During our recent discussion, the Next Level Purchasing (NLP) team shared the demographic breakdown of members and their general audience. The majority (roughly 70%) are at the manager level or below. However, NLP does have a decent share of executive practitioners, either at the director, VP or CPO level (just over 10%). To better serve its target market of training the entry-level or managerial procurement professional, NLP has its sights on pursuing both corporate sales (a top down approach) and also continuing to push its bottoms up marketing through a range of content vehicles -- newsletters, free teaser course information highlights, testimonials, etc.
For corporate marketing and solution portfolios, NLP is adding additional capabilities, including on-site seminars, an area that they believe is a prime opportunity for growth. Curiously, on-site training was (and is, under ISM) a major focus for ADR. Whether it's teaching procurement teams the latest in negotiation strategy and focus or more fundamental elements of total cost modeling/management, supplier performance monitoring and key KPIs or contracting strategies, it seems that with the addition of NLP, the on-site procurement training industry will be gaining another credentialed provider capable of delivering the learning goods. Yet NLP will be entered an already somewhat crowded market space with dozens of little firms in the US alone, not to mention ISM to contend with.
Next Level Purchasing is also planning its first event/conference in 2013. There's no doubt that Charles Dominick and his team are aware of the benefits of driving community for ISM through its events, especially its large annual gathering each spring. Yet NLP will have a different challenge than ISM as it attempts to bring its constituents, members and students together -- namely that the bulk of its followers are from outside the US. While this may be an ultimate strength as NLP positions itself in training and certification on a global basis while slower moving non-profits and chartered institutes (ISM and CIPS) pursue the same global markets at a more bureaucratic basic, for a domestic state-side event, driving attendance to levels where there is critical mass may not be as simple as they are hoping (we speak from our own experience in this capacity, not just in observing other events).
We should also not underestimate the volunteer aspect of ISM and how this drives attendance among active participants and members as well as providing for an army of free volunteers. Indeed, the more NLP becomes less of a training and "push" publishing model to its members and the more its audience begins to contribute and participate in a two-way exchange as a core model, the more successful its events will be.
NLP clearly is doing several things right. Their email list (they count anyone who has signed up for materials as a member, but we think this is stretching the fair definition) is 245,000 "members." That's a lot, even if the list isn't exactly comprised of members in the same sense as ISM or CIPS. Those who sign up for the free membership receive an online magazine, newsletters (some of which are really quite good), access to one free "express" course and monthly webinars. Of these members, nearly 1,200 hold an actual NLP certification. As of June 2012, 1,190 hold the SPSM certification and 36 hold the SPSM2 certification. Surprisingly, those who hold the certification come from 77 countries -- an extremely diverse global list given the relatively small number of overall holders.
Yet passing the SPSM and SPSM2 is not a walk in the procurement park. 68% and 60% pass, respectively, on their first attempt. These numbers rise to 80% or higher for subsequent attempts. Clearly this is not a CFA-like certification process that's taking place over three years in which Harvard MBAs still fail. But it's not like applying for Who's-Who and writing a check, either. From a salary perspective, NLP's own research suggests that those who hold the SPSM certification earn $21,151 more per year than those who do not have a purchasing certification (and those who hold the SPSM certification, by NLP's own data, earn $16,942 more per year than those who have earned a purchasing certification other than the SPSM). We would suspect similar or higher numbers from other certifying authorities in the sector for a number of reasons:
- Those applying for certifications tend to be more motivated (on the individual basis) than those who do not, in terms of both career progression and pragmatic learning to drive greater on-the-job effectiveness
- Employers willing to invest in certifications are likely to place a greater emphasis on attracting and rewarding talent that is stronger than average
- Any type of designation with at least a modest reputation, especially for more junior buyers, analysts and managers without an advanced and/or four-year degree, is likely to help them stand out from peers in an industry where certification penetration is still very low (especially relative, for example, to the CPA designation)
Stay tuned as we continue our series on Next Level Purchasing.