Date Added: August 2005
In times of budget constraints, marketing is often one of the first departmental budgets to be reduced. Many view marketing as a "sunk cost," rather than an investment in the future. This leads to a lack of marketing programs, which can be detrimental to organizations.
In situations when budgets are reduced, those involving mergers and acquisitions, or for companies with less than 50 employees, outsourcing marketing activities could be a viable solution because it is a lower investment with larger results.
Mergers and acquisitions are stressful endeavors for all companies. The pressure of solidifying a unified company from two separate entities requires time and patience. Companies need to monitor the progress of an acquisition while aligning two corporate strategies and cultures. To ease the acquisition demands, more companies are outsourcing marketing - saving money and precious time.
Marketing has the important task of closing the customer gaps when two companies align. Marketing firms offer expertise, as many have guided companies through the merger and acquisition process. This strategic advice is also a cost-effective solution, as outsourcing is a lower investment than having a full-time marketing employee perform similar duties. Thus, outsourcing allows company leaders to maintain their energies on core strategies and processes, rather than assimilate customers and departments.
Companies choosing not to outsource during an acquisition could lose valuable customers to competitors, resulting in a failure to meet business profitability projections. If an organization's core focus is on the integration of the acquisition, customer needs may be ignored, resulting in impatient customers. Many full-time employees do not have the time to successfully integrate with other corporations, in addition to performing their regular duties.
Similarly, small companies also may find it cost-effective to outsource all or some of their marketing projects. Smaller firms may have a marketing director to supervise marketing programs, but may be unable to successfully execute the strategies. These companies have limited resources, making them ideal for outsourcing. It is less expensive and more efficient to hire an external resource to execute, rather than having a full-time employee attempt to oversee the department and perform all marketing functions.
For instance, if an organization has a marketing director and another marketing employee, that company may be understaffed to achieve a successful marketing program. There are not enough resources (e.g. people, budget) to exercise all activities in a marketing plan, as well as daily tasks. The firm could hire another marketing employee to fulfill their needs, but this is rather costly. Instead, the firm could outsource some marketing activities at a lower investment, and still maintain the same - or better - results.
Firms can choose to outsource all marketing efforts, or specific projects. When deciding on an outsourcing partner, ensure the organization's beliefs and values align with your company, and the outsourcing partner collaborates with your business goals. The objective should be to set-up a long-term partnership. Typical projects that companies outsource are:
Even larger organizations can benefit from outsourcing. By outsourcing marketing services for the above-mentioned projects, larger firms can focus entirely on executing their strategies. This is beneficial because it allows them the time and energy to implement all aspects of a marketing plan to guarantee success and grow profitability.
1 Fielding, Michael. "Outsource firms keep marketing consistent during M&A process." Marketing News. April 2005: 27.
2 Linder, Jane C. "Outsourcing Integration." Harvard Business Review. June 2005: 19.