Outsourced marketing is quietly becoming one of the more significant business strategy developments in the 21st century. In fact, a 2004 Forrester research study indicated its more pervasive then ever with 53% of 650 executives surveyed indicating they planned to outsource more than half of their marketing activities. And, that number is expected to keep climbing as businesses grow more comfortable with trusting the important function to others. There is some serious logic behind the trend. Benefits of outsourcing include:
* Increased focus and efficiency – It’s all about staying focused on your core competencies. Businesses that are less than 50 employees tend to be too small to have a dedicated marketing department. Instead, one or two people are tasked with manning the marketing ship while also maintaining their primary position. Odds are they have way too few hours in the day to devote to the task and too little (if any) formal training. Moreover, every hour they spend doing marketing is time they can’t bill their clients. By outsourcing strategically, the small businesses can focus on those day-to-day tasks that they get paid for while still securing the marketing expertise usually reserved for the bigger firms. Even those larger businesses with marketing departments are getting in on the outsourcing act. Farming out selective marketing tasks (Web site development, research, CRM implementation, etc.) makes sense to allow internal teams to tackle other large, ongoing initiatives. Marketing directors at those firms act as ringleaders by developing the overall strategy and monitoring the work of the outside firms to ensure that standards and key messages are adhered to. Smart marketing managers look at their vendors as partners that can grow with and mutually benefit from the company’s long-term success.
* Gaining outside perspective and experience – In addition to outside marketing expert’s specific strategic or task-oriented skills, a company can benefit from that person’s outside perspective. Consultants tend to not be encumbered by the knowledge of “how it’s always been done” or the internal politics that perpetuate that cycle within a company. Also, the marketing consultant can be more focused on the needs of the end consumer then on the operational issues of running the business. This will help you determine how your company is viewed by customers and if its product offerings and communications are in line with consumer expectations. Rolodexes also expand with the use of outsourced partners. Because of their varied background, odds are good that the marketing consultant may know a good specialist for unusual marketing challenges or highly specialized tasks. And, the consultant’s ability to pull those resources in as needed keeps quality high, response time low, and costs minimized.
* Cost effective – manage costs – variable versus fixed - When done strategically, it is actually possible to save money by outsourcing. Businesses are able to control their fixed costs by converting them into variable expenses. Instead of paying dedicated salaries for staffers, more money can be spent on prospect building activities like advertising, direct mailing, and customer relationship management. At the same time, some variable expenses can also be reduced such as the cost of training, payroll service fees, insurance rates, and human resources costs. Consultants may also suggest strategies that focus on the tighter target one-to-one market if mass media isn’t working efficiently or cost-effectively.
* Better project management & accountability - A good consultant is essentially a project manager. Their role is to balance your immediate goals with your potential clients’ wants and with your long-range brand direction. All this with set deadlines and fixed budgets. To do it well, most consultants have a tried and true system of management and communication. To begin they should define realistic expectations and a scope of work. Throughout their contract, you should also expect regular progress reports on successes achieved, budget levels, and work still to be done. The need to regularly prove themselves leads to increased accountability. Marketing consultants are keenly aware that contracts get renewed or cancelled depending on the results they can achieve for clients. You may see results from your campaigns as early as one to two months but, six months is typically an appropriate time to start gauging the real
return on your investment in the consultant. The first couple of months may be heavy on the plan and systems development needed before the implementation can take place in earnest. You can help them succeed by insisting on realistic goals from the beginning and adequate measurement techniques at set intervals.
Is outsourcing right for your company? Some considerations:
Outsourcing your company’s marketing can help you become more competitive, spot new markets, and grow your business. It is important to recognize, though, that it is not a quick-fix, cure-all. And, it shouldn’t be entered into lightly. There are some factors to weigh before turning over some or all of your marketing function.
* Be prepared to pay for quality and service. Expect junior level rates to average between $80-100 an hour and senior rates at $120-180 an hour. Smaller firms tend to offer better rates but be sure to check their (or any sized firm’s) reputation and references.
* You must be committed. The learning and planning curve for most outsourced marketing efforts is 2-3 months. Some quick results are often seen. But, be prepared to give the program at least 6-9 months to bear long-lasting fruit.
* Accept that you will give up some day-to-day control. Most companies find that any downsides are far outweighed by their prospective success.
* Be willing to communicate with your outsourced partner. They can only be as effective as you help them be. Regular, two-way communication is essential.
* Recognize that personality counts. After all, you will have to work closely with this consultant for months or years to come. By doing your homework when picking a consultant, you can be sure to minimize risk and maximize reward. When deployed strategically and managed effectively, significant efficiencies and profits result. And after all, isn’t that what smart business is all about?
