If you just said 'NEVER', you must read on.
As passionate marketers we'd NEVER suggest you outsource your marketing. However, as practical marketers, who understand only too well the targets and constraints you are working with, we'd like to say, "NEVER, SAY NEVER". Tough times call for hard decisions and outsourcing a part of your strategic marketing function could deliver better business results, much faster and with a significantly lower head count.
While mid size and smaller organisations have traditionally relied on outsourcing their strategic marketing function either because they can't afford or don't feel the need for a full time strategic marketing team, in today's business environment we find even large, established organisations consider the outsourced alternative. We've summarised below some of the need triggers to consider the outsourcing alternative.
Strategic marketing skill or resource gap
While brand targets are time bound and well-defined, we all know getting the desired skill sets on board can take an undefined period of time. Add to this the high employee turnover, growing costs of recruitment and the opportunity cost of a wrong hire and the case for getting external marketing resources for time bound strategic marketing projects becomes very strong. Large organisations with an expanding brand portfolio, early stage companies, digital companies with high employee turnover, companies located in cities where the talent pool is limited, B2B organisations, and MNC's with limited local marketing have typically benefitted from this model. Take the example of a leading global retail chain entering India that hired the services of an experienced CMO on a part time basis for the initial period till such time as the brand reached an optimal scale to justify a full-time position.
Short-term high intensity projects or new brand incubation
Ensuring brand teams focus on growth and revenue for the core brands, while also managing other non-core projects or investing quality time in new brand development can be a delicate balance. Large organisations that are diversifying into new segments and organisations that are in the early growth phase have incubated these projects externally during this high intensity period, bringing the brands back into the internal marketing fold when they are at an operational stage. The Royal Shakespeare Company when embarking on an ambitious digital transformation programme, brought in an external consultant to oversee the project for a two-year period till it reached the point where the programme needed to be fully embedded in the business rather than have one person driving it. As marketing consultants we've incubated numerous brands through the pre-launch, launch and post-launch period in categories ranging from consumer products to rural, IT, and media and entertainment for periods ranging from six months to two years.
Focus on core competencies
Many organisations have taken the strategic decision to focus on their core competency be it R&D or software development or product design, and to outsource other strategic business functions till such time as the business reaches a size and scale that justifies having experienced and full-time strategic marketing resources in-house. We work as the outsourced marketing team for a leading global IT brand that has focussed its internal capability building largely on manufacturing and channel sales.
Different approach and fresh thinking
The best of marketing teams reach a stage of mental fatigue when working on similar brands and categories over longer periods of time. Bringing in an external team that is not bogged down by internal biases and conditioned thinking may bring in that much needed fresh perspective to address specific brand challenges. When Monsanto knew it needed to transition from being product-focussed to customer-centric, it turned to external specialists to develop a new grower-focussed approach.
Highly specialised expertise or skill set
Some projects such as brand architecture, new product development, or content marketing often benefit from proprietary tools and methodologies that outsourced teams can bring to the table. Similarly, while entering a new category or exploring a new marketing tactic the time-to-market and learning curve can be significantly shortened with the right expertise on board for a short duration. When HP split its business into two separate companies for consumer products and enterprise solutions, it hired the expertise of specialists in developing the new brand strategy, architecture, and identity.
Cross industry learning
There is a tendency for organisations to hire marketing teams from similar industries and categories. While this ensures the teams can literally join running, it also means that they limit themselves to 'category myopia'. In some sectors such as consumer products, technology, and financial services this is particularly true. Numerous case studies exist for bringing in cross industry learning such as the value of retail marketing or hospitality experience in the marketing of banking services.
While the business rationale to outsource a part of your strategic marketing function is strong, there are also many doubts concerning the external teams' level of commitment to the brand and organisation, their ability to work seamlessly with internal teams, their ability to understand the category and brand, as well as the confidentiality of new initiatives. Hence, while evaluating your outsourced partner other than the obvious evaluation of its relevant expertise and ensuring confidentiality contracts are in place, we suggest setting clear, measurable, and time bound targets, as well as clearly defining the scope of work to avoid any trodding on toes along the way.
In the final analysis, the decision to outsource a part of your marketing depends on a thorough understanding of the unique needs of your company. However, it's important to keep in mind that in the new definition of competitive advantage, it's not the capability you own, but the capability you access and control that helps brands win in the marketplace.
(The author is managing partner at BrandStory Consult, a brand and marketing strategy consultancy)