When should you outsource your marketing?
Updated: Dec 8, 2021
Which step to take with your marketing - inhouse or to outsource?
When small businesses reach a certain size, they think about the structure of the business and investing in marketing. It isn’t a decision to make lightly, as businesses on average spend 10% of their total company budget or 5-10% of turnover on marketing. Once you’ve made that decision, you’ll need to decide whether to have a function in-house or whether to outsource. It can be hard to decide the path to take.
Factors such as the stage of your business, how much business planning has already been undertaken, the time you have available and the support you’re willing to give, all come into the mix. But, ultimately it comes down to what is right for your business.
Where do I start?
This is perhaps the hardest part. In order to decide which marketing model to take forward, you need to know at the outset what you want your marketing to achieve. Once you’ve done this, you can flesh out the role and function of marketing, and the scope of work involved.
This should ideally be part of the business planning process and will ensure you make informed decisions. For example, are you launching a new product or service and need to make people aware of it, is lead generation the main goal and setting up a new database and CRM system, or do you need to run more tactical campaigns to help with seasonality, or create marketing collateral as part of addressing customer retention? Without knowing the skills and expertise required, it can tough to decide which route to pursue.
Having worked for many years both in-house and for agencies, I can certainly see the merits of both. I've used my experiences to examine both options and hopefully make it a bit easier for you to decide which option to implement.
Going down the In-house route
This is a permanent resource that you employ and is ‘housed’ in your business. Although with remote and flexible working, it can be less rigid and is common for individuals to work virtually. The dedicated resource means you always have access to marketing and can have a constant presence of marketing activity to run your social media and your website on a day to day basis.
Businesses often perceive this as a highly attractive, cost-effective option. You can recruit the right person with the right experience and skills at a reasonable rate, and brief them on their roles and responsibilities. Sound easy? Unfortunately, finding the right person that ticks all those boxes can be a time consuming and tough task.
It will also be a long-term investment that requires patience. It can take a considerable time for the individual to get up to speed. As an employee, they'll have lots of other hats to juggle. Plus, they can get sucked into the day to day duties and simply not have the resource or thinking space needed to plan, innovate and drive the business forward.
The other major decision is cost. As we all know, the true cost of employing someone is more than double the cost of their salary taking into account their associated overheads. Not to mention on-going equipment and training etc required.
Furthermore, this model will only work if a business are fully committed and willing to support the individual. Marketing can’t be a stand-alone function that are given a desk and left to work their magic to transform the business. They need to be given a place around the senior management table, given access to management data and have a reasonable budget to work with. Marketing budgets are typically 5-20% of your forecasted revenue so they require a lot of precision planning to ensure you get maximum return. Visit my blog ‘How to prepare a marketing budget’.
On the plus side, it will give your business complete control and accountability. You know, or can find out in an instant, exactly what is happening with any given project giving you peace of mind. And, you’re armed with the right information to make informed business decisions. By going down this path, marketing will be more of a collaborative process and in theory, a joined-up process which aligns with your other business functions.
The outsourcing route
This is the external route whereby you commission an external individual or agency to work on your business. This can be done on a one-off or rolling basis. There are so many different types of agencies, freelancers and consultants you can use today with specialist skills. Most should be able to offer flexibility with how you can use them. For example, whether you want to work on a project basis or have a retainer to work more fluidly.
The main advantages of using external resource are the skills they can offer with access to a wealth of specialists. They will also bring a high level of quality and professionalism to the table.
The other advantage to your business is the flexibility - you can switch on and off the resource when required. Although you'll pay a higher premium daily rate for their service, you’ll only pay for the services you use and of course won’t have expensive employer overheads to consider. However, do check contractual terms and notice periods.
Lastly, external resource should bring impartiality and a fresh perspective on your business. This should bring more creativity and innovation.
On the downside, you'll need to get to grips with the agency processes and accept that certain projects will take time to deliver requiring sign off and paperwork from you at each stage.
Trial some options
It certainly isn’t a straightforward decision and time should be spent exploring both options. Use your network, chat with suppliers and colleagues to get their views, and meet with local agencies to have an initial chat to see how it could work.
The other option is to test the water, perhaps work with an agency on a small project or use a freelancer or marketing consultant to work with you on a short-term basis. This way, you can test which route is the right path for you to take.
I hope this has given you a few pointers if you're currently weighing up which route to go down for your marketing. For more marketing tips please visit my blog the sharp end.