Challenge #1: You lack a specific expertise or bandwidth
Effective marketing organizations require a wide range of expertise, and there are times when some component in the marketing process is unavailable or inadequately staffed. Marketing analytics, database marketing and data hygiene are three common areas of weakness in many companies. Similarly, many marketing organizations do not have the skills to use marketing automation tools optimally. In either case, organizations often require specialized outside help.
Challenge #2: You lack a specific technology
Marketing organizations are notoriously technology-deprived. While the proliferation of marketing automation tools has remedied this situation somewhat, a company's marketing organization is, many times, at the bottom of its IT organization’s priority list. As a result, marketing organizations often use a hodgepodge of incompatible technologies. A better solution is often to outsource specific marketing functions to specialists who use leading-edge technology.
Challenge #3: You want to manage more costs as variable expenses
Fixed costs in people, systems and facilities often account for the largest portion of a marketing budget. Marketing organizations need to adapt quickly to sudden changes in customer demographics and markets, as well as to take advantage of immediate opportunities. Outsourcing appropriate functions or projects provides this ability to operate in a flexible and adaptable manner.
Challenge #4: You want to benchmark your operations against best practices
Whether you are outsourcing a function like public relations, a channel like telemarketing, a capability like marketing operations, or a technology like your data mart, you almost certainly entrust it to a company that has done it before. The experience gained supporting many companies is critical to deriving best practices. Engaging an expert provides immediate access to expert people and institutional knowledge that can be transferred immediately.
Challenge #5: You want to focus on insight not operations
Think about the mix of skills in your marketing organization. There are some people whose primary responsibility is to understand, position, price, and promote products. Some focus on understanding demographics, segments and buying patterns while others manage relationships. In most marketing organizations some staff members are activity-engaged in managing processes, activities and events. They insure that X and Y come together in the right way and at the right time to insure that Z takes place on schedule. To be blunt, the former are the essence of your marketing group, the latter are not. The brain trust is the irreplaceable element in an organization; all other functions are candidates for outsourcing.
Challenge #6: You need to grow more rapidly
During a high growth phase, it is usually faster, and often cheaper, to outsource newly required staff or processes. Getting to market quickly with a new product, offer or distribution channel is very difficult if all the key functions must be identified, hired and trained before execution.
Challenge #7: You are trapped in a boom/bust investment cycle
Some industries and many companies are trapped in a boom/bust investment cycle. In some markets, like tax preparation, the cycle is repeatable and predictable. Other companies experience significant fluctuations in their business on an irregular and unplanned basis. Outsourcing functions gives a greater degree of flexibility and can improve the boom/bust cycle.
Challenge #8: You need to mitigate your legal risk
Life is changing for marketers around the world. Legal compliance has become a top priority for all marketing organizations. Most do not have an adequate understanding of the relevant laws or processes in place to ensure compliance – an activity that marketing outsourcers, especially database marketers, do (or should) perform well. A well-crafted outsourcing agreement that covers customer data privacy and security not only helps marketers understand these issues but can also offload at least some legal risk.
Challenge #9: You just acquired another company
An increasing number of corporate acquisitions, mergers and spinoffs have been taking place and will continue to be so. While these combinations and divestitures create new marketing opportunities, they also result in a proliferation of incompatible systems, databases, record formats, relationships and processes. Outsourcing additional marketing functions can smooth the acquisition process by freeing up IT staff. Second, since the outsourcer’s business (database marketing, for example) manages large numbers of external databases, they have the expertise and ability to scale as necessary.
Challenge #10: You just launched an additional geography or customer channel
Developing a new customer channel or geography is in some ways analogous to managing through an acquisition process. Each addition creates new opportunities and pitfalls. The more geographies and channels they include, the greater the opportunity to make a cultural or financial mistake. Outsourcing them or using outside resources to supplement internal resources is generally a good idea.
Michael Shanker is CEO and Director of Extraprise, a leader in right time revenue optimization for B2B and B2C enterprises, providing database marketing and demand generation services. For more information, contact the author at firstname.lastname@example.org, visit www.extraprise.com, or call +1(888)i2iMKTG.