Insourcing vs. outsourcing in multichannel marketing
In general, marketers are good at managing their marketing systems in-house on a day-to-day basis. But the skill sets used to create day-to-day reports and analyses are different than those needed to assess the information in a database to make decisions about how to track customer behavior, what data is needed and how to attack the marketplace.
While company marketing departments have plenty of talented creative types, they may lack the left-brain analytics needed to better understand their customers in today's information-rich, multichannel environment. Add to that the fact that critical IT resources are often tasked with a company's financial and operational systems, thus leaving marketing out in the cold. For this reason, the outsourcing of marketing activities is catching on.
What marketing functions should be outsourced? Many marketing and advertising functions can and have been outsourced with varying degrees of success. From the most strategic elements like marketing strategy and program planning to the more operational and tactical elements such as customer database and customer analytics, all aspects can be outsourced.
By far, one of the most outsourced functions is the creation and ongoing maintenance of analytical and marketing execution capabilities. It seems to follow that with the focus of IT staff on business operations versus marketing, CMOs would outsource their operational needs to a vendor.
This has resulted in an increase in software-as-a-service (SaaS) providers and lets the marketer focus on customer segmentation, customer management, and program/campaign execution and measurement, while the outsourcer takes care of all the technology and related support services necessary to compete in today's demanding marketing environment.
In these situations, companies have had success outsourcing customer database hosting/management, customer reporting, customer analytics including advance modeling and statistical services, and overall support for the marketing lifecycle.
The biggest issue with CMOs outsourcing any part of their business is a sense of lack of control. While at one time things like data security and other factors might have discouraged companies from outsourcing part of their marketing process, off-the-shelf, inexpensive technologies can not only solve the problem today, but for many companies, the security and checks and balances of SaaS and marketing service providers are often much better than company processes and policies.
It is a common sentiment that if a person in another office or firm is doing the work, they won't be as responsive, or will attempt to point a finger at another firm for problems. The comfort of having a person in the same company, though, is most often over-rated. Several CMOs and marketing executives have been very public about their increased sense of control, saying things like “if I call our marketing partner even off hours, the CEO or account manager will get back to me within hours, something that would not be possible with a fully in-sourced solution.”
Michael Caccavale is CEO of Pluris. Reach him at email@example.com.