The reasons for outsourcing your insurance software hold true for your marketing too
Following on from our previous post ‘Top 6 reasons for brokers to outsource their insurance systems‘, we take a look at questions insurance brokers should consider in respect of outsourcing their marketing.
There are both strategic and tactical reasons why a business might decide to outsource anything. At a strategic level, many companies choose to outsource any activity that is not core to their business. For example, insurance expertise, sales development and customer relationship management are central to an insurance broker, but building, developing and maintaining its insurance software may not be.
At the tactical level, insurance brokers often don’t have the marketing knowledge or resources to run an effective marketing program.
So, how do you work out whether to outsource all or part of your marketing or keep it in-house? Below are 10 rules to run across your business.
1. Do you have the expertise or bandwidth?
Contrary to popular opinion, marketing is all about the science and less about the art these days. In the pursuit of ever more effective marketing in a world saturated with advertising, marketing has become highly measurable and highly sophisticated.
For marketeers this means everything from customer research through to data analytics has become a much more scientific process. As a consequence your average marketing department might require a wide range of expertise – strategists, analysts, technologists, product specialists, communications professionals, creatives, brand managers, event organizers, e-commerce experts, advertising specialists, telemarketers, copywriters and partnership managers to name but a few.
If your business does not have enough people with the marketing skills you need, then you should consider outsourcing.
2. Do you have the right technology?
One of the by-products of a much more sophisticated marketing environment is that technology has become essential in the planning, execution, managing, tracking, analysis and reporting of marketing activity. This is particularly the case for digital marketing activities, but is really the case in general across all media. Without the technology it is easy to lose or waste a significant portion of your marketing investment.
Getting access to an integrated, technology-rich set of marketing applications can be an expensive exercise, particularly for the smaller business. It is therefore often a better solution to find an outsource partner with the technology in place for the relevant marketing functions or activity.
This is usually the most cost-efficient way of getting access to the marketing tools your business needs, while at the same time enabling your marketing team to build their experience with the technology. This opens the door for your business to bring the technology in-house at some point in the future with reduced risk.
3. Do you want more variable than fixed costs?
The largest portion of a functional marketing budget goes on fixed costs in people, systems, and facilities. For businesses with limited budgets, or the need to quickly adapt to changing market conditions, outsourced services can provide much higher levels of flexibility.
Although there is obviously a cost to using outsourced services, often you are avoiding the ‘hidden’ costs associated with maintaining, expanding or contracting the marketing function and its assets. An outsourced marketing agency effectively covers the risk and cost associated with changes to your business and marketing strategy.
4. Do you want to develop your IP?
One of the benefits of outsourcing a marketing function such as PR, Digital Marketing or Search Engine Optimisation is that you are almost certainly handing it over to a company with a wealth of experience in the field.
One of the benefits of this from the business’ perspective is that your employees get immediate access to the IP that the outsourcing company has developed. To build this IP from scratch in-house would take time and inevitably money, and can also involve some risk too.
5. Do you want to focus on the business-critical activities?
In any business there are people whose roles are critical to the business and its IP. Those responsible for product, pricing, analytics, promotion, sales, channel and customer relationship management would be great examples. They hold the bulk of the collective experience of your business.
There are other who are more activity orientated, managing processes, activities, and events. These may not to be business-critical activities if they don’t add anything of substance to your business IP, and thus would be ideal for outsourcing.
6. You want to grow quickly?
If you want to grow your business it is usually faster and sometime cheaper to outsource new roles or processes. This removes the recruitment, training and knowledge building phase of setting up a new function allowing a business to get to market quicker. The challenge then is to determine the best time and framework for pulling relevant functions, and IP, in-house.
7. Are you launching a new customer channel?
Very often launching and marketing a new channel needs expertise that many businesses simply do not have. For many insurance brokers, launching ‘direct online’ services will fit into this category. Deploying internal and experienced outsourced resources to support the launch of the channel is a great way to gain experience and achieve a successful outcome at the same time.
If you would like some help and advice in relation to outsourcing any of your marketing functions, please visit our insurance marketing website.