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.