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Outsourcing Marketing
This is the first of two articles on outsourcing.This
issue will look at the outsourcing of marketing and November
will look at outsourcing sales.
Why Outsource ?
Outsourcing has become commonplace for software
companies to consider in order to lower costs for programming.
Indeed the Indian subcontinent has emerged as the global
centre for lower cost programmers for many diverse
applications. The business benefits of lower costs are
transparent. But there are many other areas of running a
software business that could be outsorced, including those
which outwardly appear to be germane to the
business.
The Elements of Marketing
Of
all the elements in our industry this is probably the least
understood, particularly by smaller technology companies.
Often perceived as “promotion” but more disastrously used
synonymously with “sales”.
The best definition of Marketing that I have come
across is:
MARKETING is identifying the unmet needs
of the buyer.
These needs are then met by producing
products and services that are so positioned effectively to
the buyer by appropriate pricing, distribution and promotion
that generate a profit.
Meeting the Needs of the
Buyer
Recently a CRM software vendor with a £8million
turnover approached SSP.This company’s Managing Director,
highlighted that they needed to generate more prospects as
their sales cycles were lengthening and the number of
prospects were declining.
It
would have been very easy to conclude that they increase their
promotional activity by way of direct mail. However, after
probing a little deeper as part of our initial analysis and
discussion we discovered that lack of prospects was only a
sympton and not the problem that really needed to be
addressed. What SSP did discover was the folowing:
- They did not know the size of their potential
market
- They did not know their market share
- They did not know why their own customers had bought
from them
- They did not know whether they were losing market
share to competitors
- They did not know whether ANYBODY in their
marketplace was buying their type of software.
Now this company had a “marketing” department that was
in effect a creator of collateral and had no strategic
function whatever.
Clearly our message to this vendor was that they first
of all needed to genuinely understand their buyer, who they
were, and indeed whether they had a need for their product or
service. So what could be outsourced in this very common
scenario.?
- Appoint a Non -Executive Director
who can ask the same questions (Reality check) to
make sure that business fundamentals are practised
- Get an external organisation to do the
basic market research to find out whether the buyers have stopped buying
or are buying from someone else. Also get that that same
oragnisation to find out from your customers what they like
,dislike about you as a vendor.
- Get the Non-Executive Director.to work with the
Managing Director and “Marketing “ department in drawing up
a marketing plan with the details of who the buyer
is, how they buy, how they are influenced and how they will
find out about your product and services
Promotion
This is one area that has been traditionally
outsourced to external sources such as Advertising,Public
Relations,Web Site design and Maintenance and Colateral
creation. However as illustrated earlier each of these
elements needs to be understood in relation to how they will
be positioned to the buyer.
Recently one of our clients showed us a magnificent
eight -page five colour “coffee “ table brochure that was of a
unique and non standard size. It was clearly designed to
create an “image” of success and was extremely expensive to
produce. Unfortunately, all of their customers and prospects
were “early adopters” and wanted detailed functional
details in any literature, most of which they expected to get
from our client’s web site. This brochure was a total waste of
money.
Equally when the buying decision moves from technology
to “political” then the influences on your buyers broaden so
often the issue is not whether to outsource but whether or
when it is appropriate. Our guideline as to when the
type of outsourcing is appropriate would be as
follows:
Early Adopter Buyer
Topic
Outsourced
Type
Market Research
Software
Consultancy
Marketing Plan
Software Consultancy/Non-Executive Director
Web site information
Design agency
Creation of User stories
Public Relations
Fact sheets
Design Agency
Product Information brochures
Design agency
Flyers
Design agency
Mainstream Buyer (additionally to Early
adopter)
Topic
Outsourced
Type
Seminars
Marketing company/seminar organiser
Editorial
Public Relations
Advertising
Public Relations
Image Brochures
Design
Agency
This list is by no means exhaustive and budgets will
of course determine what is appropriate for your company.
So what do we
own?
Potentially it is as feasible to outsource many of the
functions of marketing as it is for programming.The
ownership that is vital to be jealously protected is the
knowledge of your buyer,
Who are they ? How many are there? Are they buying ?
If so who from whom?. How will they buy from us? These are the
questions that you must continually ask and be brave enough to
get honest answers so that your sales strategies are in
alignment with your marketing. Are yours?
SSP is continuing to help
companies grapple with the challenges that confront software
companies in today’s markets and further details on our
training courses and other services can be found at
www.sspltd.com | 
