Every company is considering cost-cutting and streamlining operations to weather the storm of business closures due to the Covid-19 downturn. Even those companies whose workforce is able to continue working remotely are belt-tightening. And wisely so. Published estimates of the cost of the pandemic range from $3.3 trillion, if it’s controlled and we are back to normal in 12 months, to $7 trillion if it takes three years. Everyone is going to be on a fiscal diet.
Not good news for Marketing. As a technology marketing veteran, I’ve watched the economy recover after 9/11, the 2008 crash, and several smaller ups and downs along the way. But nothing has been quite so devastating as this. In a recent survey that we conducted with one of our clients, Fortra Search, we surveyed Silicon Valley tech CEOs and senior executives to get their outlook on the business impacts of the virus. One of the things that came to light is that they are all looking at streamlining costs, and forty-seven percent (47%) said that the first place they’ll be forced to cut is Marketing. But, marketing is designed to support the sales process. So, how can a company stay relevant in the marketplace without a marketing team to create demand for its products, or building its brand? For some companies, the answer can be outsourced marketing.
To determine the right mix of marketing resources consider where your company will be when the economy begins to recover. Companies will likely fall into four categories, each with a different approach to marketing.
Although it seems counter-intuitive, external marketing resources can actually be a company’s most cost-effective approach. We ran an analysis of the cost of a completely outsourced marketing organization vs. an in-house marketing organization. Both teams have the essential team members for cost-effective, sales-oriented marketing. In our simplified model, outsourced marketing can save over seventy-percent (70%) in employee costs alone, and often have access to more seasoned marketing resources. We used average U.S. salary data and calculated federal and state taxes as well as the cost of benefits to get an overall cost.
Of course, different markets have different salaries and benefits costs. But the general savings dynamics still apply.
Redirecting budget toward outsourced marketing resources also saves money that can be reallocated toward program costs like media or investments in content, virtual events, or your website.
We’re not recommending that you replace your entire marketing team with outsourced talent. But a dedicated agency can bring new perspectives, deep understanding of the marketing craft especially in rapidly evolving areas like SEO or Social marketing, and can work side-by-side with your internal team to maximize results. Most of our clients don’t need every practice that an agency like ours offers, and most have an internal marketing leader, CEO or Founder that works with the agency team. Budgets and requirements vary based on actual company needs, but in general, we have found that a mix of internal and agency resources leave more budget for programs, and result in stronger pipelines and brand.
While it may seem like hiring an agency is exactly what you can’t afford to do, be sure to run the numbers. You may find that you can’t afford not to. Read more about KTC on our website. www.ktcmarketingandpr.com
DATA IS THE AVERAGE FROM GLASSDOOR AND G2 CROWD, CONSIDERING ALL U.S. REGIONS.