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4 reasons why an Outsourced CMO works

Should I hire or outsource? It’s a question that most early stage enterprises must grapple with as they seek to scale up rapidly on the lowest possible costs. Hiring is generally a time-consuming, expensive business and it involves risks that cannot be easily mitigated should things go wrong. Outsourcing could imply organisational and communication challenges, especially when it is for a senior role or leadership position. When a strategic role like marketing is at stake, a wrong decision can have far reaching implications that may make or mar a company’s fortunes. We are convinced that it's a good idea for a smaller business to outsource its marketing director or VP level role.  Here are four reasons why.

# 1 – Cost
The biggest advantage of outsourcing, the reason why organizations globally are resorting to the ‘shared-resource’ model, is that it helps them put a lid on costs. The all-inclusive CTC of an average marketing director hired by less than two-year-old Indian firms in 2016 was around a whopping Rs 74 lakhs, according to a study conducted by Ernst & Young. But more than the cost, what must worry fledgling enterprises is the E&Y finding that of all such top-dog marketing managers hired by young companies, only 28 per cent stayed with them beyond two years. In other words retaining high profile marketing professionals is an even bigger challenge than finding and funding them.

Cut to chase, what does a marketing director, classically an IIT + IIM grad with say about 10 to 15 years of senior experience at medium to large companies expect to do in a start-up? This is what it is in our view:

  • Direct and oversee marketing policies, objectives, and initiatives
  • Conduct market research and develops marketing plans for specific products, services, or business lines
  • Recalibrate marketing plans in line with changes in the marketplace and industry

While they may be good at these strategic functions, most high profile marketing directors are neither open to nor indeed in many cases capable of going beyond planning to the granular level of driving operations hands-on and executing the plans. Most directors of marketing will manage the overall plan which is great if you can afford one exclusive highly paid resource in addition to hiring several other executives to help him put the show on the road...that is translate the plan into action. It’s a catch 22. Most small businesses can’t afford both a Director of Marketing and a junior execution person.

On the other hand, almost every small business needs at least one junior marketing person to execute on a daily basis. Junior marketing people might be great at executing but that person is generally NOT good at developing the strategy – they have neither the experience to plan nor the gravitas to take tough decisions.

Hiring an outsourced Marketing Director to do yearly planning, quarterly reviews and weekly keep-on-track meetings is much less expensive than hiring a full-time Director of Marketing.

#2 - Strategy
Most small and mid-sized businesses are undermined by the lack of sound strategy-driven marketing. Even the world’s best execution team cannot help a company if there is no strategy behind its tactics. Strategy starts with understanding who your ideal customer is and why you are different.

To come out on top in the modern business paradigm companies must opt for a content-based marketing approach, focused as specifically as possible on a few ideal customers. This is what yields the best returns.  That is a straw approach has a much better chance of succeeding than the ‘traditional’ funnel marketing.  When you communicate through a straw with a very specific message the customers are much more likely to listen because you ‘know’ their problems and frustrations and can have very high value conversations. The flip side is that such an approach calls for a fairly advanced level of strategic thought of the sort only an experienced marketing director can bring.

The second piece of strategy is being able to differentiate yourself from your competition. According to the new bestselling sales book, The Challenger Sale, only 35% of companies manage to truly differentiate themselves.

When you opt for an outsourced marketing head you have the freedom to change from one to another with minimal pain until you find your ideal man: a strategist to help you identify both your ideal customer, discover or create your differentiation and at the same time see your plans through to the last link in the execution chain.

# 3 - Out of the Box Thinking
Typically an Outsourced CMO will have a broader range of experience to pull from just because he works with a variety of companies. An experienced marketing person can assimilate what he has learned in other industries and help you think outside of the box. Additionally, because he is likely engaged with other clients when you hire him, he can immediately bring to-the-moment experience as to what is and is not working from a tactical point of view.

# 4 – Fresh eyes
Finally, (and this is probably the biggest advantage)  an Outsourced CMO will bring multiple sets of a fresh eyes to your team, because with this one single hire, you are in fact bringing into your organisation a whole network of vendors and niche experts that he works with. A new outlook on old ideas can really help invigorate a company.

In summary, if are running a business that does not have that  extra fat buck to burn on a full time Director of Marketing or  you do not know who your ideal customer is and your differentiation, consider hiring an Outsourced CMO leader instead of making a costly hiring mistake.

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