A whopping 68% of companies struggle to generate leads, according to a Lattice Engine/CSO Insight study. It’s hard to shift your thinking from quantity to quality when there’s simply not enough volume in your revenue pipeline.
If demand generation were easy, every B2B marketing organization out there would be hitting home runs on demand. While it’s much easier to scale multi-channel demand thanks to MarTech, it’s still a lot of hard work and effort. As a result, some brands are choosing to outsource some or all of their demand generation activities.
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In this article, we’ll explore the pros and cons of outsourcing demand generation, so you can get a better idea whether or not outsourcing some, or all, of your demand generation activities is a good fit for your organization.
The Pros and Cons of Outsourcing Demand Generation
One study by Ascend2 revealed just 37% of organizations were solely reliant on in-house resources to manage marketing automation, with the majority (63%) outsourcing some or all automation responsibilities. However, a mixed approach to outsourcing and in-house work is increasingly common across demand generation disciplines.
Why Companies Outsource
Ultimately, the right approach to outsourcing, insourcing, or a combination depends on your organization, your priorities and your motivations for working with a third-party. No two companies are the same and your experience with outsourcing will vary depending on your own expectations and the party you choose to partner with.
4 Common Motivations
1. Lack of Manpower
Demand Generation can be extremely time consuming and difficult. For a small business or one that is already struggling with funds, there simply may not be enough seats on the marketing team to orchestrate a demand generation strategy. Nick Iyengar writes in MarTech Today that “finding quality talent” is a top challenge for digital marketing, resulting in too few employees to carry the weight of generating demand.
2. Lack of Funds
While the majority of organizations are securing more demand generation budget for the year to come according to Demand Gen Report, it’s not always enough. Organizations may believe or discover that outsourcing can make the most of a flat or insufficient budget.
3. Lack of Expertise
To properly generate demand and orchestrate multi-channel campaigns, your employees must have a wide knowledge of MarTech, analytics and other digital capabilities. Once again, there’s a massive skill shortage afoot. Some companies outsource due to a talent gap amongst their employees and difficulty hiring the right MarTech and analytics talent. For others, the broad expertise offered by agency outsourcing is simply cheaper than trying to hire several experts.
4. Lack of Results
Sometimes, the organization will have already exhausted all the resources within their grasp and they are just not getting the results they wished for. They may have even tried hiring new employees within their company or invested in smarter technology with limited returns on investment. Lack of results is often related to a lack of knowledge, in which case a third-party may seem like the right road to better returns.
Advantages of Outsourcing Demand Generation
When B2B marketers are happy with their decision to outsource, what are the most commonly-reported advantages? While most experiences with outsourcing include both positive and negative factors, some frequently-stated pros of outsourcing can include:
1. Expert Assistance
Resources provided by the outsourced company may be far more advanced than what’s offered by existing staff. Partnering with an agency or seasoned consultant may provide industry-specific knowledge, consulting, or insight into your track record of poor demand generation results.
2. Access to a Variety of Skill Sets
When hiring an agency, you may have a variety of skill sets at your disposal. This could include content writers, ad design experts, survey researchers, CRM developers and other highly-specialized skillsets on demand.
3. No Waiting on Training
When you take the time to hire employees for demand generation internally, there can be a gap in implementing new demand generation methods and tactics. Outsourcing can speed the time to results by providing access to fully-trained specialists.
4. Easier Access to Termination
Depending on the terms of your agreement, outsourcing may present a relatively low-risk way to run demand generation especially compared to internal initiatives. Organizations who want flexibility should pursue a partnership that includes scalable services or month-to-month agreement terms.
Disadvantages of Outsourcing Demand Generation
There are risks to outsourcing demand generation, which range in impact from significant to relatively minor. Many of the following risks can be controlled through smart partner screening and expectations management.
1. Management Requirements
Even though the actual tasking is outsourced, there will still need to be an employee assigned to managing the partnership. Depending on the experience and extent of your outsourcing agreement, managing your third-party demand generation vendor may be a significant resource commitment.
2. Communication Issues
Friction and miscommunication issues can occur due to mismanaged expectations, geographic barriers, or cultural differences. These communication issues may be slightly disruptive or devastate your outsourcing experience.
3. Lack of Supervision
Vendors vary in exactly how much client visibility is offered. However, there is a risk that you may feel you’ve lost all visibility into your lead generation efforts, sales funnel and the progress of your projects.
4. Possible Lack of Understanding of Your Brand Values
Brand values are important and your standards, voice and values are unlikely to be immediately clear to your vendor. Prepare to provide clear and concise brand and industry guidelines for best results and prioritize vendors with a formalized client onboarding process.
5. Loss of Agility
When working with a vendor, miscommunications around project specs or campaign expectations can result in greater delays than internally-lead efforts, due to communication barriers. You may lose agility and the ability to pivot quickly, depending on the terms of your agreement, your partner and how often you communicate.
Is Outsourcing Right For You?
Outsourcing can bring in multiple experts you couldn’t afford to hire individually, and put them to work for your company without paying for training, benefits or vacation time. With that said, a lot of people mistakenly think of outsourcing as hands-off, when it’s exactly the opposite.
Someone has to manage the 3rd party, and keep tabs on the project to ensure goals are met and deliverables are on point. Without someone on your team who can dedicate the time and effort to that job, outsourcing could potentially be a downgrade to what you can accomplish in-house.
If you weigh the pros and cons of outsourcing demand generation, and decide it’s the best option for your organization, do your due diligence and research multiple vendors to find the right fit. With an understanding of your options and careful vendor screening, you can hire the right kind of support and expertise to exceed your marketing targets, increase sales pipeline and drive more revenue for your organization.
Still not sure if you should outsource demand generation activities? Check out the B2B Demand Marketing Assessment Guide & Orchestration Workbook to get an accurate benchmark of your current levels of effectiveness.