The Case for Outsourcing
By Veronika (Ronnie) Noize, the Marketing Coach

As virtually every marketing manager will tell you, any marketing program is only as good as its implementation.  Whether you're talking promotional or sales programs, effective implementation can make the difference between success and disaster. 

And just so we're on the same page, let me define "disaster":

• Your program is a disaster when the 400 phones calls you expected to generate are actually 4,000 (or 40) calls. 
• Your program is a disaster when supplies don't show up on time, and you're left without display materials or promo items at a trade show or sampling event. 
• Your program is a disaster when your sweepstakes is discovered to be illegal in two states and out of control in cyberspace because your servers aren't prepared to handle the extra traffic. 
• Your program is a disaster when your sales materials don't make it to retailers in time for your big advertised sale. 
• Your program is a disaster when your direct mail piece is delivered after the money-saving coupon it carries expires.

In short, your program is a disaster when you lose potential revenue, credibility in the marketplace, and the trust of your customers.  Make no mistake about it:  Disasters are expensive, especially when you factor in the wasted time, damaged reputations, and the costs of rectifying mistakes.

So how do you indemnify your program against disaster?  Simple. You outsource.

Wait just a minute, you say.  Outsourcing costs money!  Well, yes it does.  But it costs far less to do it right the first time than to have to deal with a disaster after the fact.  And outsourcing is often far less expensive than it might appear.

For example, when you outsource your fulfillment functions, you gain immediate access to world-class capabilities that are probably not available to you in-house.  Not only are there tangible resources such as extra space for storage and production, extra hands to perform the tasks, and specialized equipment and software, but there are intangibles as well, such as experience and expertise.  No matter how innovative your program may be, chances are that something very much like it has already been done at a fulfillment house, and the staff can advise you on where and how to cut costs, as well as the potential pitfalls of various tactical decisions.  All of these resources are available to you on an as needed or per-project basis when you outsource, with no obligation after your program concludes.

When you outsource, you can focus your attention on your strategy, your tactics, and your budget without having to worry about the details of implementation, because your fulfillment provider handles that for you.

When you outsource, you save your valuable time, money and resources for what's important.  You do not have to recruit, hire, train, supervise or justify any temporary personnel, nor do you have to invest in new technologies that may have very limited use at your company beyond your immediate need. 

When you outsource, you run the show, because you are engaged in a vendor-client relationship, rather than jostling for limited resources within your company.

When you outsource, you control the costs.  Your fulfillment provider has the expertise to work with you to come up with solutions that meet your needs as well as your budget.  Not only can you prioritize your services based on your budget and your needs, you will be able to isolate and define the true costs of your program.

And finally, when you outsource, you mitigate disaster.  Fulfillment providers stake their reputations and business on getting things done on time, so that's one less thing for you to worry about.  And fulfillment providers already have the resources to scale up (or down), depending on the variable requirements of your program.  So if your program suddenly catches the imagination of your target market and goes wild, then you can rest assured that the system won't implode under the weight of success.  Conversely, if your program fails to find its audience (it can happen!), then you don't have to worry about over-investing in resources because when you outsource, you only pay for what you use (not what you wish you were using!).

While outsourcing may not be appropriate for every project, it can be your salvation when you're on a tight budget and under deadline pressures.  And in this economy, who isn't trying to make the most of limited resources?  As Francis R. Doyle, the former president of Fulfillment Specialties, Inc. says, "When the going gets tough, the tough start outsourcing."

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THE CASE FOR OUTSOURCING copyright © 2002 Veronika Noize.  All rights reserved