Reason #5: We have no marketing department.
Admittedly, this reason is generally limited to smaller marketers, as marketing can get lost in the shuffle of so many other business activities. This can be true of all types of companies, from single-offering entrepreneurs (bakers, candlestick makers,) to high tech or Internet startups. These businesses are so focused on making a great product or offering a unique service, that marketing – capital M – is often relegated to “we’ll get to that when we have some sales.”
So they go out in search of an agency to basically “outsource” an array of singular marketing needs, usually focused on promotion activity like website development or advertising or packaging. In some cases, the limited funds (that precluded the marketer from establishing a marketing department,) tend to produce difficult choices. Should we build a website first, or run some ads? Should we fix up our product line or invest in finding the right distributors? Should we sell direct or through intermediaries? All of these functions would typically have been scrutinized by a marketing team and then decided on and cross-referenced with company/brand objectives.
A troubling problem with this approach, of course, is that marketing is often misunderstood, even by fairly accomplished businesspeople. More accurately, it’s often only partially understood, and tends to be limited to activities that sound a lot like “promotion.” What most smaller companies don’t understand is that marketing is way more than promotion, and should be everyone’s business, at virtually every level of every company.
So an obvious pitfall of hiring an agency because you don’t have a marketing department is that not all agencies can provide end-to-end marketing advice. As we saw in post #3 in this series, many agencies have chosen to specialize: some are great at advertising. Others at direct marketing. Others at branding. Some are very competent digital or social shops. Additionally, the relationship between a company without a marketing department tends to get started off on the wrong foot, since the charge from the marketer is usually very specific. They start asking around, and saying something like, “I think I need an agency to help with PR.” Naturally, they’ll find PR agencies vying for their business. Further, it can get a little icky for senior executives when an outside party comes in and starts asking real marketing questions, like “how did we arrive at this pricing strategy?” or “What are the plans for line extension?” or “How are we planning on expanding operations as we grow?” That can get a little too close for comfort for an entrepreneur who’s poured his or her soul into something for the last six years.
Conversely, there are many advantages to hiring an agency if you don’t have a marketing department. Generally, someone at an agency (a senior account executive, or management executive,) or an independent consultant is usually well versed in the marketing functions. Also, if the agency or consultant is a specialist in your vertical, you’re more likely to get road-proven advice that will lead to effective executions. And let’s face it, every larger company that HAS an internal marketing department hires an agency (or several) anyway. They can’t be that far off-base, can they?
Internally, any good business worth its salt is going to have to vet every marketing challenge: the product line, the features, the accessories (if applicable,) the service plan, the pricing plan, the distribution strategies, the operational infrastructure. A lot of un-sexy, un-advertising stuff. But these are the basic building blocks for a successful business and a clear grasp of them is absolutely critical to building a brand with any merit. If an agency can help you explore these concepts, it’s probably the beginning of a very profitable partnership for both parties.
Tomorrow: Reason #6: I know someone at an agency.