As we know everything is getting online and procurement teams are under pressure. Why? Because they reduce costs, reduce risks, and also streamline their supply chains in this rapidly changing world.
However, traditional approaches are no longer helpful to them. They need modern tools and strategies to make better decisions. One of these smart and modern tools is digital marketing.
Digital marketing is seen as customer acquisition and engagement through a digital marketing agency, but its applications go way beyond that. By using data-driven insights from digital marketing, procurement teams can find new opportunities for supplier discovery, market intelligence, and demand forecasting.
In this blog, we will explore how procurement professionals can optimize their strategies using data-driven digital marketing insights, and we will look at tools, techniques, and best practices for procurement processes.
The Growing Role of Procurement Intelligence
Procurement intelligence is the data-driven insights and actionable information that procurement teams use to make strategic sourcing decisions, negotiate better contracts, and reduce costs.
If we look at the history you will find that most of the procurement departments have used historical purchasing data, supplier relationships, and internal networks to guide their decisions.
However, with the market becoming volatile and fast-paced, they can not rely on traditional methods. To be efficient and successful, they are considering the latest methods for their data-driven decisions.
They are currently using a wide range of data sources including market trends and supplier performance to competitor analysis and customer feedback. Digital marketing insights include customer behavior, digital touchpoints, and online interactions. Due to this, procurement professionals are gaining a deeper understanding of the changing market. This also helps them in making better decisions to improve procurement.
How Digital Marketing Insights Drive Procurement Optimization
1. Finding the Supplier and Market Intelligence
To make decisions, procurement teams have used different data sources like industry directions and supplier evaluation. However, digital marketing has changed in order to find the right supplier markets. This is the first step in the process of delivering the best value.
Now through different marketing channels, suppliers are showcasing their products, services, and value propositions to a wide range of audiences.
Additionally, procurement teams can use these online touchpoints to get insight into a supplier’s capabilities, reputation, and market position. By monitoring online reviews, social media activity, and website content, procurement professionals can get a better understanding of a supplier’s performance and reliability before they formalize negotiations.
Not only this, but Search Engine Optimization also helps the procurement teams to find active suppliers in the market. They do so by finding out websites of the suppliers that are ranking first for some keywords and phrases. This helps them find which suppliers are actively investing in their digital marketing. But why do they do this? The aim is to reach their target audience.
2. Competitive Intelligence and Benchmarking
Understanding the competition in the market is very important for the procurement team to make better decisions. Digital marketing provides these insights to them. It also helps them to understand:
- How suppliers are positioning themselves in the market
- What pricing strategies they are using
- How they are differentiating their products or services.
By tracking competitors’ digital marketing, procurement professionals can see what types of campaigns are working with customers, what messages are being communicated, and what offers are being promoted. This can be used to see if current suppliers are keeping up with market trends and if alternative suppliers can offer better value. It can also inform negotiations with data-driven insights into what similar products or services are available in the market.
3. Demand Forecasting and Trend Analysis
Forecasting plays a significant role in making decisions. That's why procurement teams use these sights to build a strong procurement strategy.
In addition, it also helps the procurement teams to make wise buying decisions. But remember it's not always easy. As the market constantly changes, the forecasted value can differ. That's why the procurement teams always stay updated with the latest market fluctuations.
However, digital marketing data can make forecasting easier by analyzing website traffic, social media engagement, and online shopping behavior.
4. Always Monitor Supplier Performance
Procurement teams must ensure that suppliers are performing their service with quality. In the past, they used to rely on surveys and feedback which led to flashy decisions. But now digital marketing has changed everything as it provides real-time data and insights.
Moreover, procurement teams get a clear understanding of whether a supplier is reliable or not. They do so by tracking online reviews, ratings, social media mentions, and content engagement.
5. Data-Driven Negotiations
In procurement, digital marketing helps the team to get a clear understanding of the market landscape. It achieves this by analysing supplier pricing trends, market positioning, and sustainability of pricing models.
But how? By using the information that the procurement team gets from the frequent online promotions or campaigns. This helps them to better negotiate pricing as well as additional value in the contract.
Best Practices for Using Digital Marketing Insights in Procurement
If the procurement team wants to fully use digital marketing insights, they must develop a structured strategy. By simply collecting data and saying their work is done, then they should not expect success in their procurement process.
They need an integrated, monitored, and analyzed system that can drive smarter decisions for them. Thus, they can use the following strategies to effectively use digital marketing in their decision-making:
1. Integrate Digital Marketing Data with Procurement Systems
As we have already mentioned above if you truly want to leverage digital marketing in your procurement decision, you must integrate it into your system. But how can you do this? You can do this by incorporating digital marketing into your procurement tools.
However, the procurement teams should use advanced analytics platforms and automate data collection.
However after collecting data, they should apply the insights to their processes. This will help them to take strategic actions.
2. Regularly Monitor Digital Channels
As you know the digital world is changing every moment and if you don't keep yourself updated with the latest trends, you will lag. So, to do this procurement teams must regularly track digital channels to know
- The new suppliers in the market
- The emerging trends in the market
- Their competitors’ activities and pricing strategy.
Through this, any procurement team can remain informed and stay ahead of the market.
3. Work with Marketing Teams
Most procurement teams don't collaborate with marketing teams so that they can make wise decisions. However, they must collaborate with the marketing team to fully use digital marketing in making smart decisions. Why? Because it provides insights into customer behavior trends to anticipate demand.
In addition, it also helps the procurement team to align procurement and marketing strategies for better supplier negotiations and forecasting.
4. Use Advanced Analytics for Smarter Decision-Making
The digital marketing procurement team will have a vast amount of data. But all this data is in the raw form and if studied properly it is a gold mine of insights. That's why procurement teams should use machine learning, AI, predictive analytics, and competitive benchmarking tools to make smart decisions.
Conclusion
As already mentioned if a procurement team wants to truly make smart decisions, they must use digital marketing as a tool. They must use the data they take from digital marketing and beat their competitors in areas like supplier discovery, market trends, demand forecasting, and even negotiations.
So, every procurement team should integrate digital marketing into their strategy-making process. Why? To make smarter decisions and achieve greater success.
