Outsourcing Club Marketing

Outsourcing Club Marketing

The decision to outsource a marketing function can be both strategic and tactical. At the tactical level, clubs often find themselves strapped for marketing resources or simply don't have a resource at all. What's right for your club?

Effective marketing requires a wide range of expertise including strategy, analysis, technology, product specialists especially for gaming, communications, creatives, web, social and e-commerce experts, advertising specialists, copywriters, and promotions.

Let's face it: Some of those skills are going to be unavailable or inadequately staffed. Marketing analytics, database marketing, and data hygiene are three common areas of weakness in many clubs. Understanding customers, their demographics, preferences, and spending behaviour is the life's blood of a club. However, most clubs do not have enough or any people with the requisite skill sets.

Similarly, there are virtually no clubs with skills to use marketing automation tools optimally, or, even, effectively. In either case, specialized outside help is often required.

Managing Costs

Fixed costs in people, systems, and facilities often account for the largest portion of a marketing budget. Clubs often miss out on opportunities created by not understanding customer demographics and markets, as well as taking advantage of immediate opportunities. As such, those functions or projects that can be outsourced create a greater overall level of flexibility.

While the specific costs of outsourcing might appear to be higher than doing it yourself, there are hidden costs in maintaining internal fixed marketing assets. These include absorbing delays caused by changing priorities, attrition, lack of support when it is needed, etc. Also, the costs of expansion and contraction of marketing functions, even on a monthly basis, can be very expensive when done internally.

While a three-year retainer agreement with a database marketer may be fiscally indistinguishable from a fixed cost, the level of service provided can scale up or down as the situation changes. And while an outsourcer might charge more for any one unit of work, he also bears much of the risk that changes in your strategy agenda.

The Skills Gap

Whether you are outsourcing a function like public relations, a capability like marketing operations, or a technology like your member analysis, you are almost certainly entrusting it to a company that has done it before. The experience gained supporting many companies is key to deriving best practices.

Many outsourcers package their understanding of best practices not only in the form of their employees, but in data models, process flows, or partnerships. Building this understanding from scratch in-house may be possible, but it takes time. Engaging an expert provides immediate access to expert people and institutional knowledge that can be transferred immediately.

Focus on Operations

Think about the mix of skills in your organization. There are some people whose primary responsibility is to service customers. Some are focused on understanding gaming results, others on restaurants. Others manage the basic marketing functions, like your club magazine and the usually weak SEO we site. Bottom line: These people handle the core functions of the organization. They are the engine. There is little to no focus on understanding data about demographics, analytics, member transactions, communication and other metrics to improve traffic and operations.

To be blunt, the former is the essence of your business; the latter is not. The engine is the irreplaceable element in an organization, while all the other functions are candidates for outsourcing.

Speed to Market and Knowledge transfer

To create a high growth phase, it is usually faster--and often cheaper--to outsource marketing processes. Getting to market quickly with a new or junior team if all the key functions must be identified and analysed before execution is not likely.

That said, outsourcing can be deleterious to the club's long-term knowledge base once temporary staff finish out their contracts. As a result, they should ensure a committed level of knowledge transfer. This can come in the form of direct employee access to outsourced teams, in-depth documentation, and frequent meetings. A hybrid insourcing/outsourcing approach might be a good way to take advantage of the benefits of outsourcing while still developing and maintaining internal capabilities.

Working with business cycles

When revenue or profit falls, companies cut costs immediately. In the short-term, cancelling marketing activities may save immediate costs but will incur lost revenue in the long term. In the intermediate-term, the costs associated with attrition, staffing, and the associated erosion of the knowledge base can be more expensive.

Outsourcing functions offers a greater degree of flexibility, and can improve the boom/bust cycle. Some outsourcers bill on a project basis, and these can be scaled up or down with a minimal notice period.

Compliance is critical

Legal compliance has become a top priority for all clubs. Many do not have an adequate understanding of the relevant laws or processes in place to ensure compliance. There are many pieces of creative and hundreds of promotions we see every year that are non-compliant. A well-crafted outsourcing agreement that covers customer privacy and security not only helps marketers understand these issues, but can also offload at least some legal risk when there is a customer complaint or government audit.

Growing your member base

Trying to develop a new customer channel or geography is in some ways analogous to managing an acquisition process. Each new demographic creates new opportunities and pitfalls. There is a heavy cultural element to most marketing campaigns. The more geographies and channels they include, the greater the opportunity to make a cultural or financial mistake.

Multitouch campaigns that span point-of-sale, advertising, PR, direct mail, e-mail, and the Internet require particular care. Cultural differences exist not just in different languages and geographies, but also in communications channels. Effective direct mail techniques do not necessarily translate well to an e-mail campaign. You may need an integrated radio or local print advertising campaign, but the media have quite different dynamics.

Implementing a new marketing channel requires a level of expertise that many, perhaps most, clubs simply do not have. Outsourcing them or using outside resources to supplement internal resources is generally a good idea.

Sliced Marketing offers a full range of Outsourced services for the Club market with experience across the industry.