03 May Sourcing Marketing Services: 3 Reasons Medium Sized Enterprises Struggle
With the hundreds of thousands of marketing service providers available, you’d think that sourcing marketing services would be easy for medium sized enterprises. But as a general rule it’s not. In fact, it’s something that most struggle with. In this article, we’ll explore the three main stumbling blocks common to most medium sized enterprises and look at what they can do to get around them.
How do you know what marketing services you need?
This reason is typical of the smaller medium sized enterprise, where there is either no dedicated in-house marketing function or just a single marketing generalist who (through no fault of their own) lacks the knowledge or experience to define exactly what type of support the business needs in the first place.
Define how best to reach your customers
Defining the optimal marketing mix (how best to reach your customers) is the first step and needs to be done by a senior marketing figure, either in-house or a consultant or strategist from an agency. Once you have a marketing strategy and plan in place, this provides the framework for sourcing service providers to deliver it.
Then what type of marketing service provider best fits your business
In addition to knowing what type of services you need, you’ll also need to define the type of provider that should be sourced to offer them. Some of the criteria here will include whether they offer several capabilities you need or specialise in one, their business size, their capacity for scaling work volumes up and down according to your business requirements and their cultural fit with your business.
Investing in the kind of expertise and experience required to understand and plan this stage is essential to avoid wasting money later on because the wrong providers have been selected or the approach to marketing is not joined up.
How do you know what to pay when sourcing marketing services?
In a similar vein to the previous reason, experience and expertise allows a senior marketer to have a basic understanding of what things should cost from different marketing service providers. However this is not enough, nor should you expect one marketer to know the going rate for every single thing when sourcing marketing services. Instead, relying on a robust procurement process is a far more effective way to ensure you are balancing quality and value.
Minimum quality standard not maximum cost
For every service you need to source, you should begin by establishing the minimum acceptable quality standard you could accept that would meet the marketing objectives for that tactic. By beginning with a minimum quality standard, rather than a maximum price you can afford, you are prioritising efficacy over cost and ultimately ensuring that you should see value from your investment. Put simply, anything cheap that doesn’t work is still a criminal waste of business resources and ultimately qualifies as expensive as you get nothing back for your investment.
Flex the plan not the standards
Medium sized enterprises are generally budget constrained to a degree and often time poor with it, so your procurement process needs to accommodate both these elements. Your marketing plan should allow for a degree of flexibility and prioritisation.
To give a simple example, if your plan originally specified 10 different marketing services but once you gather quotes from providers who meet your minimum quality standard you discover your budget will only stretch to 5, your plan should be able to adapt to accommodate this and inform you as to the optimum 5 to invest in.
You’ll also want to have defined structure around how you source quotes and vet providers as this will speed up the procurement process whilst ensuring you have the level of information you need to make a sound decision. Generally obtaining 3-5 quotes per services and having a standard set of non-service specific questions that are important to you is a good place to start.
How do you maintain a manageable number of service providers?
The final piece of the puzzle usually only becomes a pain point after the initial selection process has been completed. Even of you’ve overcome the first two roadblocks and assembled yourself a set of excellent specialists service providers that meet your business and marketing requirements, they’ll still need managing and this is an area where the wheels come off in larger medium sized enterprises.
Management as a service
Often medium sized enterprises choose to try and manage a larger number of supplier relationships to keep costs down. This can be a smart strategy in the early days as a small business when you have more time than money and are very closely connected with every element of your business. However, as the business grows this starts to be inefficient and prevent key actors within the business from doing what they need to do to develop and expand the business. At this stage, marketing management becomes a desirable and useful service in and of itself.
Choosing who wears the hat
At the point where you realise that it no longer makes sense for you to manage relationships with 5-10 different marketing service providers, you need to source some form of support. In this you have three main choices; hire a senior marketing manager who’ll take over these relationships from you and drive your marketing strategy, recruit a marketing consultant to provide the same level of support on a freelance basis or move to an agency that offers everything you need under one roof.
We’ve written a whole different article on how to decide whether you need a marketing agency, consultant or in-house marketer, so we can help with that decision too!