overruns are a necessary evil to drive market share. But this doesn't have to be the case. With the right spend management processes and tools in place, marketing professionals can control these costs while maintaining supplier relationships and improving the quality of the printed materials they produce.
Make no mistake: Sourcing printing services for marketing materials is not as straightforward as purchasing supplies; it often involves last-minute changes, alternative specifications, paper options and a myriad of other variables. As a result, it can be difficult to apply standard market basket e-sourcing approaches. Difficult, but not impossible. With a sound spend management strategy and the technology, expertise and services to drive it, companies can source marketing spend as effectively as direct materials.
The first step in implementing cost control measures is educating employees throughout the organization who may be unfamiliar with strategic spending principles. Outside of procurement, most employees typically do not understand cost structures or the effects of sub-optimal ordering, slow lead times, missed press dates, over-ordering, obsolescence, storage and errors.
Marketing, for instance, may take a dim view of commercial print cost reductions when compared to the value of the actual printed materials and the direct sales they may generate. In their mind, while highly leveraged negotiations such as online sourcing events may generate savings, they may ultimately damage vendor relationships.
In addition, as a driving, creative force (as well as a cost driver itself), marketing may also think that savings, while important to budgets, should be treated as a priority but not to the extent that it may overwhelm creative efforts or impact expected campaign ROI. The truth is that all marketing requirements are reachable and sustainable through spend management.
Marketing Print Is Addressable
Contrary to popular opinion, effective print sourcing does not have to impede the value marketing brings to organizations. In fact, it can enhance their efforts by:
- Re-pricing and aggregating vendors
- Redefining specifications
- Formalizing static "rate" card processes and tying them to contract compliance
- Increasing collaboration
The key to successfully sourcing print spend lies in an integrated approach that addresses the unique requirements and concerns of all key stakeholders. The first step in creating such an approach is to adapt traditional strategic sourcing strategies and tactics to account for the nuances of marketing print services. This step includes driving a process through which all stakeholders can communicate their needs and make the trade-offs necessary to create savings without sacrificing quality.
Then, technology and best practices are applied to make the process standard and repeatable.
How might such a process work? A typical marketing print project may have the following material requirements:
- 11"x17" folding to 8.5"x11", upright
- 80# Something Litho Gloss, self cover
- Saddle Stitched
- 36 pages, bleeds on all sides
- 4/4, all process inks, 50 percent ink coverage
- 5,000 (quantity)
In sourcing the work, marketing may look at similar assignments or this assignment's last price as a benchmark, and then obtain bids. But what happens if there is a sudden change in one or more of the core elements such as quantity, ink, page count, folding, size, bleeds, timing, cover stock or any other specifications?
Suppliers may respond through rapid re-quoting or trying to apply a standard "rate card" approach. But does the rate card address all of these variables and their impact on each other? Often they will not account for lower or higher quantity orders, use of print-on demand, compressed time, shipping issues, new folds, samples, multiple proofs, product ink-matches, digital asset substitutions, variable print feature add-ons, additional ink or coatings, or even an overall size change.
By applying a spend management program specifically designed for print spend, companies can head off these issues and facilitate responses that drive fast savings and measurable ROI without negatively impacting either quality or supplier relationships. Such a program takes into account all prior, current and future requirements, as well as the following highly-integrated and inter-dependent components:
- Pre-press requirements
- Production re-quirements
- Post-press re-quirements
- Estimating and ordering
- Campaign management
- Tracking and planning
- Purchase/change order and invoicing
Leveraging spend management solutions that combine technology, commodity expertise and services, companies can effectively outline these requirements, compare suppliers based on unique characteristics and make optimal sourcing decisions more quickly and efficiently than ever before.
With the right spend management strategy and solutions in place, companies can gain clear visibility into their marketing spend to determine areas in which they could be saving. They can identify qualified global suppliers who can meet and deliver on their unique requirements from both a quality and cost standpoint. They can access commodity expertise and market knowledge to determine the most optimal time and structure for negotiations. And they can quickly and efficiently collect bids in a matter of hours through online markets and optimize these bids to arrive at the lowest total cost. Once contracts have been negotiated, they can manage them to ensure compliance and streamline the invoice and payment.
Marketing may still ask, "why should we leverage spend management?" But the real question is, "why not?"
About the Author: Steve Sussman is a director with Ariba, Inc., a global provider of spend management solutions. www.ariba.com