At the end of 2017, Keypoint Intelligence – InfoTrends published a research study entitled Pricing for Digital: Exploring New Models for Transactional Communications Delivery. As part of this research, we conducted over a dozen in-depth interviews with print service providers in North America to gain a deeper understanding of the primary pricing obstacles that stakeholders face in today’s changing market. One of the primary issues that our interviewees identified was a gradual but significant shift in enterprise transactional communications—the balance of power is transitioning away from business leadership in favor of procurement. In today’s world, heightened consumer expectations of personalization have made the customer experience a paramount concern for providers that are issuing enterprise communications. Unfortunately, enterprise procurement’s fixation on reducing costs in customer communications delivery often takes precedence over improving quality and enhancing value. The print service providers that we interviewed paint a disturbing picture: procurement departments are often out of step with current consumer trends and their methods are frequently viewed as antiquated. This is causing many to question the value that the procurement unit can deliver to enterprise clients and prospects. 

In the course of day-to-day business practices, procurement’s growing influence has made request for proposal (RFP) engagements a fact of life. Procurement representatives are intent on using RFPs to standardize providers’ proposals so they can better compare bidder prices. Unfortunately, procurement departments often have a limited perspective on the intricacies of creating, managing, and delivering transactional communications as well as a desire to keep prospective vendors at arm’s length from internal business owners. As a result, information about the true purpose of transactional communications is incomplete and the burden of financial risk now falls on the procurement rep’s selected vendor.

Due to overly rigid RFPs, procurement policies have become disconnected from the realities of customer communications work. Since the procurement department generally does not understand the details of an individual job, everything is homogenized. This ultimately produces a watered-down request because procurement departments force applicants to fill out RFPs in exactly the same way and disqualify those who deviate from the formula. Providers face difficulties in packaging their specific offerings, demonstrating how their unique capabilities can meet a prospect’s needs, and synergizing services with their own corporate culture. Because these guidelines are so strict, it has become nearly impossible for service providers to accurately represent their costs. To make matters worse, procurement units often expect their outsourcing vendors to match the lowest bid in each category with no regard for the various ways that applicants may have bundled their offerings. This trend puts incumbents—which may include unaccounted costs in their proposals due to their in-depth knowledge of the real need—at a disadvantage against newcomers who will simply provide a price for the requested services. If a new provider wins the contract, that provider will often need to absorb additional costs that are obscured by the imperfect RFP process.