Can (should) you outsource your marketing and business development?

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mel lester blogMel Lester advocates businesses should consider building capacities “with independent affiliates”.

The proper legal term is independent contractor, but I use affiliate to designate a special class of independent contractor who has notable expertise, is well-connected, and can help you expand your business. This person essentially serves the role of a strategic hire without all the risk. In return, you offer the independent affiliate the reputation and resources of your firm, another source of revenue, and the freedom to continue to pursue other business opportunities as well.

I suppose Lester could also use the word “consultant” to describe the “independent affiliate” though I believe he intends ?that doing is as important as idea-generation here. An important point is that this type of relationship should be with a one-man (or woman) band: You have a direct and immediate relationship with your affiliate and presumably are not working with a sales representative who then plugs you into some third-party company’s systems (which may use a network of much more distant independent affiliates to do the actual work.)

If that is the type of outsourcing we are thinking about, I think Lester is on track and there can be real value to your business. I’m less certain about the value of marketed outsourcing services, unless you really know what you are doing, however, and you have decided to seek out specific solutions after careful research. The reason: In my opinion, marketing and business development capacities are core competencies of any business and leaving these responsibilities on an ongoing level to any outsider puts you in a fundamentally vulnerable position.

For example, consider businesses at different stages of evolution — the start up, the solo ?marketer and the mature firm.

In tech start-up I know, a marketer/business developer discovered (almost by accident) an inventor who had truly created some intriguing and powerful image capturing and managing software. The two are partners now, with the marketer holding 49 per cent of the business. (The marketer expects both partners’ shares will be diluted as the tech venture raises capital to grow from start-up.) Now, if the tech guy tried, he might have sought an outsourced marketing and business development approach, but the time, energy, risk, and commitment would be far too great. Here, the right approach is probably an equity share and true partnership in leading the new business forward.

In a more mature business, where the business development capacity is constrained in the owner/founder, the situation is in some ways more challenging. The business really has little value outside of the owner’s relationships. Again, however, outsourcing — outside of possibly working with a consultant to find someone to work in-house — leaves the business extremely vulnerable.

Worse, the owner may try “this or that” solutions to marketing and business development, without a careful screen of shady, self-serving or manipulative approaches. (We’ve all received spam emails about increasing your Google ranking — laughable in my situation, since Google has twice purchased plane tickets for me to visit California.)

Finally, there is a business that knows what it is doing, but could benefit from some independent perspectives and resources or needs support on a specific task. Here, Lester’s model makes sense.

You can go high-end or low-end on costs here. Really good North American consultants/contractors will charge a reasonably high fee (ideally you can negotiate it on a performance than hourly level.) If you require more technical or grunt-work administrative tasks to be completed, including, in some cases writing and rendering services, you may save a modest fortune by going offshore, and even more (recommended) if you work with an independent provider than an agency. You can find these services through and ?(A key concept with offshore services is risk management: ?I wouldn’t send security-sensitive or highly proprietary information to a strange offshore provider, nor would I trust a mission-critical task in an unknown service. However, you can easily and inexpensively test the competence of your new offshore providers, and then build back-up redundancies here.)

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