Every financial institution aspires to have a world-class marketing team, whether they serve international customers or small-town Americana. Yet bringing together a team with the depth, breadth and variety of skills needed can be nearly as challenging for large financial institutions as it is for small ones. Many of the talents that are increasingly critical for success — such as expertise in analytics, digital, social and mobile marketing — are still emerging among financial marketers.
To put it more succinctly: Not too many people do everything you need them to do, and good help is still hard to find.
Finding the balance
Of course, outsourcing is a viable option for fleshing out the skill set you require from your marketing team. An outsourcing partner can provide financial institutions with access to skills, talents, and technology they often couldn’t afford to bring in-house. On the other hand, you can’t outsource everything. Some critical functions will always need to remain in the hands of your own staff. Further, budget constraints that keep you from hiring the team of your dreams may also limit your ability to outsource.
A majority of financial marketers polled for Gartner’s 2016 Marketing Organizational Design and Strategy Survey said they aspired to better balance their outsourcing and insourcing. More than half said they lean on agencies and external marketing partners for everything from strategizing marketing initiatives to executing them. Two-thirds would like to build more capable internal marketing teams so they need to rely less on external resources.
How can you tell when to outsource versus when to invest the time, money, and effort to insource for the skills you need? When does it make more sense to hire a vendor to provide a particular service and when is it better to hire or train someone to do the job in-house? How do you strike the perfect balance between in-house capabilities and outsourcing partnerships?
Gartner’s research sheds some light on what marketing initiatives might best be served by in-house staff and which ones it might be wise to place in the hands of marketing vendors.
When to insource
The decision to keep certain activities in-house isn’t solely driven by cost. Myriad other factors come into play, including your overall vision for your marketing team, your specific needs of the moment and anticipated needs down the road. Hiring to keep certain functions in-house may make sense for your financial institution if:
- The skill or capability you are hiring for is key to your organization’s strategy to differentiate itself from competition, or it is a proprietary marketing skill that gives your institution a competitive advantage.
- You need the individual with the desired skill to serve a multi-functional role within your organization; he or she will do more than just the role you’re hiring for.
- The addition of a new person with the desired skill would complement existing resources within the financial institution.
- You can reasonably anticipate budget stability or growth that will allow you to continue funding a new position for the long-term.
- Your need for the skill or resource will be sustained over the long-term, and you can reasonably anticipate stability in demand for the skill or resource.
- Interruption or fluctuation in the desired skill or resource would negatively affect business.
When to outsource
Outsourcing can be a cost-effective way for financial institutions to develop a breadth and depth of skills in a very short time-frame; rather than investing the time and money to train someone in-house, outsourcing vendors typically already have a stable of marketers with the skills you need. It’s worth noting that marketers told Gartner the two most important skills to hire for — marketing analytics and digital commerce — were also the two most difficult skills to recruit for. Outsourcing may make sense for your financial institution if:
- You require a particular skill or asset for a specific initiative, objective or deliverable that is limited in time and scope.
- The person who will fulfill the desired role will not need to be multi-functional, but rather focused on the goal that’s specific to their role.
- Budget limitations mean financial resources to support the resource may fluctuate, and/or need to be lean (e.g., cost-savings in terms of benefits, wages, taxes for in-house staff).
- Demand for the skill or resource is likely to fluctuate over time; demand is not sufficient to justify a full-time, in-house person but is enough to warrant having access to the skill or resource through an outsourcing partner.
- Your need for the skill or resource is immediate, and you don’t have the time to invest in recruiting, hiring and training someone to fulfill the desired role.
One size doesn’t fit all
While a desire for greater balance was a common theme among marketers polled by Gartner, “balance” will not look the same for every financial institution. The right mix of in-house and outsourced resources will be different for each organization, depending on numerous factors, including many we’ve explored here.
This topic has been a hot point for many bank and credit union CMOs. Recently we put together some content to help our customers determine what their insource vs. outsource balance should be. We put our research together into a report we called “World-Class Marketing for World-Class Financial Institutions”. Stop by our resource center to download the report which includes insights from Garner, Sirius Decisions, and Forrester.