B-to-B Cataloging: Hire or Outsource?
The most successful catalog/multichannel marketers follow a proven principle: They know what they do well, and they outsource what they don’t.
To be a successful B-to-B multichannel merchant, you need to staff or outsource 10 core competencies, which are unique to multichannel merchants. These are merchandising/product development, branding, creative, marketing, database, Internet, call center, inventory, fulfillment and print management. Take a moment to identify which of these you staff internally and those that you outsource; then ask these questions:
1. Can you identify the person in charge of this competency? Someone needs to actively run each of these areas. If one of the functions is on autopilot, you’re placing your company at risk. For example, who’s in charge of your database? Do you have a definitive answer, or do you say, “I guess it’s so and so”?
2. Is that person an expert? Your managers need specific training to effectively perform each of these functions. You want people who can accomplish their tasks with minimum intervention from you. You may have a specialty or two of your own, but you need managers who know a lot more about their functions than you do.
What’s Your Answer?
If you answer no to either of the above questions, your business is at risk. For that core competency, you’re likely spending too much money, not getting the response you could, missing a strategic opportunity, not staying current with technology or all of the above. Successful B-to-B catalogers outsource the competencies in which they lack expertise or only need part-time help.
For example, B-to-B marketers often produce only one or two catalogs a year with multiple cover versions for their drops. They can outsource creative for less than hiring an art director who specializes in catalogs.
This principle can apply to whole departments. Take this actual event, for example: After serially hiring and firing fulfillment managers, one company president outsourced his entire fulfillment operation. He realized that some core competencies required specialization unique to his business, and others required a specialization that was transferable. The challenge is to know which is which for your particular business.
Expertise You Need
Managing merchandising and product development, for the most part, requires a level of specialization that’s unique to your company or niche. You may outsource manufacturing or elements of design and engineering, but to maintain competitive advantage, you probably need a dedicated expert leading product development and merchandising.
A similar decision may apply to your call center. If reps need a high level of technical knowledge to explain your products, then managing your own call center makes sense. On the other hand, inventory management is a function that more and more companies find transferable to outside vendors.
Think strategically about your outsource decisions. With any function that you outsource, you want to do more than just save money; you want to bring more to the table than you could find in a single hire. A good outsource choice is a portal into other areas of expertise, which would provide you with a strategic advantage that benefits you in ways beyond any one core competency.
Regardless of your choice to staff internally or to outsource, identifying and examining these core competencies are important steps to effectively managing your entire catalog operation.
George Hague is vice president and senior marketing strategist at J. Schmid & Assoc. Inc. You can reach him at (913) 236-8988 or at GeorgeH@JSchmid.com.
A columnist for Retail Online Integration, George founded HAGUEdirect, a marketing agency. Previously he was a member of the Shawnee Mission, Kan.-based consulting and creative agency J. Schmid & Assoc. He has more than 10 years of experience in circulation, advertising, consulting and financial strategy in the catalog/retail industry. George's expertise includes circulation strategy, mailing execution, response analysis and financial planning. Before joining J. Schmid, George worked as catalog marketing director at Dynamic Resource Group, where he was responsible for marketing and merchandising for the Annie's Attic Needlecraft catalog, the Clotilde Sewing Notions catalog, the House of White Birches Quilter's catalog and three book clubs. George also worked on corporate acquisitions.