Buyers Need To Be Better Sellers

We are pleased to welcome this guest post from Ian Fishwick, SME and Commercial Director of Trade Association, Innopsis, with advice on how and why to market the procurement function. Innopsis aims to bring together the collective strength of suppliers to change the marketplace and provide better public services.

The one thing Public Sector Purchasing bodies have in common is that they are better at purchasing than marketing themselves and the services of suppliers.

There are a number of different Public Sector Procurement bodies around the UK covering different sectors of the market. Some are large with an extensive reach, some are small - dealing with procurement for a wide range of services for a small number of public sector organisations, but they all have the same trait. They don't sell well.

Generally, across the different suppliers I talk to, we strongly support the use of procurement frameworks, as they can be much cheaper to respond to than a myriad of individual tenders. However, there is no point in a supplier spending a lot of money to get onto a framework if the buying community is not then aware of the framework and does not use it.

Depending on the hoops that need to be jumped and the size of the supplier, a framework submission can cost from £10,000 to £300,000, without examining the extremes.  Therefore, to balance the cost, there needs to be a reasonable level of revenue returned to cover the cost.

Every buying organisation should have a marketing team

We regularly see purchasing teams trying to work out how to promote their frameworks when they have no budget to do so. This seems madness to industry. We would never dream of spending a lot of money on product development and then allocating no money to trying to sell that product once we have it.

Promoting a framework should be a standard part of the process with budgets allocated up front and stated in the tender documentation. Every framework should have a clear (relatively standardised) marketing plan stated within the tender documentation.

We have to get away from a situation where we are trying to reinvent the wheel every time a framework is launched and suppliers need to know that the budget will not vaporise or be re-allocated once the framework is awarded.

Information is the life-blood of business

In order to be able to encourage more suppliers into supplying the public sector, we need to demonstrate Value for Money. The process of competing for a place needs to show a return in terms of business won via the framework. We are all aware of the wide unrealistic banding that frameworks claim initially, however, regular reporting to show the value and type of business booked using the framework and intending to be awarded via the framework will only encourage suppliers to bid and to bid with their best prices. The alternative is only those suppliers with deep pockets will remain. Smaller suppliers, the ones that are being encouraged to do more business with the public sector, will not be able to sustain the framework cycles.

I would like to see a framework target being published and achievement against that target each quarter. Let's be honest, if something isn't working, let's fix it and not go on pretending its great. In most cases, it will be good news, so let's share it.

The G-Cloud series of frameworks has shown the way in this regard. It has consistently released figures - we want to see all frameworks providing the same or better information. This will help suppliers understand where their resources should go.

Awarding a Framework is only the start

Innovation in framework design is to be encouraged. Changes that make it easier and faster to do business safely, should be adopted across the sector. However, the changes are pointless if the public sector procurements carry on and ignore those changes.

If I introduce a new process into my company, I need to make sure that everyone understands the new process, why it's been put in place, what the benefits are and I need to monitor to ensure it is being adopted. If not, the change won’t happen or, even worse, my staff will try to make the new process work like the old process and something will break.

When a new framework comes onto the scene, I would like to see it mandated that all relevant public sector procurement people attend a workshop where the new framework can be described and the benefits explained plus explaining where the framework fits in with other related frameworks. The people leaving should know how they use the framework and where they would use the framework. This would save the public sector a substantial amount of money each year.

Venues for promoting and marketing frameworks

Trying to get procurement people together to explain frameworks is another issue. The public sector, as a whole, has a significant number of venues around the country that could be made available for use so that buyers can meet the framework owners and sellers and understand how that framework operates.  So, why can't they be used? Why are the public sector spending money to rent commercial premises rather than using facilities, paid for by the public, which are lying around unused?

The often used method is for suppliers to pay for venues. Usually this is in the form of allowing suppliers to turn up with a pop-up stand and stand in a room waiting for public sector buyers to run the gauntlet of suppliers in order to get refreshments. This is no way to encourage sensible relationships.

ROI

When suppliers pay, they need to show a Return on Investment. Thus the more it costs to join a framework, the more money that is needed to promote a framework, the greater the volume of business is required or the higher the price charged for that framework. If the volume or price is not achieved, then it doesn't make sense to return.

Suppliers do not sell to the public sector for altruistic reasons, they sell to make money. If they don't, they go bust or move to other markets. It's in your interest to think like a Supplier.

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