AAAA Webinar Series The Procurement Perspective

AAAA Webinar Series The Procurement Perspective

J. Francisco EscobarJ. Francisco EscobarJ. Francisco EscobarCall #: 616.883.8055 Access Code: 151.569.633

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J. Francisco EscobarJ. Francisco Escobar

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AgendaAgenda

IntroductionIntroductionMarketing Services Industry Trends Marketing Services Industry Trends Evolution of Corporate ProcurementEvolution of Corporate ProcurementProcurement Best and Worst Practices Procurement Best and Worst Practices Core Procurement TypesCore Procurement TypesGetting to Value Based Getting to Value Based ---- JFEJFE’’s Top Tens Top TenAgency Cost Modeling / BenchmarkingAgency Cost Modeling / BenchmarkingProcess / Relationship Stewardship ModelsProcess / Relationship Stewardship ModelsNegotiating TacticsNegotiating Tactics

44

Marketing Services Industry TrendsMarketing Services Industry Trends

Greater Variety of Client Orgs Involved in RelationshipsGreater Variety of Client Orgs Involved in Relationships

No Predominant Method of Managing CompensationNo Predominant Method of Managing Compensation

Significant Move to LaborSignificant Move to Labor--Based Fees ContinuesBased Fees Continues

Advertisers / Agencies Deviate on Advertisers / Agencies Deviate on ““AcceptableAcceptable”” Profit Profit

Use of Industry Benchmarking more PrevalentUse of Industry Benchmarking more Prevalent

Fee Negotiations Becoming Shorter in TermFee Negotiations Becoming Shorter in Term

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Marketing Services Industry Trends Marketing Services Industry Trends

Increasing Use and Success of Performance IncentivesIncreasing Use and Success of Performance Incentives

Contractual / Electronic RFPs more CommonplaceContractual / Electronic RFPs more Commonplace

AgencyAgency--Provided Cost Information More DetailedProvided Cost Information More Detailed

More Focus on Efficiencies (e.g. Production Decoupling) More Focus on Efficiencies (e.g. Production Decoupling)

Agency Financial Audits by Clients Creeping Back UpAgency Financial Audits by Clients Creeping Back Up

Major US Associations Publish Compensation GuideMajor US Associations Publish Compensation Guide

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35%30%

74%70%

10%

53%

0%12%

16%

0%

50%

100%

1985 1994 2003

Spend Fee Other

Evolution of Agency Pricing ModelsEvolution of Agency Pricing Models

AGENCY COMPENSATION TRENDS (source - ANA)

SpendSpend--Based Based LaborLabor--Based Based ValueValue--BasedBased

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Toward Strategic ProcurementToward Strategic Procurement

1)1) Many SourcesMany Sources2)2) Adversarial Adversarial

RelationshipsRelationships3)3) Inspection and Inspection and

Verification Verification 4)4) Price / Cost Price / Cost

EmphasisEmphasis5)5) Mostly Local Mostly Local

SourcingSourcing6)6) Purchasing Reacts, Purchasing Reacts,

Customers DistantCustomers Distant7)7) Paper Information Paper Information

InterchangeInterchange8)8) Process ArbitraryProcess Arbitrary

1)1) Fewer SourcesFewer Sources2)2) Suppliers are WhatSuppliers are What

You Make ThemYou Make Them3)3) Good Measures of Good Measures of

Supplier PerformanceSupplier Performance4)4) Quality / Delivery Quality / Delivery

EmphasisEmphasis5)5) Growing Global Growing Global

SourcingSourcing6)6) Increasing Teamwork Increasing Teamwork

Among Purchasing and Among Purchasing and other Internal Functionsother Internal Functions

7)7) Some Electronic DataSome Electronic Data8)8) Process ComplexProcess Complex

1)1) Minimum SourcesMinimum Sources2)2) LongLong--Term Supplier Term Supplier

Teamwork / InvolvementTeamwork / Involvement3)3) Total Cost of Ownership Total Cost of Ownership

and Six Sigmaand Six Sigma4)4) Continuous Improvement Continuous Improvement

EmphasisEmphasis5)5) Extensive Global Extensive Global

Sourcing Sourcing 6)6) Categories Managed by Categories Managed by

Multifunctional TeamsMultifunctional Teams7)7) Electronic Central Electronic Central

Nervous SystemNervous System8)8) Process SimplifiedProcess Simplified

Old WayOld Way 1970s1970s

TransitionTransition 1980s 1980s –– Mid 1990sMid 1990s

PresentPresent Late 1990s and BeyondLate 1990s and Beyond

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Supply Chain SegmentationSupply Chain Segmentation

Direct Materials / Services (Commodity Suppliers)

Direct Materials / Services (Commodity Suppliers)

Indirect Materials / Services (Low-Dollar Acquisitions – “Vendors”)

Indirect Materials / Services (Low-Dollar Acquisitions – “Vendors”)

Strategic or Technology

Alliances (Partners)

Strategic or Technology

Alliances (Partners)

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Supply Chain SegmentationSupply Chain Segmentation

Relative Spend for ServicesLow High

Supplier BusinessImpact

Low

HighCRITICAL

SUPPLIERSSTRATEGIC PARTNERS

UNDIFFERENTIATED SUPPLIERS

COMMODITY VENDORS

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Procurement StrategiesProcurement Strategies

Relative Spend for ServicesLow High

Supplier BusinessImpact

Low

High • Longer term contracts• Obtain price guarantees• Quality/delivery emphasis• Basic performance metrics• Shared Business Processes

• Development of alliances• Risk / reward remuneration• Ensure supplier viability• Performance stewardship • Continuous process improvements

• Minimize involvement• Select solely on price• Empower end-users• Bundle services• Automate processes

• Limit term of contract• Seek volume discounts• Negotiate aggressively• Identify multiple sources• Improve working processes

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Polling Question #1 Polling Question #1

Procurement's key careProcurement's key care--aboutsabouts are: (Select only one)are: (Select only one)

Cost & TransparencyCost & TransparencyQuality execution & onQuality execution & on--time deliverytime deliverySupplier development & productivitySupplier development & productivityBeing viewed as a valueBeing viewed as a value--added team memberadded team member

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Procurement Key Care-AboutsProcurement Key Care-Abouts

Optimal Mix: Optimal Mix: QualityQuality –– ServiceService –– PricePrice::

Defensible cost savingsDefensible cost savings

OnOn--time service delivery / completiontime service delivery / completion

Quality with flawless executionQuality with flawless execution

CustomerCustomer--focused: internal & external stakeholdersfocused: internal & external stakeholders

Financial transparencyFinancial transparency

Supplier diversity initiativesSupplier diversity initiatives

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Procurement Key Care-AboutsProcurement Key Care-Abouts

Contract termsContract terms

Cost / compensationCost / compensation

Educated stakeholdersEducated stakeholders

Productivity Productivity ---- Continuous ImprovementContinuous Improvement

. . .. . . To be viewed as a WELCOMED, VALUETo be viewed as a WELCOMED, VALUE--ADDED ADDED TEAM MEMBER in the agency / client mixTEAM MEMBER in the agency / client mix

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Procurement’s Role in Value CreationProcurement’s Role in Value Creation

SimpleSimple ABCABC::

AAligned with overall company and ligned with overall company and stakeholder objectives; usingstakeholder objectives; using

BBestest--inin--class suppliers and service class suppliers and service providers; for a clear and providers; for a clear and measurablemeasurable

CCompetitive advantageompetitive advantage

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Total Cost of OwnershipTotal Cost of Ownership

““PRICEPRICE ConsciousConscious””selection based upon selection based upon

lowest price lowest price

““VALUE VALUE ConsciousConscious””selection based upon best selection based upon best

overall perceived value overall perceived value ((including value of relationshipincluding value of relationship) )

versus

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Supply Chain ContinuumSupply Chain Continuum

CostCostOnOn--time Supplytime SupplyQualityQuality

QualityQualityService DeliveryService DeliveryCostCost

Lowest Cost ProvidersLowest Cost Providers Best Value ProvidersBest Value Providers

Cost (Manufacturing) Cost (Manufacturing)

General ProcurementGeneral Procurement

Revenue (Marketing Services) Revenue (Marketing Services)

Value for $ ProcurementValue for $ Procurement

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Procurement

A Discipline by Many NamesA Discipline by Many Names

Strategic or “Smart” Sourcing

Business / Marketing Services

Supplier / Supply Chain Management

Marketing Development Organization

Strategic Relationship Optimization

Purchasing

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Procurement Best PracticesProcurement Best Practices

Assesses reasonableness of service providerAssesses reasonableness of service provider’’s costs cost

Demonstrates valueDemonstrates value--add to managementadd to management

Promotes stewardship and onPromotes stewardship and on--going dialoguegoing dialogue

Integrators of demand and supply chainsIntegrators of demand and supply chains

Ambassadors of ethical behavior Ambassadors of ethical behavior

Positive and constructive manipulation of ALL partiesPositive and constructive manipulation of ALL parties

Demand fairness and equity Demand fairness and equity –– ““QUID PRO QUOQUID PRO QUO””

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Procurement Best PracticesProcurement Best Practices

ContinuousContinuous ImprovementImprovement

TotalTotal Cost of Cost of

OwnershipOwnership

MinimumMinimum SourcesSources

TeamworkTeamworkEarlyEarly InvolvementInvolvement

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Procurement Myths versus Reality Procurement Myths versus Reality

MythMyth

-- Procurement canProcurement can’’t help me, t help me, II’’m the expertm the expert

-- Procurement will make me Procurement will make me use an agency I donuse an agency I don’’t wantt want

-- My agencies donMy agencies don’’t want to t want to deal with Procurementdeal with Procurement

-- Procurement will slow the Procurement will slow the process down process down

-- Procurement cuts the budgetProcurement cuts the budget

-- Procurement canProcurement can’’t evaluate t evaluate creativecreative

RealityReality

-- YouYou’’re the marketing expert, re the marketing expert, but they can still add valuebut they can still add value

-- They will make sure the They will make sure the selected agency is justifiableselected agency is justifiable

-- Agencies prefer the unbiased Agencies prefer the unbiased approach they bringapproach they bring

-- They will find more process They will find more process inefficiencies than they createinefficiencies than they create

-- They wonThey won’’t (but finance might)t (but finance might)

-- OK, this one might be true, but OK, this one might be true, but they can help they can help ‘‘valuevalue’’ itit

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Procurement Worst PracticesProcurement Worst Practices

Cost is the only factorCost is the only factor

Not aligned with stakeholdersNot aligned with stakeholders’’ objectives objectives

Trying to tell an agency how to run their businessTrying to tell an agency how to run their business

Unknowledgeable about marketing services categoryUnknowledgeable about marketing services category

Inappropriate direct material sourcing practicesInappropriate direct material sourcing practices

WinWin--Lose contract terms / single term contractLose contract terms / single term contract

Treating strategic partner like a commodityTreating strategic partner like a commodity

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Core Procurement TypesCore Procurement Types

““The ObstacleThe Obstacle”” Box CheckerBox Checker

““RubberRubber--StamperStamper”” Amiable SimpletonAmiable Simpleton

““StrategicStrategic Relationship OptimizerRelationship Optimizer””

EnlightenedEnlightened ProcurementProcurement

““CostCost--CutterCutter”” Corporate HeroCorporate Hero

III.III.

I.I.

IV.IV.

II.II.

CONSULTANTSCONSULTANTS

AdversarialAdversarial RelationshipRelationship

Expe

rtis

eEx

pert

ise

Low

Low

Hig

hH

igh

PersonalityPersonality

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JFE’s TOP 10JFE’s TOP 10

10)10) Treat procurement like real people rather than Treat procurement like real people rather than viewing them as the enemy. Be inclusive.viewing them as the enemy. Be inclusive.

9)9) Identify and understand procurementIdentify and understand procurement’’s key cares key care-- abouts. Be open to audit and measurement. abouts. Be open to audit and measurement.

8)8) Meet in person Meet in person ---- DonDon’’t negotiate agreementst negotiate agreements purely over the phone or electronicallypurely over the phone or electronically

7)7) Ensure that pricing is 100% defensible. Ensure that pricing is 100% defensible. No No ““bait and switch.bait and switch.”” Single revenue stream. Single revenue stream.

6)6) Eliminate all mystery and inefficiencies Eliminate all mystery and inefficiencies in your business processesin your business processes

5)5) Represent your companyRepresent your company’’s interests s interests and position with convictionand position with conviction

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JFE’s TOP 10 (cont.)JFE’s TOP 10 (cont.)

4)4) Educate procurement about advertising/media Educate procurement about advertising/media services and industry norms. Be proactive.services and industry norms. Be proactive.

3)3) Elevate any inappropriate practices to client Elevate any inappropriate practices to client stakeholders or their senior management stakeholders or their senior management

2)2) Walk away from business/clients that don't mix with Walk away from business/clients that don't mix with your culture or overextend your range of fairnessyour culture or overextend your range of fairness

1)1) Focus on long term gains and strategies Focus on long term gains and strategies and always and always ““Play to WinPlay to Win--Win!Win!””

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Polling Question #2 Polling Question #2

When is the best time to talk about money with an existing When is the best time to talk about money with an existing client? (Select only one)client? (Select only one)

Up front Up front –– Need to frame expectationsNeed to frame expectationsAt the end At the end –– DonDon’’t prematurely negotiatet prematurely negotiateAfter discussing ValueAfter discussing Value

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JFE’s TOP 10 (cont.)JFE’s TOP 10 (cont.)

AAAA Seminar Special:AAAA Seminar Special: If at all possible, talk If at all possible, talk about money last. Donabout money last. Don’’t allow it to interfere t allow it to interfere with communicating your value.with communicating your value.

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Typical Agency Response ScenariosTypical Agency Response Scenarios

Fake ItFake It““The ImpostorsThe Impostors””

Borrow or Buy ItBorrow or Buy It““The OutsourcersThe Outsourcers””

Collaborate ItCollaborate It““The Team PlayersThe Team Players””

Make ItMake It““The CreatorsThe Creators””

III.III.

I.I.

IV.IV.

II.II.

LowLow HighHigh

Inno

vatio

nIn

nova

tion

Low

Low

Hig

hH

igh

Business SavvyBusiness Savvy

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Agency Financial ModelAgency Financial Model

PurchasingPurchasing AgentAgent

Professional Service

Professional Professional ServiceService

Commercial Enterprise

Commercial Commercial EnterpriseEnterprise

AgencyAgencyAgency

Direct (Client-Related)

Expense

DirectDirect (Client(Client--Related)Related)

ExpenseExpense

Indirect (Business-Related)

Expense

IndirectIndirect (Business(Business--Related)Related)

ExpenseExpense

Total Client CostTotal Client CostTotal Client Cost

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Agency ExpensesAgency Expenses

DIRECT (Client Related)DIRECT (Client Related)People RelatedPeople Related

Account ServiceAccount ServiceCreative / ProductionCreative / ProductionMediaMediaResearch Research Public RelationsPublic Relations

NonNon--People RelatedPeople RelatedMedia/Production PassMedia/Production Pass--thru thru Travel & Entertainment Travel & Entertainment Postage / DeliveryPostage / DeliveryTelephone / Fax Telephone / Fax

INDIRECT (Business Related)INDIRECT (Business Related)People RelatedPeople Related

Financial ManagementFinancial ManagementFacility ManagementFacility ManagementHuman ResourcesHuman ResourcesInformation ServicesInformation ServicesExecutive ManagementExecutive Management

NonNon--People RelatedPeople RelatedNew Business / GrowthNew Business / GrowthOccupancyOccupancyAdministrationAdministrationCost of MoneyCost of Money

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Agency CostAgency Cost

Salary Salary ** $50,000$50,000PayrollPayroll--Related Expenses (taxes + benefits) Related Expenses (taxes + benefits) ** 10,00010,000Total including Payroll Related ExpensesTotal including Payroll Related Expenses $60,000$60,000

Overhead @ 100% Overhead @ 100% ** 60,00060,000

Total CostTotal Cost $120,000$120,000

* For example only* For example only

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Agency TimeAgency Time

%% @ 1600 hrs/yr@ 1600 hrs/yr @ 1800 hrs/yr@ 1800 hrs/yr10%10% 160160 18018020%20% 320320 36036030%30% 480480 54054040%40% 640640 72072050%50% 800800 90090060%60% 960960 1080108070%70% 11201120 1260126080%80% 12801280 1440144090%90% 14401440 16201620100%100% 16001600 18001800

52 weeks x 35 hours52 weeks x 35 hours 1,8201,820Less: 6 weeks x 35 hoursLess: 6 weeks x 35 hours(vacation, holiday, sick leave)(vacation, holiday, sick leave) 210210Available hoursAvailable hours 1,6101,610

Available hours Available hours –– roundedrounded 1,6001,600

52 weeks x 40 hours52 weeks x 40 hours 2,0802,080Less: 6 weeks x 40 hoursLess: 6 weeks x 40 hours(vacation, holiday, sick leave)(vacation, holiday, sick leave) 240240Available hoursAvailable hours 1,8401,840

Available hours Available hours –– roundedrounded 1,8001,800

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Agency Cost Billing RatesAgency Cost Billing Rates

PurchasingPurchasing AgentAgent

Professional Service

Professional Professional ServiceService

Commercial Enterprise

Commercial Commercial EnterpriseEnterprise

AgencyAgencyAgency

Direct Expense (Client-Related)

$60,000

Direct ExpenseDirect Expense (Client(Client--Related)Related)

$$60,00060,000

Indirect Expense (Business-Related)

$60,000

Indirect ExpenseIndirect Expense (Business(Business--Related)Related)

$$60,00060,000

Total Client Cost$120,000

Total Client CostTotal Client Cost$$120,000120,000

$$120,000 / 1,600 hrs = 120,000 / 1,600 hrs = $$75.00 per hour75.00 per hour$$120,000 / 1,800 hrs = 120,000 / 1,800 hrs = $$66.67 per hour66.67 per hour

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Agency ProfitAgency Profit

Incentive Bonuses to Employees

Incentive Bonuses Incentive Bonuses to Employeesto Employees

Taxing EntitiesTaxing EntitiesTaxing Entities

Profit Retained by Owners

Profit Retained by Profit Retained by OwnersOwners

Profit Before TaxProfit Before TaxProfit Before Tax

Employee RetentionEmployee RetentionEmployee MindsetEmployee Mindset

Capital InvestmentCapital InvestmentFacilitiesFacilitiesTechnologyTechnology

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Agency Profit CalculationAgency Profit Calculation

Total CostTotal Cost $$120,000120,000ProfitProfit 17.65%17.65% 21,18021,180 15.00%15.00%TotalTotal $$141,180141,180

FEE % Amount %FEEFEE %% AmountAmount %%

MarkMark--up %up %(% of Total Cost)(% of Total Cost)

Agency ProfitAgency Profit(% of Total Cost + Profit)(% of Total Cost + Profit)

11.1111.11%% 1010%%17.6517.65%% 1515%%25.0025.00%% 2020%%33.3333.33%% 2525%%

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Polling Question #3 Polling Question #3

Which benchmarks are most relevant in a compensation Which benchmarks are most relevant in a compensation negotiation? (Select only one)negotiation? (Select only one)

Salaries & payroll related costsSalaries & payroll related costsOverheadOverheadProfit percentageProfit percentageAll of the aboveAll of the aboveNone of the aboveNone of the above

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Industry BenchmarkingIndustry Benchmarking

Cost Factors Subject to BenchmarkingCost Factors Subject to Benchmarking-- Salaries & PayrollSalaries & Payroll--Related ExpensesRelated Expenses-- Overhead RatioOverhead Ratio-- Profit PercentageProfit Percentage-- Available Hours per YearAvailable Hours per Year-- Media, Production & Other OOP PassMedia, Production & Other OOP Pass--ThruThru

Sources of Client Benchmark DataSources of Client Benchmark Data-- Client Owned from other RelationshipsClient Owned from other Relationships-- Client Generated with other CorporationsClient Generated with other Corporations-- Industry Associations and PublicationsIndustry Associations and Publications-- Compensation ConsultantsCompensation Consultants’’ DatabasesDatabases-- Internet Labor SitesInternet Labor Sites

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Process Management ModelProcess Management Model

Approval Approval and and

ClosureClosure

Agency Agency ExecutionExecution

Data Data GatheringGathering

and Sharingand Sharing

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Polling Question #4 Polling Question #4

Are any of your largest clients Are any of your largest clients ““decouplingdecoupling”” production production from creative development? (Select only one)from creative development? (Select only one)

YesYesNoNoNot yet, but it is being discussedNot yet, but it is being discussed

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Production DecouplingProduction Decoupling

Most recent trend in Most recent trend in ““next generationnext generation”” of driving efficienciesof driving efficienciesSeparate business production from creative developmentSeparate business production from creative developmentTake ownership of space traditionally managed by AgenciesTake ownership of space traditionally managed by AgenciesCentralize / manage certain categories of nonCentralize / manage certain categories of non--creative spendcreative spend

-- Print Production PrePrint Production Pre--presspress-- Talent Negotiations / Music LicensingTalent Negotiations / Music Licensing-- Digital asset management & distributionDigital asset management & distribution-- Transportation / Freight / TravelTransportation / Freight / Travel-- Potential Synergies across Client and Agency Supply BasePotential Synergies across Client and Agency Supply Base

Benefits include: centralized management/reporting process; Benefits include: centralized management/reporting process; global brand consistency; and leverage total spendglobal brand consistency; and leverage total spend

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PlannedPlanned RenegotiationRenegotiation

ChangeChange Factors or Factors or

““PinchPinch””

Review and Review and RenegotiationRenegotiation

Return to the Return to the way things way things used to beused to be

TerminationTermination

AnxietyAnxiety

UncertaintyUncertainty Disruption ofDisruption of Shared ExpectationsShared Expectations

Relationship Management ModelRelationship Management Model

Stability andStability and ProductivityProductivity

CommitmentCommitment (Role Definitions)(Role Definitions)

SharingSharing InformationInformation

andandNegotiating Negotiating

ExpectationsExpectations

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Enhanced Profitability ArrangementsEnhanced Profitability Arrangements

The The 3 T3 T’’s:s:

TTrust that Client allows the incentive to be rust that Client allows the incentive to be meaningful, engages in the process objectively, meaningful, engages in the process objectively, and budgets for the maximum payoutand budgets for the maximum payout

TTool in place that enables the parties to agree on ool in place that enables the parties to agree on all measurement objectives, capture quantifiable all measurement objectives, capture quantifiable metrics, and properly evaluate qualitative criteriametrics, and properly evaluate qualitative criteria

TTeamwork that ensures input from all engaged eamwork that ensures input from all engaged Client stakeholders, promotes bilateral dialogue, Client stakeholders, promotes bilateral dialogue, and provides collaborative involvement that and provides collaborative involvement that continually improve the processcontinually improve the process

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ANA / AAAA Compensation GuideANA / AAAA Compensation Guide

Joint industry task force mission was to eliminate Joint industry task force mission was to eliminate confusion, misunderstanding and conflict between confusion, misunderstanding and conflict between advertisers and agenciesadvertisers and agencies-- Established specific compensation guidelinesEstablished specific compensation guidelines-- Recommended fourRecommended four--step dialogue processstep dialogue process-- Suggested best practices to improve relationships Suggested best practices to improve relationships -- Established common set of definitions for Established common set of definitions for

components of agency cost and compensationcomponents of agency cost and compensation

Task force had significant agency representation and Task force had significant agency representation and the published guide is fully endorsed by major agency the published guide is fully endorsed by major agency executive management and finance communities.executive management and finance communities.

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TOP 10 Tactics for Effective NegotiationsTOP 10 Tactics for Effective Negotiations

10)10) In business, as in life, people who EXPECT more, In business, as in life, people who EXPECT more, ASK and DEMAND more, will GET moreASK and DEMAND more, will GET more

9)9) Negotiate in person, faceNegotiate in person, face--toto--face, matching face, matching numbers of attendees and functional rolesnumbers of attendees and functional roles

8)8) Make the best use of body language, reflecting Make the best use of body language, reflecting selfself--confidence and a winning attitudeconfidence and a winning attitude

7)7) Elevate the other partyElevate the other party’’s ego and be careful s ego and be careful NOT to lower their ego NOT to lower their ego

6)6) Talk about money last, initiating the dialogue Talk about money last, initiating the dialogue toward value, partnership and the meeting of toward value, partnership and the meeting of mutual expectations mutual expectations

5)5) Be stingy with concessionsBe stingy with concessions

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TOP 10 Tactics for Effective Negotiations TOP 10 Tactics for Effective Negotiations

4)4) SHUTSHUT--UP, or risk giving away negotiating powerUP, or risk giving away negotiating power3)3) Negotiate on your front foot by representing your Negotiate on your front foot by representing your

agencyagency’’s interests with convictions interests with conviction2)2) Say Say ““NONO”” one more time, just when you are ready one more time, just when you are ready

to concede a major negotiating pointto concede a major negotiating point1)1) Walking away, or demonstrating a willingness to Walking away, or demonstrating a willingness to

walk, can sometimes be the best course of action.walk, can sometimes be the best course of action.

AAAA Webinar Special:AAAA Webinar Special: Early in the discussions, be sure Early in the discussions, be sure to win a minor negotiating point, so that the other party to win a minor negotiating point, so that the other party understands your tenacity. From then on, ensure that understands your tenacity. From then on, ensure that you provide alternatives on major you provide alternatives on major ““stickingsticking”” points.points.

Q&AQ&A

J. Francisco Escobarfrancisco@jfeintl.com214-728-6903

J. Francisco EscobarJ. Francisco Escobarfrancisco@jfeintl.comfrancisco@jfeintl.com214214--728728--69036903

Thank You!Thank You!

4646

AAAA Business Development AAAA Business Development BlogBlog

www.AAAA.org/bizdevblogwww.AAAA.org/bizdevblog

4747

JFE BackgrounderJFE Backgrounder

20+ years client20+ years client--side experience in finance, marketing and side experience in finance, marketing and procurement management for a Fortune 100 advertiserprocurement management for a Fortune 100 advertiser

Consultancy founded in 2003 focusing on all aspects Consultancy founded in 2003 focusing on all aspects of proper agency / client relationship management of proper agency / client relationship management

Customer base includes marketing services providers, Customer base includes marketing services providers, major marketers and other intermediaries in the industrymajor marketers and other intermediaries in the industry

Under the auspices of the ANA, authored Marketing Under the auspices of the ANA, authored Marketing Communications Procurement Best Practices booklet Communications Procurement Best Practices booklet

Released industry White Paper on agency compensation Released industry White Paper on agency compensation best practices for the Council of PR Firms best practices for the Council of PR Firms ---- 20082008

4848

Ways to Utilize JFE as a ResourceWays to Utilize JFE as a Resource

Onsite training of agency personnel on dealing Onsite training of agency personnel on dealing effectively with Client Procurementeffectively with Client Procurement““BackroomBackroom”” consulting in preparation for consulting in preparation for discussions / meetings with Procurementdiscussions / meetings with ProcurementRecommendations on responding to RFI, RFP and Recommendations on responding to RFI, RFP and RFQs (particularly ProcurementRFQs (particularly Procurement--driven processes)driven processes)Review and provide input on new business pitches Review and provide input on new business pitches from a Client perspective and viewpointfrom a Client perspective and viewpointLive participation in presentations to existing or Live participation in presentations to existing or prospective clients as resident category expertprospective clients as resident category expert

4949

Ways to Utilize JFE (cont.)Ways to Utilize JFE (cont.)

HandsHands--on involvement in contractual and on involvement in contractual and compensation negotiationscompensation negotiationsAssist in scheduled contractual / compensation Assist in scheduled contractual / compensation renegotiations and relationship process reviewsrenegotiations and relationship process reviewsHelp develop and evaluate internal Agency Help develop and evaluate internal Agency processes that increase efficiencies to clientprocesses that increase efficiencies to clientProvide counsel on best practices, collaboration, Provide counsel on best practices, collaboration, and coordination across worldwide networksand coordination across worldwide networksBring consistency to Client interface when multiple Bring consistency to Client interface when multiple agencies or geographies are involvedagencies or geographies are involved