Home How to Maximize ROI When Partnering With an Outsourced CMO

How to Maximize ROI When Partnering With an Outsourced CMO

Until recently, outsourcing was a tactic, not a strategy. Manufacturers that needed to cut labor costs contracted with factories abroad. Restaurants that didn’t want to deal with delivery partnered with groups like Grubhub.

But according to Deloitte’s 2018 Global Outsourcing survey, “disruptive” outsourcing is the new normal. The report found that, among surveyed organizations considering or adopting cloud services, 70 percent would choose a service provider with a “reasonable or advanced ability to implement disruptive solutions.”

In contrast to traditional, task-based outsourcing, the point of disruptive outsourcing isn’t necessarily to save money; it’s to challenge existing models. And although Deloitte notes that tech services are ground zero for disruptive outsourcing, the practice can apply to almost any process or department.

Amazon has an in-house content team, for instance, but it also outsources content creation. Does duplicating the function create additional costs for Amazon? Probably. But the tech giant realizes that, due to cultural nuances, its own team may not be the best choice to create content for, say, stay-at-home moms or Hispanic seniors.

Disrupting the C-Suite

Outsourcing content creation is one thing. But in the spirit of disruptive outsourcing, some companies are taking things even further by outsourcing senior roles, such as the CMO.

Why would a company want to outsource its CMO? Because marketing has become a hotbed of innovation. Areas like influencer marketing, experiential marketing, and content marketing are growing so fast that even experienced marketers are struggling to keep up.

If you decide that outsourcing your CMO is your route to disruptive innovation:

1. Discuss risk tolerance right away.

Taking risks with your marketing can distinguish you from competitors, break metric ceilings, and encourage customer loyalty. It can also, of course, burn your brand. Because every company’s risk tolerance is different, it’s critical to have that conversation with your outsourced CMO.

Do your best to make the conversation concrete by couching it in specific campaigns. You might, for example, note that your company wouldn’t be comfortable with Old Spice’s “The Man Your Man Could Smell Like” initiative. Although the inaugural video boosted sales of the body wash by 55 percent in the three months after it first aired, it could’ve easily crashed. Had pundits spun it as a bad spoof video or an unrealistic portrayal of masculinity, Old Spice might have found itself in a position similar to Dove after its body-shaped bottles were panned by consumers.

Erik Huberman, founder of outsourced CMO firm Hawke Media, warns that leaders shouldn’t let the mere fact that a CMO is outsourced influence their risk tolerance. “There’s a big difference in how much experimentation leaders will tolerate from their own investments versus others’,” Huberman explains in a recent Forbes article, “but therein lies the rub.” He points out that, ultimately, a risky campaign is risky, regardless of who carries it out.

2. Ask for a crash course in martech.
Marketing technology is, hands down, the most confusing domain of marketing. After breaking onto the scene less than a decade ago, the martech landscape now includes more than 7,000 tools. Despite the fact that 97 percent of them aren’t enterprise-ready, the average enterprise uses 91 such tools.

Unsurprisingly, most marketers are struggling to get the hang of their new tools. Although 75 percent of marketing executives surveyed by Wipro Digital are confident in their own martech skills, just 6 percent felt the same way about most of their marketing team. More than half told the marketing researcher that martech competency was a barrier to their success.

In addition to marketing strategy, an outsourced CMO should be a master of martech. In a recent CMO Council interview, Chiefmartec editor Scott Brinker underscored the CMO’s role in this area. “You can’t relinquish your decision-making responsibility to the IT department or a single, most-favored vendor,” he said. “You need to establish structured programs for discovery, qualification, implementation, and — I’d also add — ongoing maintenance and re-evaluation of marketing technologies across your department.”

3. Make sure internal marketers get face time.
Your marketing team can’t work as, well, a team if its members never get time with each other. This is a big reason why former Yahoo CEO Marissa Mayer called back the company’s remote workers. “We need to be one Yahoo!, and that starts with physically being together,” Mayer wrote in a memo defending her decision.

Although it’s hardly necessary to have your outsourced CMO physically present for every internal meeting, make sure she gets time with her direct reports. Research published in Harvard Business Review proves that face-to-face communication is 34 times more effective than email. Try, in particular, to have the outsourced CMO in the office for quarterly performance reviews and strategy sessions.

4. Have the renewal conversation early.
Rarely, if ever, are CMOs involved in day-to-day marketing operations. Because their role is one of strategic planning, they tend to work on campaigns and branding at least a quarter in advance.

The trouble is that companies tend to use six-month or one-year contracts, especially when they’re testing out an outsourced CMO. As the contract period winds down without a renewal decision, the outsourced CMO becomes a lame duck.

“Anyone in a marketing leadership position has to have a vision of what success will look like. It could be bringing a new product to market, attracting a new audience to an existing product or supply, increasing revenue from existing customers,” Mike Spakowski, creative director at Atomicdust, notes in a blog post. “Regardless, whoever is steering the ship needs to know where it’s heading — and how they’ll measure their progress.”

The C-suite might be the last place you’d think to look for outsourcing opportunities. But it’s exactly the strategy’s unexpected nature that makes it such a source of innovation. Just be sure you, your external CMO, and your marketing team are on the same page from the start. Otherwise, you might just disrupt yourself.

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Brad Anderson
Former editor

Brad is the former editor who oversaw contributed content at ReadWrite.com. He previously worked as an editor at PayPal and Crunchbase.

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