Articles
Outsourcing a company’s marketing
A better way to meet competitive challenges
by John GrahamNot only is everything moving faster than ever, everything is questioned.
“How can we do this better, faster, and at less cost?” This
question is the mantra of today’s business.
Examples are found everywhere. H-P’s extraordinary $199.95 laser printer
comes with a “starter” toner cartridge. It’s like the
“emergency” tire tucked away somewhere in your car. If you
don’t want to be caught running out of toner after the first 50 pages,
you’d better buy a regular cartridge when you order the printer.
The logo on the steering wheel of a recent Honda CRV is simply embossed in the
vinyl covering, saving a few cents from applying a separate badge. The vehicle
also came with one armrest, on the driver’s side. Another savings.
Retailers offer extra savings if we order on the Internet. Fewer customers coming
to the stores translate into reduced overhead. Is it just a coincidence that
mall traffic is dropping?
And then there’s the rush to move millions of white-collar jobs overseas.
It started with computer programming, now it encompasses help desks and call
centers. What’s next? Count on it––there will be a “next.”
Finding ways to wring out costs while getting the desired results is the way
of life in business today.
But what about a company’s marketing functions? Those in charge of marketing
complain about slashed budgets, while the threat of further reductions hangs
over their heads like a Damocles sword.
It’s ironic that this occurs at the very moment when the need for
“integrated marketing” is the greatest. The most effective
way to maximize the effectiveness of every marketing dollar is to design
a marketing strategy that results in the whole becoming greater than the
sum of the individual marketing activities.
Yet, even in larger companies, marketing is often handled by one or two people
who spend virtually all their time meeting managing vendors. What little time
may be left is more than absorbed by a myriad of management tasks that pile up
after staff reductions in other parts of the company.
The outsourcing of the marketing function is an intriguing alternative to the
once robust in-house marketing staff and its “ad agency.”
Four years ago, a large regional agri-business downsized its home office staff,
including its marketing vice president and support personnel. Its ad agency was
let go about the same time.
In the place of all this, it engaged the services of a marketing agency and charged
it with the responsibility to develop, implement and manage an integrated marketing
program. Not only was the new program far more comprehensive and inclusive, it
moved ahead fast and effectively.
Instead of managing a series of vendors, the vice president of marketing and
sales managed the process and had at his disposal a flexible, multi-skilled organization
operating at all times. He was free to spend his time leading rather than coordinating.
The marketing agency served as a valued resource, providing the vice president
with the broad range of business and marketing experience that helped him make
sound decisions. At the same time, the agency’s implementation capabilities
brought about the desired result in an integrated marketing effort.
Outsourcing the marketing function to a marketing agency has distinct benefits:
1. The focus is on the customer. The major hurdle for any in-house
marketing organization is serving its only worthy master: the customer. The management
pressures, not to speak of those involving job preservation, tend to skew the
way marketing programs are conceived and implemented. There’s no effective
buffer between management and the marketers.
Even though the in-house marketer presses to keep the eye on the customer, forces
from above push for a more “corporate-oriented” approach. What started
out as customer-focused shifts to one that is far more about
“us.”
Can a marketing agency avoid all such pressures? Of course not. But with a broad
range of experience of “having been there and done that,”
it can offer a level of assistance that can help keep the marketing focus
where it belongs––on the customer.
2. Immersed in your whole business. The issue
is marketing integration, a goal that’s difficult to achieve when
the tasks are divided among various vendors. Each one sees only their portion
of the total program and they naturally contend for a bigger piece of the
marketing pie.
On the other hand, the single-source marketing agency is charged with both a
total picture responsibility and implementation duties. The marketing vision
emerges from working together, performing the necessary research, analyzing results,
developing and testing programs, making changes and reacting to emergency situations
with eyes that are immersed in your business.
Ad agencies strive to drive customers to a banner ad. Direct marketers carefully
document the return on their offers.
But what does this really tell us? Do people buy now and not later? How many
customers were attracted by the campaign and what was their lifetime value?
The result is missed opportunities to acquire, convert and retain customers.
A vendor approach tends to obscure vision and sees marketing as a series of pigeon-hole
type activities. Disney, on the other hand, asks a marketing-oriented question, “How
much did a family spend on a vacation and what percentage of that could Disney
capture?” This strategy opened new markets such as hotels, cruises, taxis,
and restaurants.
ROI needs to be viewed in terms of increasing overall market share, rather than
the isolated response to a single effort.
3. Keeping the right focus. “Why does it take marketing
so long to get anything done? By the time they get around to it, we’ve
missed the opportunity.” Marketing is constantly under fire, particularly
from the sales department. At the same time, marketing finds itself inundated
with time-draining tasks and describes itself as the “dumping department.”
At the same time, the outsourced marketing department is better positioned to
remain focused on the agreed upon responsibilities. Yet, it has the flexibility
to bring more of its staff to work on special projects while fulfilling the regular
marketing tasks.
This is no minor matter. Being close to the client is necessary, but maintaining
a businesslike distance on the other hand helps filter out those tasks which
eat up time and deflect energy and resources from the primary mission.
4. Speed and efficiency. The right marketing agency is
prepared to handle contingencies. When emergencies arise––and
they always do––the systems are in place to bring together
the disciplines required to deal with the exigencies of the situation.
The players are always prepared to act. They know and understand the account
because they have been working on it as a team. As a result, they are a
tested and efficient resource.
Always being up to speed is a benefit from having the outsourced marketing resource
on board.
5. Integrated disciplines. The value of the single source
approach is not simply having a variety of disciplines under one roof,
although that is a distinct benefit. While various disciplines––such
as advertising, direct mail and public relations––are readily
available individually, having them on a team that works together all the
time, sharing the same marketing philosophy and focusing on a unified objective,
is the true benefit.
Having the disciplines on the same team frees the participants from constantly
thinking about how to grab a larger share of the business. Here’s the point:
downsized in-house or minimally staffed marketing departments inevitably become
dependent on vendors, not just for quality and timely implementation, but as
the source of ideas, even though the vendor is not immersed in the client’s
business.
While any vendor should be expected to offer recommendations for carrying out
a project in the most cost-effective way, it’s not the vendor’s project.
The role is filling an implementation need, nothing more.
The challenge is not just getting a project out the door, but getting it launched
so that it meets the agreed upon objectives and fits properly into an integrated
marketing effort. That’s where the marketing agency is key.
6. Getting the job done right. Like anyone else in a company,
marketing directors have both strengths and weaknesses. It shouldn’t
be surprising that a company’s marketing activities tend to reflect
the individual’s capabilities and interests.
A marketing agency developed a multi-faceted program for a fashion manufacturer
that provided support for the company retail channel, assistance for the sales
force and consumer awareness activities, including a highly successful community
relations program. When a new in-house marketing director was hired, the individual
took a “vendor approach.” The results were a damaging loss of creativity,
unity, consistency and quality in the marketing activities.
Missed deadlines became the rule, not the exception. Although in-house staff
was added, everyone was spread so thin the stress level was damaging.
On the other hand, the marketing firm was set up to be more fluid and flexible
to adapt to changing needs on a consistent basis.
In summary, the marketing agency as the outsourced marketing department offers
perhaps the best opportunity for companies to achieve the objective of integrated
marketing––of looking at the whole, instead of just dealing with
advertising, PR, direct mail and media relations.
Because the outsourced marketing function is close to the company––far
closer than the average ad agency relationship, for example, but still not within
the company itself, it can bring insights from its total experience to bear on
meeting a client’s business objectives.
John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He is the author of The New Magnet Marketing and Break the Rules Selling, writes for a variety of business publications, and speaks on business, marketing and sales issues. Contact him at 40 Oval Road, Quincy, MA 02170; 617-328-0069; jgraham@grahamcomm.com.