Outsourced marketing agency or in-house team – which is more beneficial for your business?
If you are a small business owner and have already realized that marketing is just the thing your business really needs, congratulations. You’re halfway to success. The second half of the road will be difficult, but interesting. Before you enter this phase, you need to decide how to approach this issue. You have 2 options – in-house team or outsource team. Each of these options is good in its own way. However, have no illusions: each one has upsides and downsides. Let us explore, for the decision to be fully informed.
This option gives you the opportunity to grow your own team of specialists within the company, transferring to it to an almost all powerful tool. You recruit staff yourself, you know the specialists from the first day, install and change strategies and metrics, track the processes and results. Everything from corporate culture to vector and pace of your marketing efforts is under your control.
So, what do you need to get a marketing department for a good, strategically honed, developing company? First of all, you need an experienced marketing director. What does the director of marketing do? In fact – nothing. This is a management function only. MD works only accompanied by a team of minimum 3 people (an assistant, an analyst and an advertising/PR/digital manager. In the b2b sector, the composition will be slightly different – a technical marketer, a CRM manager, an advertising/PR/digital manager.)
you can be sure that you hire exactly those who need
you can monitor effectiveness every step
all the teams working time is dedicated to your project
involvement, inspiration and concentration are undivided
you know what to expect and what you can demand
you determine and regulate strategies and budget
during first stages you do not always understand how to determine employees levels of professionalism
during first stages you can’t properly monitor and measure the effectiveness of of marketing department
you will spend at least half a year on the formation, training, consolidation and adaptation
you must ensure a constant amount of work for the team, quickly select a replacement for those who leave
Let’s talk prices
The salary for a Marketing Director in U.S. is ranging from $4,733 to $45,540 a month, national average is $116K a year. The year’s salary of a competent Marketing Manager is $76K and $103K for Senior Marketing Manager. Prices vary on the competence and industry. However, to form a strong inhouse marketing team only the bare salary fund adds up to $300K, not taking taxes, equipment, office space, benefits and bonuses into account.
In search of a suitable marketing director hr-specialists and business owners spend on average 1-6 months. At least 6 months will be needed to form a team, plus 1.5 months is usually spent on the adaptation of employees.
|Salary||$44,595 – $148,040||
|Bonus||$973 – $30,668||
|Profit Sharing||$512 – $24,734||
|Commission||$755 – $30,118||
|Total Pay||$40,995 – $162,953||
The inhouse team is reliable, efficient and stable, but for small businesses it can be unreasonably expensive.
Outsource marketing team
Everyone is constantly outsourcing. We take our car to the service station, not gather a pit crew; go to the hospital instead of hiring full staff of medical personnel… This form of cooperation is also suitable for small and medium-sized businesses when it comes to marketing. Usually the owner hires a ready-made marketing team or an agency for solving a specific problem or building a strategy.
you don’t waste time recruiting specialists and building a “combat marketing unit”
outsource professionals value their reputation, therefore make the maximum effort to achieve the best result possible
you don’t buy a cat in a bag: the team already has a portfolio, which can be studied
you are a client and have the right to terminate the contract almost at any time
you pay much less than you would for the maintenance of the inhouse team
your project is not the only one for this team
you will have to fully trust the remote team, or monitor it permanently. (Which is close to impossible)
evaluation of the effectiveness can only be based on the results. (Which is never an intermediate thing to occur)
Why the broad price range?
Now consider the option of transferring the functions of strategic marketing to outsourcing. The cost of work on the initial audit, research and the development of the strategy in U.S. costs from $250K up to $500K, according to Harvard Business Review. On the other hand a complete marketing team situated in a 2nd world country, offers competitive prices. These prices are significantly lower. Outside U.S, the same service will cost 65% to 75% cheaper.
An average monthly-retainer ranges between $1,000-$3,000 in the U.S. The SEOmoz survey also found that the most common price for monthly retainer from outside the state borders ranges between $251-$500 (13.8% of total responders) and $2,501-$5,000 (11.3% or responders). Project-based fees in the digital marketing industry in U.S., evaluated by an informal SEOmoz survey found that prices per project tend to range from $1,000-$7,500. This is the price for a one-time project. Follow-up work requires an additional engagement and thus more work and cost for you. The global outsourcing market in 2017 has doubled in size. This shows that there are more and more businesses willing to invest in outsourcing.
Global outsourcing market in 2017
Nowadays it’s easy to connect on a global scale. That is why the US based companies practice outsourcing marketing content creation to save money, while still getting the desired level of quality. Entrepreneur survey on hourly rates of freelancers from 16 different countries shows that the price varies $50-$100/hour. With hourly rates every hour spent on your project is a billable hour regardless of the task performed. The downside is that the number of hours could spin out of control if you don’t keep a watchful eye on progress.
Benefits of outsourcing
An outsource marketing team is a convenient solution that will cost you less than your own marketing department with less financial risk involved. You can not control the process, you can track only the results on daily/weekly basis. However, the probability of quality of performance is quite high, because the team already has experience and well-established methods. And they also have a name that they probably don’t want to risk. Is the psychological “comfort” from the feeling that “your employee is closer to the body” worth a ton of money? Only for the business owner to decide. The small business community is hurt with mistrust. Because of distrust, we are inclined to take on our own, possibly inferior, marketing team, than hire an outsider.
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