Outsourced Marketing, Part 1: The Market

As businesses begin to recover from the recession, many are using this time to ask hard questions about exactly how they run their organization. For better or worse, the downturn forced many owners to downsize their internal teams and restructure which roles would be handled by employees and what duties could be outsourced. In this first post, I'll examine marketing outsourcing options for the small and mid-sized business owner. Next week, I'll provide a process for selecting the right marketing solution.

Outsourced Services, Redefined

The concept of outsourcing is nothing new. While many think of "outsourcing" as sending jobs overseas, modern outsourcing is much more sophisticated. Rather than simply shifting jobs to cheaper markets, many businesses use outsourcing as a strategic way to offload functions that aren't core service offerings. And, as some discover, these service providers (many of which are state-side) can provide superior service at lower costs. Here are just a few examples:

Information Technology

In Portland, firms like Convergence Networks provide an entire team of IT pros, often for less than the cost of one dedicated person.

Human Resources

In the HR space, we've seen the rise of PEO (Professional Employment Firms) and HR outsourcing. These solutions can be a complete turn-key department (payroll, benefits, insurance, and even employee handbooks). Examples in the northwest would include a company like Xenium which serves clients in the Portland and Seattle markets.

Virtual Receptionist

Companies like Ruby Receptionists provide an outstanding "virtual receptionist" service, answering and directing calls for a fraction of the price of a "real" receptionist. Ruby provides real, live receptionists and you can finally ditch the annoying auto-attendant robot.

Of course, this is just the beginning. Kinesis has successfully used an outsourced CFO firm for the last year (with amazing results) as well as an outsourced benefits provider. Even with this deep network, I continually look for new ways to leverage outside experts; this strategy allows Kinesis to focus on what we do best (marketing) and reduce our time spent on business operations outside of our primary expertise.

Outsourced Marketing

While many businesses have grown comfortable outsourcing portions of their operations (if you have an accountant, you're already "outsourcing"), few have figured out a good way to outsource marketing. To help owners navigate the marketing landscape, I've created a easy guide for picking a partner for almost any business.

To begin, I'll start by identifying the market; later, I'll walk you through the steps to choose the right provider based on your business size and goals.

First: the Market

When it comes to outsourcing your marketing, your options fall into roughly 6 buckets:

1. Freelancers: Individuals, usually working from home, that serve a variety of clients with a variety of services. You can hire locally, over the web, or from a talent agency. Freelancers are great if you have the time (and understanding) for management. One downside is the very real possibility that your "amazing" designer decides to hang it up and take full-time work.
2. The Lone Gunman (or woman): I use this term to describe the veritable army of self-employed marketing consultants. Many are good, but finding the "right fit" is a challenge if you've never engaged a marketing consultant before. Typically, a Lone Gunman provides strategic advice and direction, but not technical skills for execution. In other words, expect to hire other freelancers to augment the Gunman's core skill set.
3.  Tactical Agencies: Once you move beyond individuals (freelancers and Gunmen), you're looking at small design firms and web shops that are structured to "make things." Need a brochure? Tactical Agencies are a great fit because they'll often provide design, copy, and even web services...all under one roof. With good firms, you'll see a reduction in your management time as projects are handled by one person who delegates to a team. "Tactical Agencies" are different from "Strategic Agencies" in that they don't have a real focus on the "big picture" for your marketing; these are "doers."
4. Strategic Agencies: When you engage a strategic agency, you're looking for a partner to help "set a course" for your business' marketing. Like a marketing consultant, an agency helps create a strategy but also provides a deeper level of knowledge and multiple service-area experts. Some strategic firms also combine a level of tactical execution and measurement - in other words, soup-to-nuts marketing.
5. Boutique Agencies: With the proliferation of marketing specialization, more and more businesses realize that it's difficult to find deep expertise in all areas within one individual (part of the reason why hiring one person is so difficult). A boutique agency dedicates itself to just one or two key marketing service areas. Examples include social media agencies, PR firms, branding agencies, and SEO firms. Boutiques are a great option when your business is large enough to have an in-house marketing team, or if you have a product or service that can make a massive impact through just one marketing channel.
6. Advertising Agencies: Think "Mad Men," and Madison Avenue...only scaled down. Ad agencies tend to focus on generating new business through traditional and online advertising channels. This can be a great solution for companies that have a solid marketing strategy but need outside creative juice and media-buying savvy (e.g. the "Old Spice Ad" produced by Portland's Wieden+Kennedy). Many ad agencies make their money through markups on client ad campaigns, meaning they are incented to work with clients that have regular advertising needs.

Now that you have a sense of the options for outsourced marketing, you can begin the process of assessing which type of service provider is the right fit for your company.

If your business has an in-house designer, but no real marketing strategist, you might consider a Lone Gunman or a Strategic Agency. On the other hand, if you're a small business with few internal marketing resources, stay tuned: my next post will outline a simple methodology for selecting partners based on your goals, your business size, and marketing budget.