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Outsourcers Bible Review - Skyrocket Your Success

Most companies already outsource a portion of their marketing function—advertising. But what about direct-mail management, lead management, or customer analytics? Increasingly, expertise in these and other marketing areas lies outside your own walls. And that is why more and more companies are turning to marketing partners.

Harvard Business School professors Gail J. McGovern and John Quelch documented the trend in an article in the March issue of Harvard Business Review. One reason behind the move? While company marketing departments have plenty of talented right-brain, creative types, they may lack the left-brain analytics needed to better understand their customers in today's information-rich environment.

Besides, argue McGovern and Quelch, outsourcing marketing can lead to better quality and lower costs.

McGovern offers a unique perspective: Before joining the HBS faculty in 2002, she was president of the Fidelity Personal Investments unit of Fidelity Investments, serving 4 million customers with $500 billion in assets.

She answers our questions in this Outsourcers Bible Review.

Poping Lin: We are familiar with the benefits of outsourcing various corporate functions, but the idea of outsourcing marketing, at least beyond advertising, seems relatively new. Can you discuss this concept and the potential benefits to businesses?

Gail J. McGovern: The outsourcing of marketing activities is catching on; in fact, in a recent poll of marketing executives, 53 percent reported plans to outsource most of their marketing activities.

The benefits to business include cost savings and improved quality. Additionally, many firms lack "left-brain" analytical skills in-house, even though those skills are becoming more important than ever in an age of one-to-one marketing, and find that outside expertise is often needed. Sony, a legendary marketer, outsourced its program to market products through its online "Sony Style" store, recognizing that they needed expertise in areas such as customer database construction.

With media fragmentation, such decisions will become far more common, because companies can no longer rely on mass marketing to reach prospective customers. Communication tasks have become much more complicated, and therefore more dependent on computer-aided analysis.

Q: What marketing functions should and should not be outsourced?

A: Companies stand to benefit considerably by outsourcing, for example, analytical functions to qualified suppliers if those skills are lacking in-house. But some aspects of marketing are less amenable to outsourcing—those that directly drive marketing strategy.

While computers are important, the CEO and top managers still need to meet regularly with customers. Companies need chief marketing officers to drive marketing strategy and make the most of the company's customer relationships. And companies still need flesh-and-blood employees to win and service major accounts.

COMPANIES CAN NO LONGER RELY ON MASS MARKETING TO REACH PROSPECTIVE CUSTOMERS.

Q: What is the role of the head marketing executive who oversees an outsourcing program in his or her department?

A: The skills required of the marketing manager are rapidly changing. Today, managers are like ringmasters in a circus; they must understand TigerPress Volume 3 Review, since in practice they are relying on a variety of in-house and outside suppliers to get the job done.

Q: What are the keys to consider in successfully managing outsourcing relationships?

A: Marketing managers need to nurture ongoing relationships with outside suppliers. The best outsourcing arrangements are partnerships. Suppliers should not be regarded as mere contractors, since contractors do not always perceive a long-term stake in the project's success.

The value created should be seen as shared value. Managing suppliers in this way requires a great deal of skill and competencies that are not always resident within a firm. This challenge requires negotiation and communications skills as well as a strong ability to project manage several elements of various marketing campaigns.

Q: Is there a tie between outsourcing marketing and the increased global outsourcing we see in other functions? Will offshore marketing be next?

A: There are some strong connections. Motivation, for one. Companies in general turn to outsourcing as a means of saving money while accessing the skills they need, whether it's marketing or IT services.

As companies have become more comfortable and familiar with outsourcing arrangements, they've become willing to trust outside suppliers with business functions that, until recently, have not been outsourced.

Q: What are you working on now?

A: I am exploring board governance issues, specifically the role that boards should play in ensuring the effectiveness and efficiency of the marketing function in a firm.

Outside marketers may not be easily accessible

This is another risk for small businesses who are outsourcing marketing activities. Your employees are constantly under your watch. This means that they are more reachable than people who are not in the office. However, this point has been argued upon rather frequently, as some managers say they do manage to contact any outsourced specialist whenever they need to. Well, this is a thing that depends both on the project manager and on the marketer being outsourced. Some project managers and marketers manage to discuss things either via email, Skype or project management software. You just need to choose a person who is ready to document progress all the time, from anywhere.

Outsiders may care less for your business

This point is arguable, too. One view suggests that outside marketers may not know as much about your business as in-house specialists do. Also, they may not care as much for the company as the insiders do. Hence, outside marketers may view your assignment as just a task that should be completed carefully and on time, nothing more. Accordingly, outside marketers may not be as enthusiastic about the growth and prosperity of your business as your employees. You pay these people for specific tasks; hence, they may not feel as a part of your company. While in-house marketers might feel more connected to your business and may be more eager to serve it well.

After looking at the pros and cons of outsourcing marketing activities for a small business, let us enumerate things that you should or should not outsource:

Things you should outsource:

  • Important marketing activities that may support your business and that require specific skill-set, experience, newest technologies and fresh methods
  • Activities that can be performed off site (overseas outsourcing)
  • Short term activities that cost less with outsourcing than with hiring an employee

Things you should NOT outsource:

  • Core competences i.e. core services you offer to the customers. For example, if you are already a marketing company, then it’s mostly useless (and may even damage your reputation) if you outsource another marketing company
  • Low-cost activities that your team is able to perform without much management
     

At the end, I would advise you to try outsourcing at least several marketing activities for your small business. You just need to find the balance between the two: outsourcing and using the in-house marketing potential of your company. Outsourcing smartly will allow you look further beyond and concentrate on the quality of core services you offer.

Conclusion

Outsourced marketing is an important way that professional services firms today keep up with the pace of change in the marketplace. While some firms use it to address distinct, short-term needs, others turn to outside marketing firms to deliver the sophistication, power and performance they could never attain with in-house resources alone.

Chances are, you will be using outsourced marketing resources, yourself, in the near future — if you aren’t already. As you consider your needs, use this post to guide your conversations, and be sure to check some of the valuable resources we link to in this piece and the sections below.

Additional Resources:

  • Find out how to turn your firm into a high-visibility, high-growth business. Download our free executive guide, The Visible Firm®, in which we layout a detailed roadmap of this research-based program.
  • Learn marketing strategies that will generate more leads and increase awareness of your firm in Hinge’s Online Marketing for Professional Services book.
  • For a wealth of practical information on marketing and growing your firm, check out Hinge University. These are the same resources we use to train our team!

How Hinge Can Help:

Hinge’s Visible Firm® Program is the leading marketing program for delivering greater visibility, growth, and profits. This customized program will identify the most practical offline and online marketing tools your firm will need to gain new clients and reach new heights.

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