Marketing Outsourcing: A New Reality

    February 20, 2004

Despite the downturn in the economy, businesses must continue to market their products and services. But the way they do this has changed. The hope is that this may only be a temporary slowdown, but at the very least, the economy is more uncertain than it’s been since the early 1990s.

How do you manage your small company’s marketing plans and budgets in the midst of such uncertainty? Do you increase marketing spending to try to offset declines in revenue? Cut back on marketing budgets in anticipation of lower sales? Reach out to new customers? Change your messages and promotions?

If there’s one thing the current recession has done, it’s to spotlight the need for return on investment on marketing spending. With every corporate expense coming under the examination, marketing dollars are no longer immune from the demands of accountability and performance. Management wants immediate return on investment, in many cases payback on the marketing investment within a 12-month period, or less. In terms of specific results, serious questions are being raised about sales and marketing delivery versus spending. Was that expensive sales collateral material really necessary? Has advertising spending really resulted in a significant increase in brand awareness? How effective has that direct response campaign been in generating qualified leads? How effective is the sales function in converting leads to sales?

Many businesses that have cut back on staffing are finding new, even more experienced talent through professional interim staffing firms and hybrid marketing firms, like Matrix Marketing Group. More small business and start-ups without funding and larger companies with hiring delays are using outsourced marketing personnel to meet aggressive revenue goals and launch products. Without time to form their marketing strategies or wait for the right permanent hire or hiring costs, start-ups and Fortune 1000 companies say flexible outsourcing solutions from Matrix Marketing Group help meet their current marketing requirements and eliminate potential costly full-time hiring.

In addition to the number of experienced consultants now available in the market, the number of outsource staffing companies that place consultants is increasing, providing experienced part-time or full-time staffing for important projects that are necessary for businesses to grow.

Many full-time marketing and sales positions are now being performed by consultants who are specialists in industry sectors, or are experts in specific areas such as branding, product marketing, public relations and executive marketing management.

There are several advantages to outsourcing specific responsibilities in the marketing and sales department. A primary advantage is that outsourcing provides the exact expertise that a business needs, when it is needed most. When that need has been met, there are no strings attached.

Another reason to use outsourcing is to develop or implement a specific marketing project. If a company needs a specific task done, needs business processes put into place or help for a specific period of time, then outsource staffing is an ideal solution. Some of the tasks that are well-suited for outsourcing include:

– New product launches

– Marketing strategy

– Public relations

– Business and marketing planning

– Corporate messaging frameworks

– Research and analysis

– IPO preparation

– Development of reseller and distributor programs

– Agency management

– Development of training programs

– Branding

– Development and management of a website and e-commerce programs

– Business development

– Sales management and sales process development

– Development of internal communications programs

While many staffing firms sell and price their services using a traditional hourly rate, Matrix Marketing Group, a Fort Collins based marketing and consulting firm, is carving out a niche by offering a full-service marketing outsourcing and pricing services in a modular fashion and on a fixed price basis.

“Most small and emerging companies want proven, predictable solutions and pricing for their business,” said George Schildge, president of Matrix Marketing Group. “Seventy percent of our business is fixed price for the small and start-up businesses. They want to know the exact cost and what they get for it.”

Schildge adds, “For example the release of our new Pay-for-Performance Public relations program designed for small and mid-sized businesses where clients pay fixed fee for results.”

A company’s growth stage is another critical factor for choosing to outsource. Some companies hire interim staff to fill a specific role as their needs dictate until they can afford to hire at the level they need to on a full-time basis.

Well-established larger companies demand that executive-level positions be part of their full-time staff, while smaller growth firms see an advantage to outsourcing this function.

“Often a smaller firm cannot afford to get the executive-level help they need, so they hire an outsourced marketing and sales executive to launch the company,” says Mike McDonald, president of M.W. McDonald & Associates.

“In fact, we talk with a lot of venture capitalists who are interested in filling executive-level positions for a short period of time to launch the company. They want experienced individuals who know exactly what needs to be done, and have done it before successfully.”

“Many companies that have cut staff during the past years don’t want to commit to head count, but they still have demanding projects that need to be done,” McDonald says. “Outsourcing provides an ideal solution.” Schildge continues, “small business are now learning that by cutting marketing resources, companies are cutting the one function whose sole purpose is to sell more of that company’s products. Of all the times to stop investing in those activities designed to sell more, it would seem that a recession, or period of soft demand or uncertainty, would be the worst. Yet companies do it all the time.”

“We see outsourcing as a leading economic indicator of the economy. As the economy picks up, you can also expect to see the number of businesses that hire consultants and interim help rise as well.”

About Matrix Marketing Group Matrix Marketing Group unlocks the profitable growth potential in companies. They specialize in helping start-up and small businesses improve business performance and maximize revenue by increasing their return from their sales and marketing investments.

Matrix Marketing Group is unique by providing a greater range of marketing services than independent consultants, but more affordable than traditional marketing agencies. We combine the personal attention of a smaller firm with the scalability and breadth of expertise of a larger one.

George Schildge founded Matrix Marketing Group, Inc. As the company’s
president, his vision is to ensure top-notch sales and marketing firm to
Matrix Marketing Group’s clients. Schildge’s professional offerings focus on
the measurable skills, experiences and return-on-investment needed to
enhance a company’s value to its clients and drive business results.