Outsourcing marketing functions can be the right decision for some companies, but not every company. The role of managers and chief marketing officers is to determine whether outsourced marketing can help your organization for the short- or long-term. Startups and SMEs (small and medium-sized businesses) may have no choice but to outsource, at least initially. Larger, more established organizations may already have internal marketing departments for brand promotion and strategic direction.
Most companies outsource non-core marketing activities, such as social media and content development in varying degrees. The key is to determine functions that can be better performed by a third party, if any. Another consideration is the type of outsourcing engagement. Do you need end-to-end management of marketing services or management of a specific marketing function? Whether it is a need to scale up due to increased marketing activity or a sudden need to access expertise and resources, the following guidelines can help you make the right decision.
The marketing function requires multiple experts that may include communication professionals, research analysts, product specialists, content developers, digital marketing experts and others. Many organizations lack expertise at one time or another due to the unavailability of skilled talent or inadequate staffing. In this case, it's a sound idea to work with a third party that can fill the talent gap in your organization.
Many marketing companies have incompatible technologies and legacy systems that can make it hard to execute promotion strategies properly. Even companies in the high-technology sector find that their marketing departments are not at the top of list for technological upgrades. Building the required applications or infrastructure in-house can be prohibitively expensive. An alternative is to work with a marketing service provider that already has the tools to help your marketing department perform optimally.
Marketing companies must be on their toes all the time to keep up with a constantly evolving market. Sudden changes such as new customer demographics and volume spikes that demand more resources can tax internal marketing departments. Outsourcing certain marketing functions can give an organization better flexibility in terms of scalability and adapting to changes. Working with a third party during critical times of change can keep costs down (including hidden costs), reduce risk and allow the organization to access resources it lacks on an ad hoc basis.
If you suspect that your internal marketing capabilities are not up to snuff, working with a service provider can improve process efficiency and allow your organization to access best practices. Due to their experience working with different companies over the years, marketing service providers have built up the right technology, skilled staff, deep industry partnerships, and best process flows to give your company a competitive edge.
Organizations that need to get products and services to market quickly often need additional support in the form of personnel, technology and efficient processes. It is true that you can build these capabilities internally, but it tends to take time and cost a lot of money. Working with a marketing expert is not only more affordable, it also gets your product to market much more rapidly. However, it is crucial to have a knowledge transfer system in place after the outsourcing contract ends to get the most out of the partnership.
Marketing department staff assumes a wide variety of roles. Some of these roles, like the analysis of buyer demographics/segments, product pricing, and understanding data to improve operations, are strategic to the organization. Other roles, such as events planning and digital content management, while crucial, can be assigned to a third party. CMOs need to determine whether a marketing function will be better performed by an outside expert and outsource accordingly.
Benefits of Outsourced Marketing
Outsourced marketing engagements can be a powerful transformational tool if managed properly. Marketing service providers generally have a wider range of capabilities and more resources than the average non-specialized marketing department, leading to improved services at a lower cost. For larger companies that already have well-oiled, efficient marketing departments, outsourcing can mean innovation and increased competitive advantage. For startups and smaller organizations that may have no choice but to work with an agency, outsourced marketing can level the playing field.
Other benefits of outsourced marketing include:
Improved focus. When you outsource non-core but essential marketing functions, your internal marketing staff has more time to work on activities that are central to your marketing efforts such as analytics that improve performance. Startups can also better focus on developing products and getting them to market quickly.
Reduced overall costs. Comprehensive marketing services from a third party can cost much less than hiring a full-time high-level marketing professional. You get a group of marketing experts without spending a fortune on software, office space, equipment, and infrastructure.
Expanded talent pool. In-house marketing departments may not always have the skills and people required for complicated or large-scale projects. A service provider augments your internal team with experienced and talented marketing professionals that integrate seamlessly into your organization.
Transparency. When you work with the right outsourced marketing provider, you retain access to internal data, knowledge databases and intellectual property' without hidden fees.
Custom solutions. Internal marketing departments basically exist for brand promotion regardless of the organization's current needs. An outsourced team is assembled based on your company's need for resources and talent, strategic goals and budget.
Outside perspective. An outsourced marketing team can enrich the marketing process by providing an objective viewpoint. Working only with an internal marketing staff, it is possible to get too close to the business, neglect the customer's perspective and ignore other strategies.
Investing in Marketing Outsourcing
With its many advantages, outsourced marketing seems like a logical decision for every organization. However, the impact of the same outsourcing engagement can vary widely depending on the company and its goals. This is why it is important to conduct a thorough internal and external evaluation to determine if a marketing function can be improved if performed by a third party.
Possession of certain characteristics enables a company to fully realize the benefits of an outsourced marketing campaign. Doing what you are good at "the reason you started a business in the first place" is critical. If you are great at developing and designing mobile applications, for example, that is what you should focus on. Let other members of your team perform business activities that they are good at.
Investing in outsourced marketing is getting an entire team of marketing experts, along with the appropriate technology and best practices, for so much less than the cost of recruiting and supporting individual marketing staff.
Building an internal marketing team is not only expensive; it can take a long, long time, particularly if you are looking for top-level talent. Outsourced marketing is a way to gain the talent, technology and processes you need when you need it, allowing you to scale up or down easily and better adapt to changing customer needs and market fluctuations.
Choosing the right provider is another key to success. Any competent service provider can support your marketing efforts with talent and technology, but only a qualified and experienced vendor that focuses on value and innovation can transform your organization. Look for a marketing firm that develops a long-term partnership guided by strategy and business goals and improves processes across the board.
To achieve even more savings without sacrificing quality of service, consider working with an offshore marketing service provider. Due to lower labor and operating costs, offshore vendors can reduce your overall marketing costs significantly.
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