How to Handle RFPs Like a Pro | Luka Erceg, GEP

The Brand Licensing Podcast

March 29, 2021

On this episode of The Brand Licensing Podcast podcast, we’re getting the inside scoop on RFPs with Luka Erceg of GEP.

About Our Guest

Luka has over 20 years of professional experience with over 14 years of procurement consulting.  

Luka leads GEP’s center of excellence for sourcing marketing and media firms and has been engaged with strategic sourcing projects across the marketing, customer engagement, and packaging categories. In his most recent engagement with a major beauty and cosmetics client, he led a team of eight associates to roll-out and run the eSourcing program and deliver synergies by developing an opportunity assessment and analysis.  

He is familiar with procurement and supply chain practices in consumer goods, automotive, and technology industries.  He has experience and worked in marketing, business development, and global strategy for the consumer-packaged goods industry. 

Luka holds an MBA from Kellogg School of Management, Northwestern and a B.A. in International Trade from University of Central Arkansas. 


Check out the full episode below, or tune in on Apple Podcasts or Spotify. Don’t forget to subscribe!

Episode Transcription

Emily Randles:

Luka, welcome to The Brand Licensing Podcast.

Luka Erceg:

My pleasure being here. Thank you for inviting us.

ER:

For our listeners today, Luka is the Senior Manager Consulting at GEP and he works with marketing and media firms, assisting them with sourcing projects across marketing, customer engagement and packaging. So before we get started, can you give us a rundown on your resume and background?

LE:

Absolutely. So my role at GEP is a Senior Consultant heading up client categories, or even overall programs. Prior to joining GEP, I have about 30 years of experience helping organizations either from the corporate or consulting side, as well as within procurement roles for marketing roles.

ER:

Great. So it sounds like you have your marketing and people skills collided, and you found yourself in procurement. For those not familiar with GEP. Can you give us a little bit of background on the company?

LE:

GEP is a 20-year firm focused on integrated sourcing procurement spend management and supply chain. We deliver all of this through software and managed services, outsourcing solutions for Fortune 500 firms. Some of our clients include companies like Catalogs, BMS, Cathay Pacific and Bayer.

ER:

Can you say a little bit more about the software piece of that and how you guys use software versus just strictly consulting to help your clients and vendors?

LE:

Absolutely. One thing that is sort of a pet peeve of mine is really a lot of big established companies still working off of spreadsheets or databases. Their documentation, I guess you can almost say, today, is archaic. But there are software programs out there such as GEP’s SMART that helps you manage your procurement projects, your whole procurement program. It’s your suppliers and spend, and they’re really just covering a lot of what you’re doing. And if you think about it, it’s really a way of managing and collecting this knowledge that you’re doing day to day for the whole procurement program through the year. Because if any of your teammates gets a promotion or he wins the lottery and moves off to an island, how do you now transfer all of this knowledge to the next person? Spreadsheets was one way and I’ve seen some really elaborate spreadsheets, but it really doesn’t do the same justice that a well-thought out program or software does. And that’s just trying to yourself and organize your program. And there’s the consulting side which takes it to another level of your procurement program maturing and moving up.

ER:

Yeah, I can imagine, too, that these data points; two things: one, helps you analyze them and use the data. I mean, you can have all the data you want in a spreadsheet, but if you’re not able to compare it easily or see it all, or kind of go back and reference that, it’s really not doing you much good in a spreadsheet. So I could see that being really beneficial to your clients in terms of really using the information that they have at their fingertips. And then the second thing is to your point about people going on vacation or changing roles. Just the person replacing them, not having to recreate the wheel and not figuring out how they formatted their spreadsheets and they can make heads or tails of it. And so just not using the historical information to be more informed and collect more data as you go, as opposed to recollecting the same data over and over again.

LE:     

Imagine if you go into the office of an executive in the business setting and you’re a new hire and you’re trying to replace somebody that’s been there before, and you’re coming up with ideas and solutions for that category that’s already been completed by your predecessor. You’re going to lose credibility with that executive at that company because he’s having to now educate you. Now we’ve done that already. No, we’ve addressed that the year before. So again, it’s that knowledge transfer. But it’s also then, like you said, understanding the data and where do I go next? Because procurement does evolve. The program evolves to where maybe in the beginning, you’re doing things like supply-based reduction or consolidations, and then picking out who the right suppliers are in the spend. But then you evolve where you’re working up on innovation. Maybe you’re even creating a brand new supply base of suppliers out there. And you’re working on many projects with your executives and the business. That’s where procurement does evolve and we start playing more of a strategic role in the company versus just being an administrative role.

ER:

Yeah, that makes a lot of sense. Going back to the data points when you’re collecting and working on projects with clients, do you guys share industry data or industry best practices based on everything that you’re collecting?

LE:

Definitely do ,from a couple of a bit of a different point of view. If you think about it, if let’s take marketing, for instance, the CMO and his direct reports know very well what’s going on in marketing and in that space. But we may bring it from a procurement point of view and seeing that maybe, we see production costs for commercials, TV production costs going up. Here are some alternatives that we see that are actually being brought so that during the pandemic, it wasn’t so much even costs. It was just how do I get a commercial out? And so procurement could step in and say, here’s some alternatives that suppliers are actually doing. So we can actually work together in finding a solution just to get something done. It doesn’t necessarily mean how we save money. The first thing you have to do with your stakeholders, align on what their goals and objectives are and how can procurement help them achieve that? And at no point, should you be using procurement language when you’re having that conversation. It’s a tough one. We always want to talk our own language, but you can’t go into a business setting, talking procurement language.

ER:

I could see that being really valuable to the executives and those, especially over the past year. I mean, wow.

Well, I wanted to have you on the podcast today because brands often execute RFPs to select a licensing agency or even sometimes a licensee. So today I wanted to cover what’s relevant to those in the licensing industry, specifically for brand owners, what they need to consider when executing an RFP and then for agents and licensees, kind of some best practices for participating in RFPs. So jumping in here, what are CPG companies looking for when selecting vendors?

LE:

From my experience with our clients, brand equity and reputation are very important to a brand. So when they’re selecting a partner, they really need to understand that the brand understands that there’s a good fit that they can express and grow with that brand. So if we’re talking to agencies or we’re talking to a different supplier in different areas, but that’s what they’re looking for in an RFP is are they a good fit with us? Do they understand what we’re trying to achieve and do? And can we grow together over time? Do they have the confidence that that partner is going to be around? And then there’s really old age thing that people work with who they like. So, is there a good fit? Can we work with them day to day?

ER:

Yeah. So on that note, ‘cause I think that is really important and something we look for when talking with potential clients is just having that connection with them and making sure that we’re on the same page and kind of styles of working and ways of working. But when we’re going through an RFP, typically our first step in the process is to fill out a bunch of questions on a form and submit that for review, or maybe even submitting a PowerPoint that’s abou IMC or about you yourself as an agency. But how would you differentiate yourself or how would you recommend that an agency or a person going through an RFP differentiate themselves in the first step to make that connection with a potential new client?

LE:

The one recommendation that I would have is it goes out to the procurement folks that are out there. This goes out to the brand teams on how to maybe urge that procurement person to do something like this. But if you do get to the presentation stage and you’re going to present your proposal to the team, the evaluation team is the marketing team. It’s also procurements in there and then maybe some other executives. But you want to take that first 5, 10, 15 minutes to develop an icebreaker. I always love to do something fun, really, just please introduce yourself. And as you do so tell, us what and pick a funny topic that we’ll all have a chuckle out of as they respond, too. But it also gets us to get to know each other.

Back when we were doing in-person presentations, I would actually have the meeting have a bumper at the very beginning to where we actually socialize. It’s a meet and greet session at the very beginning. I want to be able to get to know these guys before we actually sit down in front of a PowerPoint. And also that bumper is really good, so that that procurement person can work with maybe one other person, if there’s technical difficulties. So there’s a lot of different reasons why you do this, but for the most part, it’s so that the room can network and circulate and get to know each other. As a supplier, I would urge you to ask the procurement person, can we just have that 5 or 10 minutes at the beginning? If they don’t give it to you officially, build it into your presentation, have something fun, or that you basically introduce everybody on your team there and be cognizant that you just ate up 10 minutes of your presentation. So now you have the remaining minutes to present who your company is and how you’re going to present, deliver the solution and why you’re a good fit. But it’s just that little subjective part right at the beginning is fun.

ER:

No, that makes a lot of sense. That’s a great suggestion. In terms of executing an RFP. Are there different levels that one can execute? Does it have to be a really big, long extensive process or can you keep it simple?

LE:

Yeah, you can and it really depends on what the objective is. And we say RFP and people have different acronyms. There’s a request or an actual proposal. There could be a request for a quote. It’s just a quick turnaround. We don’t need a full capability. Maybe the engagement’s short-term. So maybe it’s just for our particular event that we’re looking for somebody, and we just need to know an RFI. And we’re looking for information on, do you have a capability to support us for this sponsorship or this event? Yes. No. Great. We just need a quote for that one event. Versus the longer term relationship. I’m looking for somebody who’s going to be with us for the next three to five years before we ever consider looking at the contract again, then yes. That’s going to be a longer drawn out process. So it really depends on what the end result is. I’ve seen some things go turn around in two to four weeks. I’ve seen some things turn around in two to four months in RFP. So different links.

ER:

Okay. If it is the longer term, what would you recommend in terms of timeframe?

LE:

My recommendation is always to the marketing team, because the marketing team doesn’t want to burden themselves with this process. A lot of times, they still have to do their nine to five job in addition to the RFP. And that’s why procurement, if they’re doing the right role, they’re taking most of the bandwidth and burden on them so that the marketing team is there just to make decisions. But you’re still looking at a lot of the work that goes behind the scenes before that RFP event even gets to the supplier, to be honest. We have our meeting at the beginning of understanding the goals and objectives. The timing. We start doing research on the market, who are the best suppliers to fit what we’re looking at. We may run a quick RFI at the very beginning just to qualify some people. Making sure they don’t work with a competitor, things like that.

So we do have those screening questions before we act, but then we have to start building the questions, some general questions. What are very specific questions to the scope of what we’re looking for and that you have to line all of this, everybody that’s a decision maker internally. There’s a lot going on before you actually see the RFP. Then the RFP gets launched. Now, once it’s launched, I generally like to give, depending on the scope, two to four weeks for the questions to go out and come back in. And in that time, having the clarifying Q and A can just be an email that goes back and forth with the questions and the responses. Sometimes the Q and A’s just a lot more detailed or complex. We actually have to have a phone call to address them again

That’s where it would take it more to the three or four week mark. But two to three weeks, generally, questions out, questions back in internally. Regroup on those questions. Be able to read through all that material. Again, we don’t want a large number of suppliers bidding because one, it does take time to go through a hundred plus questions, four times, five times, ten. If you think about it, if you have 10 suppliers, that’s just ridiculous. It’s a ridiculously big RFP. We just can’t get through all that. So again, a nice small three to five suppliers at most so that we can get through all the material consolidated. Maybe on black and white, some people just fall out of contention right away. They don’t have the capabilities. We didn’t understand it until the RFP came back in. We’re looking for them to have this or that.

If they don’t, we’ll clarify it with phone call. If they aren’t, sorry. No, we have to dismiss you. Now, you have a good sample size of two to three that’ll come to the presentation stage. And then from there, you’re going to hear them out. In the past, it would take longer because now we had to schedule to travel for each group to come in. Now it’s actually virtual. So it does happen quicker. So there are pros and cons in the RFP process, the turnaround’s quicker. It’s easier to schedule that presentation versus travel, but you do miss out on that human interaction and seeing if we just personally fit.

And then really after the presentation, it should not take the decision makers too much longer. Maybe another two weeks, three weeks at most to make a decision. There could be some qualifying questions afterwards. I have seen some mini RFP go right after that. We have five more questions. We’ve got to ask everybody, but not too often. Usually it’s one or two qualifying questions, and then we make our decision. So yeah, I would say roughly around six to eight weeks, right? Typical, long process RFP. If it goes beyond that, it’s really something complex and it could be two rounds of presentations, or maybe on the submittal of a type of a proposal or project that goes along with it.

ER:

Have you ever seen where someone steps out of an RFP? I know you said you guys have to review information. You may kick someone out, but are there instances where people step out themselves?

LE:

Absolutely. It does take a large burden on any supplier to participate in a full RFP. Agencies, sometimes they are asked to present a little mini deliverable. Come up with some ideas that you have and this and that. That takes a lot of time on the suppliers and I am very aware of that. I feel for the agencies. I hate giving agencies the news at the very end, after two or three months of battling through the RFP and then telling them, I’m sorry, you didn’t win. And I know how much time they’ve actually put into it at the end. There’s always just one winner. But yes, at times, it just isn’t a good fit. It could be timing. As I mentioned before, they may be working with competitors of theirs, or they just may not feel that they can deliver and do justice for the brand or the industry that they’re in. Maybe read through the scope and said just isn’t us. We’re not there yet where we don’t have the bandwidth to support a client like this yet. And rather than ruining our name in the industry, we’re just going to step out.

ER:

Interesting. That makes a lot of sense. And I think, as a smart move, if it’s not the right fit for somebody, for whatever reason. So when going through the data points and making a final selection, what is typically one of the top weighted factors for companies when selecting partners? Is it like price, prestige, work, experience, partnerships and relationships?

LE:

It’s going to depend on RFP by the RFP, brand by brand. And the reason I’m saying that is it depends on the reason that they are having the RFP. If it is for something quick turnaround, yes, they are looking for somebody who’s going to find a good fit and understand the brand equity of their brand and protect it really. So I think that’s first and foremost. Pricing, it’s not necessarily always front and center. And they’re all saying that I used to always say optimizing marketing investments isn’t always about spending more. It’s about spending more efficiently with the right partner. So here I think the key word is the right partner. Can we find somebody with the right experience? The brand feels very competent that this partner can execute what we need them to do. They understand our strategy, our goals for our brand, and that’s who we can actually see growing with over the next three to five years or longer.

ER:

I’m nodding along as you’re saying this, it’s just making the connections to me of how we can kind of apply and know that if it’s about the partnership and you’re the right partner, then my guess is the pricing is not any standard, but you’re not going to get that much of a variance. So it’s about who’s going to do the best job and work with you the best, not who is going to be the cheapest.

LE:

At the end of the day, to be honest, the pricing is not that drastically different when I look at them in the RFP. There could be some that are way low. It could be some that are way high. Those are both ends of the spectrum. My guess is when they are doing that, either they’re really trying to lowball to get in the door on either spectrum or they just didn’t understand what the need was. So you almost either have to go clarify with them. Again, did you understand what we needed? This was the scope and this is what we’re looking for you to deliver. Yes, absolutely. Okay. Maybe it’s not a good fit if you’re on both outline spectrums. Then you’ve got those guys that are right in the middle. That’s why I say if it’s five that you invited, two or on the outliers. Those other three are going to be priced right within each other.

You can almost use that as your benchmark to say, okay, the one that’s a little bit on the high side, can we fine tune that when we get to the contracting phase and be at a comfortable place for both of us? Yes. Great. So again, pricing, I kind of used that as a factor of did they understand what we needed. But really the other part is that partnership experience – can they deliver? That’s the key factor that they’re going to always look at. Pricing is going to be that part that they leave for procurement, just to say. Is that ballpark? Does it fit our budget? Is this what the market is demanding for this type of service? Yes. Great. We’re happy. Let’s move forward.

ER:

When helping clients go through this and revealing answers, what is the biggest mistake you see companies make when they’re executing an RFP?

LE:

There were always stories guys tell at happy hour on things like this. And I think the greatest ones are mistakes that I see is, sometimes, not always, but sometimes the bigger firms will have their canned answers that they use for their RFPs. They’ve seen these questions so they just copy and paste these canned answers instead of really doing their homework to understand the correct fit and need for the client. I think that’s the first and foremost. Marketing people can smell that a mile away.That’s what these guys do. They live for how to present something. So if they see that it just doesn’t look authentic, they sense it right away. You’re giving it that safe standard sales pitch versus delivering a solution. Those are kind of hand in hand. And the other one that I actually have seen quite a bit in my career, and it’s more of the incumbent thinking they have this one, procurement’s just making them go through this process. We’re going to get re-upped again for another five years. I’m not as worried about it. And so their effort is just minimal. And then when we’re talking behind closed doors, everybody’s like, this is surprising. They didn’t bring their A game. Their interns are running this, and you kind of chuckle about it. Yeah. But then they’re out. And maybe there’s a good reason. They just got too comfortable with the relationship.

ER:

That was actually one of my questions: did they typically ruin the business in your perspective, or do you base it on your story here? It’s like there is some bit of turnover.

LE:

There is. And I would say for the most part, if you really had to put it on a percentage spectrum, a large majority do get renewed. You got to understand, switching out any of your partners, whether you’re talking about office supplies to your chief creative office, agency, media, whatever it is, if there’s disruption and that disruption does take manpower and timing to put somebody new in place and onboard and get them into the process, some onboarding and transitions is painless. Sometimes it really is painful. And these companies will bring in a consulting firm like us, GDP to help minimize that transition. But yes, for the large majority, it is. But again, I think at the end of the story, I always told as far as incumbents, Coca-Cola and McDonald’s founders shook on their agreement years ago when those guys were still around. And Coca-Cola has always been in McDonald’s, but there’s never been a contract between the two of them. Coca-Cola is reminded all the time, there’s no contract. We can replace you with Pepsi at any time. And Coca-Cola works hard to maintain that relationship every day. And I actually used to consult Coca-Cola and I have seen the McDonald’s team there. These guys are just hell bent on winning that relationship every day. It’s amazing, actually.

ER:

That’s a great way to think about it. When a client came up in client services. And that really is how you should be thinking about your servicing clients every day.

EL:

Yeah, absolutely.

ER:

One other thing we’ve run into is just kind of the investment that is required in participating and completing an RFP. And we’ve had RFPs that they’ve asked for almost like a full strategy, something we would charge people for and they’re asking for this information within their RFP. So what’s the balance or what would you recommend? Is it worth it? I guess, it just obviously, it depends on the potential clients and resources and what an agency or what somebody is wanting to jump into. But have you seen that and where would you guide a client if they’re asking for too much?

LE:

It’s kind of hard. I actually have seen, I think on the interview side, when people are interviewing creative people and they’re actually asking them to deliver certain samples of their work. And then there’s always that fear from that person being interviewed, are they going to take my ideas and use it themselves? Same thing when you’re in the RFP, especially if you’re trying to deliver some type of strategy and direction, what would you do for this brand if you won the business? There is a risk there. But at the same time, I think the way when play favoritism to the vendor. You have to look at this individually and see, is this the right client for you? Do you see a fit here? Do you feel that you are capable of doing what they need? Can you grow this brand and grow with it as well.

Is there value there that you perceive the value being here? They’re not just from billing and invoicing, but maybe there’s a prestige of having this client on your roster. Is there something where you can both innovate and develop that supplier relationship management program? A partnership versus being a vendor, you become a partner. If you see all that, then yes. Investing the time, putting the right people in the RFP and again, not giving the canned answers. And you’re actually thinking through what is the actual pitch that we want to make here a solution. But it’s hard to say for me to tell if I was advising the agency, those are the things I would actually look for, even if I say yes, I want to participate. I wouldn’t participate unless I’m willing to actually go the nine yards on it.

ER:

You talk a lot about relationships and building partnerships, which is really key for us, when we think about working with clients, that’s kind of how we think about it is we’re building long term partners and building not only a partnership with a brand that we’re working with as a client, but then, we actually help facilitate partnerships. And that’s really important for us to kind of think about it that way, as opposed to a vendor or transactional when working in licensing. Because if your partner isn’t successful, then you’re not successful and you can do brand damage. But again, it’s hard because I feel like when you’re going through this RFP process, you’re kind of at arm’s length with the brand. How would you recommend making that connection from a partnership perspective? And my other kind of second half question to this is, are people that already have connections internally with companies that are going through the RFP with, do they tend to have an upper hand or does that not usually affect an RFP?

LE:

Well, is it somebody with a relationship?

ER:

Yeah. That already has a relationship.

LE:

I would say from experience, the second part of your question is that somebody within a relationship with the COO automatically wins the business? No. What I have actually seen is your relationship with somebody in the organization, a CMO or a VP will get you invited to the party, but does it automatically win you a seat at the table? No, absolutely not. It won’t. And I’ve actually seen CMO recommended vendors not make it past the RFI stage. So again, they’ll get invited, but then through the screening process, they may or may not be a good fit. And I’ve actually been at one where the CEO’s kid was interning at an agency, but they didn’t win the RFP. So, everybody was like, are we allowed to turn them down? Yeah, we are actually. Okay. Because again, at the end of the day, marketing has to deliver on what they’re responsible for. And the first part of your question, I’m sorry, can you just remind me what that was again?

ER:

Like again, how can you make that partnership connection?

LE:

Ah, yes. Especially with the pandemic and everything, we’re not meeting anymore. So, the interesting thing there is it goes back to the question earlier when I said do you have a really good procurement person leading the RFP? The thing that I love building in right now is what is that icebreaker? If you wouldn’t get to the presentation stage. And let’s say your presentations, I usually advise them to be about 90 minutes to maybe 120 minutes. That’s a very first. Let’s take 10, 15 minutes at the very beginning. Let’s ask an icebreaker. And I’ll always say, okay, I’ll ask the vendor as they’re coming in, everybody that’s there. Great. Would you please introduce yourself? But also tell me, what would it be a theme music that I could actually play? If you had the opportunity, what would be your theme music?

And so they kind of chuckle and they laugh. And okay, hey, I’m the vice president of business development. And I would have the Rocky music playing, and this is why. It’s just that icebreaker, you have to have it. Let me tell you if you don’t have a good procurement person and they’re just sort of running this thing, like a very rigid program, and there’s just no personality to it, build that personality into it. You’ve got your presentation. You’ve got 90 minutes to present everything that you have. Take that first 10, 15 minutes, build into your RFP introduction. An icebreaker. Make it fun. Do it as it reflects your firm. If your firm is very fun, build something fun at the beginning of it. If it’s very personable, whatever it may be, they kind of just show the people that they’re going to work with on a day-to-day basis whether they’ll fit or not.

And again, if you’re a very fun agency and your client is not fun at all, that fits not going to be there. You may not want to work with them. They’re just going to slave drive you. You’re not going to want that either. You’re going to be dealing mostly with procurement person all the time. You’re not going to want that either. I think if you actually build that ice icebreaker, it may actually answer on both sides. Is this a good fit?

ER:

That’s great advice. You’ve just touched on this a little bit, but so are people moving forward with procurement processes or are they sticking with current partners given COVID and kind of that I know, I guess it probably depends, which is always the answer. But depending on the industry, some things are a little bit more rocky than others. But are you seeing in general people still moving forward with this?

I think a year ago, people just didn’t know what was going on. And I was actually involved in a major RFP with a big CPG company at the time. And things were getting shut down and we actually had to do the presentations by online, Zoom and WebEx, Teams. So people, I think have gotten comfortable with that. I’ve actually seen a lot of people getting hired now where they’ve never once stepped foot in the office and the interview process. So I think companies are also getting comfortable actually now running RFPs and trying to find that right partner, again. Given the pandemic, given a lot of changes that are happening, I am seeing a lot of focus on digital. I’m seeing a focus on retail, those types of partners. But branding, brand licensing is still a thing out there. It’s just that you have to be creative. I’m not going to be able to license them maybe on a sporting event or a concert because those aren’t happening like they used to. How else am I licensing my brand and where they’re looking for that creativity or maybe that shift? So yes, we expected to see things ramping back up in the RFP process there.

ER:

Great. Well, before we go onto our next question, we’re going to take a quick pause to hear from our sponsor

Sponsor:

Today’s episode is sponsored by BrainBase. BrainBase is a technology platform that helps brands manage and monetize their intellectual property. The current platform assists, helps brands track their legal contracts, sales, royalties, creative, and product approvals, files, analytics, and so much more. Additionally, they’re working on launching a new service, Marketplace. Marketplace will allow you to showcase your brand and discover new opportunities from a global network of prospective partners. We use BrainBase assist program to manage and track licensing programs for our clients. We love the analytics and reporting tools and are excited about the new role reporting features that they’re rolling out. Check it out if you’re looking for an online management tool for your program. We’ve linked to their site in our show notes.

Now back to our show.

ER:

What are some questions that people should ask when participating in RFP or what should you make sure that you know before moving forward and starting?

LE:

I think understanding who you’re going to be working with. So I think that should go on both things. Sometimes, vendors will actually show up with their CEO and such to really try to show we were really serious about this. So we brought our executives to the RFP and the presentation. Well, that’s great, but I’m not gonna be working with the CEO on a day-to-day basis for most companies. So actually you can have your team there. But on the marketing side, you want to know all of the marketing side am I going to be working with? The CMO? Maybe they’re making a decision on the brand licensing partner, but you’re not going to work with the CMO necessarily every day.

So again, I think knowing who the brands are. Definitely, understanding the process and the timing. I think the biggest thing is not even just advice to the brand licensing people out there in the vendors, it’s for procurement. Understanding the goals and objectives of that brand, of that marketing team. That’s what they’re looking to do. That’s what they’re measured on at the end of the year by their bosses. Did you meet your goal and objective? Yes or no? Yes. Well that’s because our vendor understood it and helped us deliver that goal and objective. So I think that’s the biggest thing. Understanding who the budget holders are, because that’s going to be ultimately some of your decision makers as well. You may not be just one person. You may not just be the CMO of this budget, maybe a variety of people. So understanding that.

ER:

Yeah, that was my next question is who are our typical decision makers in an RFP process?

LE:

I think first and foremost, it’s always going to be the brand owner. So the brand managers, the brand director, first and foremost. They may or may not be the budget holder. So understand that because that person’s going to have a say in the decision. Marketing executives. Again, if it’s a big brand that we’re talking about, I alluded earlier, your biggest brand licensing people are Disney and publishing companies. So I’m sure that those guys have their executives at the table a lot of times when they’re licensing their brands out. But yeah, the one thing I will tell you is it’s not procurement. Some people may think that procurement is actually trying to make this decision like, oh, don’t hire, these guys are super expensive. I don’t hire them. I’ve worked with them in another company. Never, I will never make a decision. I can make recommendations. I can pose certain questions to the marketing team, but I’m never influencing them one way or another. It’s their decision. GEP is going to make sure that they have all the information they need to make that informed decision. And then I’ll always say that when I teach even the young ones coming in through the ranks. You’re not a decision maker, your procurement. Marketing is the decision maker and let them make the decision. But we’re going to do everything that a trusted advisor needs to do to get that information in front of them.

ER:

Any other advice that you would give those going through, either going through an RFP or thinking about executing an RFP to find a partner?

LE:

I would definitely just reiterate what was said earlier. Make sure that you do your homework to understand what it is that the brand is looking for. Make sure that it fits both ways. That you fit that brand and that client fits you as well.

If it does, you’re going to have a long-term working relationship. It’s not going to be something where in three years, they’re gonna look to replace you again. In three years, hopefully, it’s just going to be a renewal if it’s a good fit. I love actually doing RFPs and selecting that winner. But once I select that winner, I can’t wait to see what they’re going to actually produce for my brand, my company. And that’s the exciting thing, the RFP that I just did for my client, CPG for E-retail, I love getting in there and just seeing what changes I can see on the platforms that they’re in. And I’m like, wow, I may have had a small hand in that. I was in that RFP process, but now I can start seeing what the execution is. And that’s the fun thing, really. The end goal is to really find that good fit and just see the good work that comes out of it. Procurement’s not worried about changing out that supplier afterwards. Now we’re looking at developing that relationship into what we advise our client afterwards. Okay. We’ve now helped you find that right partner. How do we now build that bond and grow? What’s the next level of procurement? It was building that supplier relationship management, innovating together and growing together. That would be my parting thought is just make sure that you’re putting in the effort to understand before you answer.

ER:

Got it. So GEP does stay involved even after an RFP. They help with those things. I didn’t realize that they can provide those additional support services.

LE:

Absolutely. GEP can come in and just execute certain projects for clients. But for the most part, one of the things I also preach about is there’s new procurement, old procurement. Old procurement is just your buyers. So if you think about somebody just running an RFP and just buying pencils all day, that’s old procurement. New procurement is you’re an actual strategic sourcing advisor. You’re helping the marketing department find that right partner to have. And then how do they grow with that partner? It’s really taking that procurement to that next level where you’re not a buyer anymore. Now, it’s how do we work more efficiently and get more out of each other? And is that, do I want to get more out of my vendor for the same amount of money, but what is the vendor getting in return? Otherwise, they’re going to fire you as a client.

And I’ve actually seen that before. And back in my days, when I was just getting into procurement at Kraft Foods. One of the VPs who later became a CMO there, she actually told me, look, we have to help improve ourselves as a client because we’re not getting the top agencies anymore. And that was one of the things that actually worked with her. It was one of my new things to learn and do it when I got into procurement. And it was a great experience. Dana Anderson was the executive. Then she was the CMO at Mondelēz as well. Fantastic stakeholder, super smart. But those were one of the things that she actually taught me. We have to make sure that we are a good client. That way we can then earn the right to have top agencies working for us.

ER:

It just like what you said. Is just that partnership mindset versus that approach. And that sounds like what you’re helping guide your clients to and kind of how people should be thinking about this, because that’s where you find success.

LE:

When you’re saying, does GEP actually help companies with this? You know, what’s amazing thing is you’d be surprised how many Fortune 500 companies are still in that process of doing digital transformation. Maybe working from spreadsheets into a tool like GDP smart or taking their relationship with their agency to the next level or developing that ecosystem with their agency, but they just don’t know how. How to build this working relationship with all of my suppliers, working in unison together. A lot of times people keep their suppliers at arms length from each other, right now, six feet, social distancing. But we’ll still need to be working together. There’s gotta be that communication plan. Otherwise, I’ve just seen it’s painful when you walk into a marketing program and everybody’s in a silo, nothing’s working harmoniously. And you can just see that it’s this square wheel turning down the road. It’s painful. And the GEP actually helps them work through that and make sure that they have the right partners. And then from there, how do they work together in that ecosystem. This RFP process that we talked about, that it could be one of the vehicles they use. And then after that it’s developing the strategy overall to make it fit. So yeah, the RFP could be like one little cog in that big wheel at the end.

ER:

It makes a lot of sense to me because there’ve been clients where we’re like we should talk or we should work with your advertising agency or your PR agency, so that licensees can work with them. So there’s a cohesive message. And they’re like, nope, we don’t want anybody talking to anybody else. And it’s just the arm’s length that just doesn’t seem to work. So really, what you’re saying, bringing synergies and bringing companies and efficiencies together.

LE:

I think that goes back to the question you asked earlier, what should the brand licensing vendor ask of the client during the RFP? What other vendors or agencies of yours would we be working with to understand that? They’re like, no, you’re not gonna be working with anybody. You’re just gonna be working with our marketing. And everything goes through our marketing department. Okay. Now, you know what kind of relationships that’s going to be versus them coming in and saying, you know what, our AOR is this agency and our media company is this agency and our event agency is this company. And this is what you’re going to be working with as well, along with our full marketing team. Understand that. If you see that, that’s a big happy family. And yes, I can’t wait to start sharing ideas with all of these guys. The AOR is going to set this direction and strategy for the brand. You want to work with them if you’re going to be the brand licensing company. It’s a hundred percent, it’s a fit. Yeah. So I would say that that was one of the misses I had earlier yet. Definitely make sure you know who all the partners are that you’re going to be working with.

ER:

Great. Well, if people want to find you offline and connect, what’s the best way to do that?

LE:

Yes. I’m hoping that you definitely have a link to my GEP email (luka.erceg@gep.com). Happy to answer any questions for anybody there or through my LinkedIn as well.

ER:

Yes. Well, we’ll make sure to connect to everyone online. Please listeners, if you’re looking with how to connect with Luka, check out our blog posts and our page on this episode. All right. Well, thank you so much for your time and letting me kind of get the inside scoop on how to think about RFPs and even just think about our partnerships in a broader scope and working with clients. So I really appreciate your time and insights.

LE:

My pleasure, happy to be here and give some advice and hopefully make RFPs a lot less painful and more enjoyable for everybody across the board.

ER:

For sure. Well, hopefully we can connect again in the future and work together.

LE:

Sounds good. Looking forward to it.

IMC Licensing Logo Mark

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