Outsourcing Marketing

The old business model is changing. With a renewed focus on core competencies, a growing number of functions –previously internally handled– are being outsourced to experts. Cost savings achieved by performing technical and back-end activities in low-wage countries caused the initial explosion in outsourcing’s popularity, but were only part of a larger trend. As the functions being outsourced become more strategic, so do the benefits. In order to achieve them, companies must also have a more strategic relationship within their agency.

Why should a company consider outsourcing their marketing functions?

REASON 1: Higher Quality – Simply enlisting the help of specialists can have a significant impact on the quality of a small firm’s marketing. If a company spends the necessary time and money to assemble a group of talented marketers, there are still no guarantees that they will function well as a team or deliver the desired results. Agencies provide proven resources – expert teams with a track record of successful work.

REASON 2: Lower Cost – When a company chooses to outsource, they avoid the overhead, head count, liability and risk associated with maintaining an internal team. It can take time for a newly formed team to reach their potential. Meanwhile, the company is responsible for providing the training their staff needs to move along the learning curve. An outsourced team can hit the ground running and help get your message to market faster. What if one or more of the internal staffers turns out to be a poor fit?

REASON 3: Sharper Focus – Outsourced marketing allows company leadership to concentrate on its core business. The ability to focus on what the company does best is the basic benefit of outsourcing. Specialists deliver more for less and free-up internal resources that are often spread in small organizations. First and foremost, company leadership is no longer responsible for managing the production and delivery of marketing communications. Tactical “execution activities” are now the agency’s job – even if part of the work is performed by another company, i.e. subcontracted. In fact, the relationship network of a well-connected agency can be a significant asset if it brings more specialized resources to your projects. Regardless of the specifics, an ideal arrangement is one that allows company leadership to concentrate on the strategic aspects of marketing, rather than managing the moving parts.

Reason 4: Greater Flexibility – Marketing activity is rarely constant. While outsourced marketing expenses can adjust to meet the demand, in-house marketing is a fixed cost. Salaries and overhead expenses must be paid out each month regardless of the amount of work that needs to be done.

How to avoid disappointment

Vague Scope – Clients often expect agencies to act exactly like their employees –to go the extra mile for free. Agencies usually assume that extra work means extra compensation. Trouble exists when the parties skimp on front-end communications and fail to define clearly the line between good customer service and ethical payment. This often results in multiple change orders and/or either party feeling like they didn’t get what they were promised.

The company and their potential provider should take the time to develop an agreement that covers (in sufficient detail) what will be done, how, when, by whom, and the way contingencies, or “what-ifs”, will be handled.

Organizations should choose an agency that demonstrates outstanding communication during the pursuit and has a history of successful client relationships. Use small projects as a gauge for how the marketer relates to clients and how accurately they are able to deliver on your vision. Anyone can tell you that they use communication best practices, but to get a real understanding, watch how they work.

Communications Breakdown – Poor communication between the client and agency teams can lead to a number of problems. Miscommunications during handoffs often result in missed deadlines and marketing that “just isn’t quite right”, straining the relationship and resulting in costly re-works. When there is a loss of alignment between the company strategy, driven by executives, and the communications developed by the agency, more serious and long-term problems arise. As challenging as it can be for a small business to gain shelf space in the minds of customers, it’s even harder to change their perceptions after realizing that the message being communicated isn’t right.

The Marketing & Sales Enablement

"More than 80 percent of marketers’ time is spent managing the various activities associated with executing a marketing program or campaign. Most of these people are fire-fighters, working to control the conflagrations that flare up continually in marketing activities. This leaves them little time for doing the critical strategic work, such as brand architecting, portfolio management and new product development. As a result, the quality of their output and the success rate of their marketing activities suffer".  

Naveen Jain and Marianne Seiler, Accenture

This quote reminds me of all those marketers who are busy with organizing instead of planning. We see them driving in station cars, carrying around a  pop-up wall, sweating and cursing because “Sales is toc dammed lazy to do it”.

They should not blame Sales, but themselves. Sometimes I have the impression that they do all this kind of work as it is a good escape not to go for the difficult part of their work. Marketing is not easy and some people are just happy not to think about the essential steps to be taken in an effective marketing plan.

“To get started, marketers should begin by breaking the entire “revenue cycle” into stages (just as the sales team does for the sales cycle). For example, these stages could include the spectrum from “raw names” to “engaged” to “in-profile prospect” to “marketing lead” to “sales qualified lead” to “sales accepted opportunity” to “won business”. By formally defining each of these individual stages, as well as the business rules that determine when a prospect moves from one stage to the next, marketers can begin to understand the dynamics of how prospects flow through the pipeline over time.

Armed with this knowledge, marketers can then use marketing analytics to start making forecasts about how prospects will flow in the future. They can also determine how the company's marketing investments today will drive pipeline and revenue tomorrow and help their own department's prospects in the process.

Marketers that do this are in a great position to improve their organization's revenue performance, to justify and protect their own marketing budgets, and to increase their personal power and credibility within the corporate structure”.

Jon Miller, VP, marketing and cofounder, Marketo

When you still have some energy left, start running...in your private life!

Johan Jonker

The Marketing & Sales Enablement

"During Microsoft’s climb to the top of the software industry, rapid-fire product cycles often happened without much front-end input from the folks in marketing. Engineers would develop new software, pack it with bells and whistles, decide on an acceptable number of bugs and toss it over to marketing for a press release and a launch event."

                                    CMO Magazine, “The Ultimate Bug Fix”

Does this feel familiar? It is a problem that many of us recognize: marketing is simply there to announce this wonderful product (great news!) and the customers are supposed to line up to buy whatever we have built.

If the marketing role is so narrowly defined, who could argue with the logic of using these resources to help close sales?

Of course, this is not the case in every company and if so, it just has to change, and now Microsoft CEO Steve Ballmer has gone public with a commitment to “be excellent in marketing execution.” So, if even the technology industry is growing up and starting to understand what other mature industries have understood for a long time, marketing superiority delivers a sustainable, defensible and competitive advantage to those who master it.

It won’t be easy to develop the skills and cultural changes that will enable this new role. Microsoft estimates that they are currently “halfway through what may ultimately be a 10-year journey” to reinvent their marketing organization.

Where are you in the process?
How can we set up a great sales support systems, without losing all marketing resources towards individual sales support?
How can you keep your marketing department visible, service orientated and still focused on the core business?

Marketing generates the strategy that underlies sales techniques, business communication and business developments. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. It sounds so easy but many marketers didn't make it!

Johan Jonker