Over the past three weeks, I've had a couple of in-depth conversations with business leaders about whether it's better to get a jump start on your marketing automation initiatives by outsourcing to an agency or to develop the organizational capacity in house.
It's a fantastic first question to ask as you begin your demand generation journey because it's one of the first forks in the road that lead you towards different outcomes later on.
For the purposes of this discussion, I differentiate marketing automation as a set of technologies that enable different pieces of your demand generation strategy. Regardless of whether you outsource or bring it in-house, it's critical that you own the demand gen strategy for your own company and not leave it to an external vendor to define and maintain your marketing vision.
When to outsource your marketing automation function
1. When it's not core to your business
2. When speed of deployment is a critical issue
3. When you need to prove success to your management team or Board before they commit to a long term strategy
4. When you can't find the right people to hire or train internally
5. When budget/cash flow is not a major issue
6. When you have the ability to manage the vendor and hold them accountable for results
7. When technology vendor selection is not key to your long term success
What type of partner do you need?
You also need to determine what type of vendor or consultant you need to hire to help you. Most vendors have a core competency -- creative, IT integration or business process transformation. Here are some questions to ask:
1. Does your vendor need expertise with a particular product?
2. Are you looking for someone with local presence and support?
3. Do you need training services?
4. Do you need someone who can help you plan your requirements before you buy technology?
5. Can you do a small pilot project first before you commit to large, ongoing costs?
6. Are they getting paid by anyone else associated with your project?
Be careful about signing up with a vendor who promises that they will run all marketing servces on your behalf, then gradually transfer the knowledge over to your team. First of all, this is so rare that most services companies don't do that kind of education and training. Secondly, their business model likely depends on a retainer or ongoing projects, so they are not as incented to hand over their organizational expertise to you. If your plan is to outsource first, then bring it in house, make sure you have a plan and proposal up front from your services vendor before you lock in to a contract.
And, if you aren't prohibited from doing so, a good first step would be to hire people from your vendor's project team to work for you.
When to build your organizational capacity in house
1. When marketing automation is essential to your business, such as when marketing owns sales quota or marketing staff is compensated based on revenue production
2. When you have specialized requirements that outside agencies don't have the capacity to support
3. When the organization has committed to success in the long term and understand that marketing automation is part of a larger change management initiative
4. When you have the abilitity to manage a team of experts
5. When you need tighter control of costs
6. If you are providing marketing services to an outside customer or client