Are Outsourcers the World’s Worst Marketers?

By Tim Wilson

Let’s face it – outsourcers as a whole are not the world’s best marketers. Some struggle to get the word out, and, ironically, most aren’t comfortable leaving the marketing in someone else’s hands. Fair enough – assuming an outsourcer has its own marketing house in order. Many don’t and, as in any industry, some companies, and some regions, do better than others. “Brand is everything in outsourcing,” says Deborah Kops, outsourcing consultant at Sourcing Change. “Latin America has a lot of opportunity, but people understand India better. Frankly, Latin America has a lot to learn when it comes to branding and marketing.”

In Latin America, as in other parts of the world, the heavy lifting when it comes to marketing outsourcing opportunities is done by government and industry organizations. While that can be effective – specifically to the extent that it can tie in with economic policy and public resources – it is limited in that it tends to focus on the appeal of a region and not a company. By comparison, the advantage of an outsourcer getting its unique marketing message together is that it has to go through a process of self-examination.

“We are starting to understand what we don’t know,” says Kops. “But the buyers are frustrated – in the main they don’t think they are getting the promise of outsourcing.”

Problems with Sales and Marketing

As it stands, it is mostly up to sales teams to extend their brands into the buying community. The irony is that in hard times marketing budgets get hit hard, yet in hard times a strong argument for outsourcing can still be made. The problem isn’t only that outsourcers lack a marketing department, but that when they do have one it is not aligned with sales – a problem that affects all businesses. In fact, a recent report from Chief Marketing Officer (CMO) Council found that a mere 16% of marketing and sales departments consider themselves to be “extremely” collaborative.

That comes as no surprise to close observers like Monique Reece, founder of MarketSmarter, who argues that marketers can improve by focusing on five key areas: breaking down sales and marketing silos; improving the sales process; winning new business; organizing around customers (not products);  collaborating/automating; and making everyone a marketer.

“It requires the focus of everyone in an entire organization,” Reece argues, adding that “marketers need real face-to-face time with customers in order to understand their biggest challenges.”

From an outsourcer’s perspective, that means getting to know buyers so that the right message is sent, and the right response is ready. And whether the offering is nearshore or further afield, outsourcers need to be savvier at marketing across cultural divides, and at addressing protectionist tendencies.

“Most companies don’t use social media as part of their communications’ strategy. As a tool it has not been embedded in the management of business services delivery”

Anger against Outsourcing

“Cost will always be a factor, but there is some rising nationalism in the United States,” says Kops. “I am working with clients who are saying this context is important. There is slight concern about sending jobs offshore, and some disappointment with offshoring. It is not often that you find people who are completely enamored with outsourcing.”

A new immigration bill pending in the United States’ Congress could crimp the ability of big Indian players like Infosys, Tata Consultancy Services, and Wipro to bring workers to America. The bill is favored by some of the United States’ biggest IT companies, and may in fact help those nearshore providers who are able to capitalize on the opportunity – and the message– by arguing that the same work can be done nearby just as well, and at reasonable cost. But first they have to commit.

“Outsourcing companies spend very little money on sales, marketing, and branding,” says Kops. “Marketing is the front door of any business, but outsourcers aren’t strategic about the sale.”

Which means they are often not well-equipped to capitalize on the jurisdictional support offered by government agencies. And when they do, they lack the internal alignment with their own sales forces, right down to collaboration on sales plans and execution.

“If the marketing department has only a target revenue number and little say into how it will be achieved,” notes Reece, “how can they create effective marketing programs to help salespeople achieve their goals?”

The influence flows both ways, with marketers also able to aid the sales team. Assuming they are supported within the organization, they have the opportunity to research industry trends and move to more customized solutions that address specific customer needs. Sadly, outsourcers aren’t adept at this.

“I look at outsourcing as a fifteen year old, with plenty of room for growth,” says Kops. “For example, most companies don’t use social media as part of their communications’ strategy. It hasn’t been harnessed for outsourcing. As a tool it has not been embedded in the management of business services delivery.”

And its value is being lost on the marketing front, too. As outsourcing becomes less of a cost play, and margins tighten, marketing knowledge may be a key differentiator for outsourcers – especially as they take on the market’s big players.

“I believe fundamentally that India remains supreme on a macro basis,” says Kops. “But knowledge processes remain people dependent, and there are some Tier 2 and Tier 3 players from India that still don’t get it. Either way, you still need brains.”

The brains in the industry say that sales and marketing have to integrate, with Monique Reece from MarketSmarter reporting that a lowly 12% of marketing and sales teams have access to the same customer information on an integrated basis. For outsourcers the world over, getting the marketing and sales groups on the same page seems like a good place to start.