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Outsourcing a Company’s Marketing
A better way to meet competitive challenges
by John Graham
Not 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.
© 2004 Graham Communications
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John R. Graham is president of Graham Communications,
a marketing services and sales consulting firm. Mr. Graham is the
author of four books on marketing and sales, including Break the Rules
Selling: Success Strategies that Beat the Competition (Superior Books).
Mr. Graham writes for a variety of marketing and sales columns for
business and trade publications and he presents his Magnet Power presentations
at company and association meetings. He can be contacted at 40 Oval
Rd., Quincy, MA 02170; by telephone at 617-328-0069; by fax at 617-471-1504;
or by email at j_graham@grahamcomm.com. The web site is grahamcomm.com. |
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