The Case for Outsourced Channel Marketing
Written by Jonathan Calver, CEO, StrategyMix
This blog has been written for IT vendors and distributors.
There are 3 main reasons why you should consider an Outsourced Channel Marketing solution, which are expedience, expertise and economics.
I will expand on each of these 3 “E”s, in this blog.
There are 2 typical scenarios where it might be more expedient to outsource your channel marketing:
Scenario # 1: Interim Solution until you can hire a Channel Marketing Manager
Your previous Channel Marketing Manager may have left, or you might have recently realised that you need to hire a Channel Marketing Manager. In either case, it could take you some time to find and recruit the right candidate.
And in the meantime, you might have partners who are “screaming out” for marketing assistance or are, in a more likely scenario, doing no marketing. Either way, if your partner are “not actively marketing” then your business is unlikely to be growing, and your financial targets will be missed.
In this scenario, outsourcing your channel marketing to a “caretaker” until you can bring on board a Channel Marketing Manager, will make sense.
Scenario # 2: A Dual Role Marketing Manager is overstretched & headcount cannot be increased
It is quite common for an “in country” Marketing Manager to have a dual role and be responsible for both Field Marketing and Channel Marketing. This can work well, unless the company is expanding too quickly, in which case this marketing person can be overstretched almost to breaking point. At the same time, there may be a company policy which bans additional head count.
An outsourced solution in this scenario, could be a good option both from an economic perspective and to also reduce the stress on the marketing manager.
As a simple example, it could be that you just need someone to “help out” for a relatively low number of hours a week (say 10) for the next few months to “get you through”. In this scenario, you could hire a StrategyMix Channel Marketing Manager for just $65 an hour or $650 a week
When it comes to channel marketing expertise, there are probably 2 skill sets that are particularly valuable in the current market.
Expertise Area # 1: New Marketing Techniques
Many IT vendors have realised that Channel Marketing is going through a transition phase as we start to abandon the “mass marketing approach” and switch to a more highly targeted, relationship building approach.
If you accept this to be the case, then it can be difficult to find Channel Marketers who have expertise in marketing techniques, such as Account-Based Marketing, because they have very rarely been applied in the channel.
In this scenario, it makes sense to contract an outsourced solution provider, who has more expertise than can be acquired through a new employee.
Expertise Area # 2: Partner Recruitment
Many Channel Marketing Mangers find it difficult to recruit partners into their marketing programs.
This is partly because the business owners of many resellers are very cynical. They have been promised all sorts of outcomes by other channel marketers in the past, only to be disappointed. To recruit the “hard-nosed” reseller of today, you need a fairly strong personality and a very good argument.
Even then it can still be ‘difficult’, but it is also vital because if you can’t recruit your partners in your marketing programs then you won’t be able to promote your solutions to the marketplace.
In this scenario, it makes sense to get an outsourced channel marketing provider with persuasive arguments and a proven track record on to your side.
The final and by far the most important of the 3 “E”s, is the economics of outsourcing.
It is the economics of outsourcing that is driving the company restructures within so many industries, as financial managers take advantage of fixed cost contracts, made possible by operational efficiency.
Outsourced IT is an obvious example which will be familiar to IT Vendors. What will be less familiar is the idea that they can also benefit from the economics of outsourcing their channel marketing.
In the end, it comes down to the simple question.
Do you want to increase your employment costs? Or would you rather pay for your partners to do more and better marketing?
As a very simple comparison, a typical channel marketer in Australia might require a salary of A$80,000 pa. To this, you need to add a multiplier of approx. 20% to cover employments costs, such as employee benefits and equipment, which brings the total cost to about £96,000.
For a similar investment, you could spend the A$96,000 on either 249 fixed price email campaigns (at A$385 each, assuming 100% funding) or 28 ABM-style Partner Round Table Marketing Campaigns (at just below A$7 K each, assuming 50:50 funding).
Note that both these fixed-cost type campaigns include both: “partner recruitment” and “strategy development”.
Obviously, this is a relatively simple example. but it brings into sharp perspective how the economics of employment compares with the economics of fixed price outsourcing.
And while this example was for Australia, the numbers and ratios are similar in most “western economies”.
There are 3 reasons why an IT vendor might consider outsourced channel marketing
- Because current resources are overstretched
- To gain access to expertise and new channel marketing techniques
- To convert employment costs into more partner marketing
I hope you have found this blog to be useful and thought provoking. Let me know if you have any questions or if you would like to set up a 30-minute call to discuss how this option might work in your company.