A number of years ago, IDC shared how B2B companies allocate their Marketing talent across the various Marketing capabilities. Many SMEs and specialized divisions within larger companies only have headcount for 1-3 people. With such low numbers, their lean internal Marketing teams rarely have all the needed skills. The investment to fill all of these roles with people internally is prohibitive for many Marketing organizations, especially small to mid-sized enterprises (SMEs).
Consider the salaries alone. According to Inc. Magazine, the average salary for a Marketing Manager is $120,000 per year, and the average salaries for other Marketing professionals can range from $50,000 to $60,000 per year, making expansive in-house Marketing teams a significant investment of both money and time. Adding new people takes time – recruiting time, interviewing time, learning curve time. Often, this process can consume 8 or more weeks. Precious time when you are trying to spin up a growth initatiative.
When budgets are lean, additional headcount can be even harder to come by. In their 2016-17 CMO Spend Survey, Gartner revealed that “while the majority of marketers expect increases in 2017, 14% are bracing for a cut. This is up from only 3% who expected cuts in the 2014-2015 survey and is the highest reported percentage in the survey’s five-year history.” So, what is the implication of this potential shift? In short, Marketing and business leaders may need to rebalance their in-house/external talent mix.
Why You Should Focus on Talent from the Outside
Outsourcing is an effective way for SMEs to match the numbers of in-house marketers that their larger competitors maintain. Outsourcing helps SMEs act “big” by giving them access to the same economies of scale, efficiency, and expertise that large companies enjoy. To ensure your outsourcing efforts pay off, take a deliberate approach and build a network of Marketing partners. A well-designed network of partners helps you expand your Marketing expertise cost effectively.
Outsourcing also converts headcount into a variable cost. Leveraging capable external talent enables you to tap experts when you need them rather than keeping specialized talent on the payroll. When you create a Marketing team comprised of partners, you can increase your effectiveness and efficiency because you can scale without hiring or training staff.
This is especially effective for short-term or point initiatives, such as research associated with validating new products, assessing new market opportunities and improving customer experience. Additionally, having a team of Marketing partners helps you increase your bandwidth making it possible to address new initiatives quickly while still allowing you to focus on where you are needed most. In essence, the right external team is the hammer that will help you strike while the iron is hot.
What is the Right Team of Marketing Partners?
Odds are that no single entity will fit all your Marketing needs. Realistically you will need a variety of partners. For most SMEs this means selecting among freelancers, independent contractors, and boutiques to support their needs. But how you decide which option(s) is best? You can begin by asking some key questions such as:
Should you employ independent contractors or a firm?
Should you employ a consulting firm or an agency?
Should the firms you employ be niche boutiques or one of the big firms?
Next, you need to understand the value of each type of entity.
The value of independent contractors is in their depth of expertise in specific areas such as research, product launches, or a particular vertical or industry. This is, however, a double edge sword. Because independent contractors are often experts, they are limited by their specialty and their own bandwidth. An independent contractor may not be able to provide everything you need.
Boutique or niche firms offer an excellent and often comparably priced alternative to both independent contractors and large firms. These firms typically specialize and can therefore offer in-depth expertise in a particular domain. This specialization enables them to come up the learning curve relatively quickly. Generally, boutiques can offer a broad array of services around core competencies and provide customized solutions. Boutique Marketing firms address a variety of Marketing capabilities, from research to strategy to tactical execution, from writing, graphics, and events to digital marketing. These firms are ideal for point projects. Plus, boutique firms typically have a lower fee structure than the large firms, and they will be able to provide you with greater access to their top talent and teams of experts.
Larger Marketing consulting and/or agencies may have a national or international scope and offer highly diversified services. This is their double edge sword. These larger firms may provide one stop shopping. They also often come with increased overhead costs due in part to high level executives earning substantial salaries. Keep in mind that their top talent is often on the hunt for the larger-scale, longer-term projects with larger enterprise level customers. Unsurprisingly, these large scale projects often require extensive resources from the firm, which can potentially result in lower quality or junior staff being available for smaller point projects and/or customers. As a result, these more bureaucratic firms may offer a broad range of services with limited available expertise.
Should you decide to go with a boutique Marketing firm, you will most likely need both consulting and agency firms. It can be confusing because more Marketing consultancies are hiring pure-play creative people. At the same time, more agencies are hiring pure-play analysts and strategists. It sometimes works well. But sometimes not.
Why not? We can borrow from our own world of Marketing and Sales. These two revenue generating functions have very different purposes requiring very different skills sets. When a company combines the two into one function, the function tends to lean toward one direction or the other (typically toward the passion and expertise of the leader). If a Sales person is at the helm, the function tends to lean more toward Sales. In this scenario, Marketing can eventually become Sales support. The same is true of a vice versa situation. Clearly, just as you need both Sales and Marketing you most likely will need both consultants and agencies.
While, the lines between these areas of expertise are blurring, I believe that few niche firms can truly and successfully be a “jack of all trades”. It is my experience that stellar consulting firms focus on analyzing the problem/gaps/opportunities, provide expert advice on the solution and/or solution options then support the implementation of the solution. And that stellar Marketing agencies (and they come in all flavors) create and execute marketing campaigns/programs that bring awareness, engagement, and consideration strategies to life. Both types of organizations, however, should be committed to helping you grow by finding, keeping, and growing the value of your customers’ customers.
The key to building a strong ecosystem of Marketing partners is to have enough of the right people with the right skills from across all the Marketing disciplines to positively impact the business and enable your business to achieve its outcomes. I personally believe in choosing partners who excel at their craft.
A good metaphor for this can be found in the construction industry. Do you want the guy who is a really good electrician to be the guy you hire to paint your house? Probably not. So, unless you truly need an area of expertise on a daily basis, having a partner Marketing eco-system gives you the best of all worlds – expertise you can tap into when you need it and that is also pay as you go.