If you have a business, you need customers, plain and simple. Without customers there really is not much reason to get up in the morning, drive to the office, turn on the lights, make payroll and all the myriad tasks that we do as business owners.
Getting those customers is one of the biggest challenges that businesses face on a day in, day out basis, and because of the difficulty and importance of this task, ALL businesses need to have an effective marketing plan to survive and grow. For many companies, however, this is a business truth that is easy to put on the back burner or settle for just throwing darts at a dart board and hoping you hit something.
Nobody is going to walk into your office and ask for whatever it is that you are selling unless they know who you are, what you do, and they have confidence that you can deliver on your promises. More importantly your prospects want to know why your product or service is of benefit to them, and how you are differentiated from your competitors.
To get those facts communicated your company needs an effective, well thought out and executed marketing plan. Most companies understand the need for a strategic marketing plan, but few understand what it is or how to implement one. Marketing is not the same thing as hiring a sales team; it is much more involved than that. In a nutshell, your company’s marketing plan is about generating leads that can then be turned into sales.
Elements of a Modern Marketing Strategy
The rise of the internet, indexed search (think Google) and the explosion of social media networks have changed the way that companies communicate their value proposition (the promise of value that will be delivered by your company and experienced by your customer).
Where once, legacy tactics such as yellow page advertisements or print ads drove traffic to your front door, modern consumers armed with mobile technology expect real time access to information and make buying decisions in a matter of a few keystrokes on their devices.
This means that companies need to ensure that their branding messages are well executed, easily found on the web by sites that attract attention and covert eyeballs into leads.
Below is a list of items that make up a “modern marketing strategy”:
- Collateral development and production
- Content development specialists
- Email programs
- Graphic artists
- Market research
- Marketing software
- Metrics/data analysts
- Mobile marketing specialists
- PR specialists
- SEO/keyword research
- Social media specialists
- Special events
- Website development/re-engineering
While this is a very thorough list, it should also be seen as incomplete, because as we speak new technologies, apps and disciplines are being created which makes keeping up a challenge. This rapid change in new technologies is what makes marketing in the 21st century such a challenge for small businesses.
Now that we know the elements, let’s shift gears and evaluate your options on how to execute your strategy.
Can and Should I Do This Myself?
Many entrepreneurs are ingrained with the DIY (Do-It-Yourself) ethic which refers to the ethic of self-sufficiency through completing tasks without the aid of paid specialists. As an entrepreneur that has suffered with this particular affliction, I can certainly attest to the fact an individual can, with enough time and gumption seek out the knowledge required to complete any given task.
The challenge with this mode of operation is the many different creative elements, such as writing, graphic design, computer programming that are needed to successfully carry out a modern marketing strategy. The learning curve for a busy entrepreneur with little experience is staggering, leaving the business owner with either a vastly incomplete marketing strategy missing key elements, such as blogging, social media marketing or a site filled with ugly graphics or both.
Conversely, if the owner devotes the time to learn all of these marketing elements, you have a tapped out business owner focusing all time and attention on a steep learning curve in the creative arts. For all but the smallest businesses lacking the marketing budget to hire or outsource, DIY is an unfeasible strategy. If DIY is not the right approach, then what other options are available?
Should I Hire an Employee or a Marketing Agency?
Organizations that have neither the time nor inclination to DIY are left with a choice; either hire an employee or hire an outside agency. In many instances, business owners lean towards hiring an employee because that has been the de-facto process in the past to solve an immediate need. Additionally business owners may have the perception that an outside agency is far more expensive than hiring in-house staff. The problem with this rationale is that most of the time, owners don’t have a true basis for comparison.
How much do you think it would cost to hire a qualified marketing employee vs. hiring a marketing agency?
Most business owners don’t have a true basis for comparison and typically use a rudimentary methodology for decision making. In many cases, business owners might use a base salary versus an hourly quote for a marketing agency and thus conclude that since the hourly rate is higher it therefore must be the more expensive option. This is a big mistake.
Many owners fail to take into account the true costs associated with hiring and retaining an employee. As the chart below shows, not only do you have to account for base salary, but adding in fixed expenses such federal, state and/or local taxes as well as health insurance contributions, retirement plan matches, vacation, sick days, etc., and the true cost can be as much as 1.25 to 1.4 times the base salary. Add in additional expenses such the cost of recruiting and training and the total starts to escalate quickly.
Let’s take a closer look and see what really happens when you compare the two. Disclosures: We used the job position of Marketing Manager for the comparison. Many marketing professional specialize in one area of marketing, like a social media marketing manager, and may not have the experience that a marketing manager could have. All the salary data is based on the National Average salary for a Marketing Manager in the USA, and was taken from Salary.com. There are also many elements to marketing, so we chose the inbound marketing process which encompasses many of the items listed above.
While the numbers are averages and should be adjusted based on your needs, location of business, etc. The table should give you a better understanding of the approximate costs of hiring each one.
In addition to sunk costs in hiring the right employee, the effective execution of many marketing tasks requires extensive software applications which require DINERO (that’s money)……..lots of it in the form of upfront purchases and annual subscriptions of graphics programs, PPC management apps, business metrics software and a whole host of other requirements.
In addition to the pure cost factor of hiring an employee, there is one additional factor that needs to be considered. It would be exceptionally difficult to find one person that possesses each of the skills required to execute your strategy. This would most likely require your new marketing hire to outsource at least some of these tasks to outside agencies, which really blows this comparison out of the water.
As you can see after taking these factors into consideration, hiring marketing staff is no bargain.
Benefits of Working with a Marketing Agency
Although you may perceive that you are saving money on an hourly basis relative to hiring an employee or doing it yourself, hiring a marketing agency, particularly one focused on inbound marketing tactics provides substantial value. Long gone are the “Mad Men” days of nebulous budgets with hidden fees.
The pricing dynamic has shifted and many firms are now working on clearly spelled out pricing structures, and lower-fee marketing retainer agreements.
While there is no industry standard, the going rate in most markets for an experienced inbound agency starts in the $3,000 to $5,000 range in terms of monthly spend. While that may seem like a large number, in comparison to the opportunity cost of DIY, or the pure allocation of funds towards building internal staff, this is a relative bargain.
Among the many benefits of working with an experienced marketing firm are:
- Expertise with your market niche
- Experience in executing marketing plans
- Money savings by hiring to your specific needs
- No employee training required
- Your marketing plan is executed immediately, the employee may need time to ramp up while the marketing firm is ready from the get-go
- Avoid HR nightmares
- No additional overhead
- Tax deductions, not tax liability
- Efficiency for short term and urgent projects
This new paradigm allows business owners to focus on running operations and increasing the bottom line, not messing around with Facebook, Twitter or trying to build out a website.
The big question then isn’t can I afford an experienced marketing agency, but rather how much am I costing myself in time, money and lost opportunity by trying to do this in-house.