Ladbrokes Coral’s chief customer officer Kristof Fahy says the procurement team needs to understand that marketing is about more than “balloons and t-shirts” and should adopt shared KPIs so they can work closer together.
Speaking at the ProcureCon Marketing 2017 conference today (13 June), Fahy started his talk by admitting that he has not always been “a fan” of procurement. This is mainly due to the department taking a “lone ranger” approach.
“Procurement tend to do things on their own and won’t ask the marketing team [for their opinion]. There’s a lack of talking and conversation. We need to stop this lone ranger approach,” he said.
This strained working relationship is not only felt by marketers. A new report by Globality shows that only one quarter (26.7%) of procurement professionals say they have a ‘strategic’ relationship with their marketing team. Some 29% of marketers would characterise their relationship as ‘open’, while 14.3% describe it as ‘challenging’.
Marketing is not the balloons and t-shirts department. Understand what marketing is and what it does. Understand the challenges – and not just the everyday ones.
Kristof Fahy, Ladbrokes Coral
Fahy also believes the department should focus on more than just being “the cost police”, as it will “not help them to make friends” within a business.
“It doesn’t mean we want you to stop saving money, but it shouldn’t be the only KPI,” he added.
Fahy urged procurement directors to form “proper partnerships” with their marketing departments by embedding themselves within the team, and by understanding what their challenges are.
He explained: “Marketing is not the balloons and t-shirts department. Understand what marketing is and what it does. Understand the challenges – and not just the everyday ones, but also pressures from other departments. For example, finance will want to know what the ROI is [on our campaigns], and HR will talk to us about talent and development.”
Fahy encourages the procurement department to have shared KPIs, such as acquisition and retention targets, so that the team becomes aligned with marketers’ goals. He also believes the department needs to “be happy to be rated”.
“With every single project, you rate us and we’ll rate you. Let’s have a proper rating system, [with more] openness and transparency. I don’t think we currently do this, but we should be having these conversations in the same room,” he said.
Ultimately, Fahy believes the real opportunity for the procurement department is to help the marketing team “navigate the maze of opportunities”, pointing to the complex marketing technology landscape.
“Help us with issues of viewability; are my ads being seen? How can we reward media agencies? Are we getting ripped off? Bring me different models, views, don’t just give me the same stuff. [Procurement] should be on this like a rash. I want you to lead those conversations because I can’t, as I’ve got to look after KPIs, turnover, cost and acquisition.”
However, when an audience member questioned Fahy about Ladbrokes’ current relationship with its procurement team, he admitted there was still a way to go to improve their relationship, which he put down to the merger with Gala Coral, which is planned to go through this week.
He concluded: “What I did do was bring [the team] along with me, to show them the conversations I have. Hopefully we will get there, but at the moment if I rated it, I’d say it would be 6.5 out of 10. But to be fair, we’re in the middle of a merger.”