Question: Evaluating & Selecting Your Marketing Service Provider

A quality marketing services provider that acts as an extension of your management and sales team can help you achieve any or all of the following: a) create a consistent and predictable sales pipeline, b) reduce your customer acquisition costs on a per unit basis, c) increase your brand equities, and d) create credibility for your organization and product or services in the marketplace (thought-leadership for B2B which reduces sales cycle time and increases average sales price).

Determining the best partner for your particular situation is a three part answer that includes:

I. Evaluating Marketing Service Providers: Before discussing goals, measurements, and objectives in a formal proposal or presentation process; first assign a point or rating scale to each of the categories below and rank the competition:

1. Vendor Credibility - How long have they been around, how many customers, are they financially stable, do you trust them, who are their references?
2. Target Audience Fit - How many of your competitors and substitutes have they worked with? If none, you do not want to be their guinea pig
3. Subject Matter Expertise - Are the services they provide part of their core expertise or peripheral?
4. Methodology - What is the best practice process the provider will follow and implement?
5. Solutions Fit - Does the proposed methodology, technology, and tools fit and integrate with your existing infrastructure? Will these tools increase results and decrease spend?
6. Analytics and Reporting - What weekly and monthly reports and metrics will you receive?
7. Cost and Time Estimates - What is the ROI? What are the key milestones and timelines?

All of the above vendor criteria should be prerequisites to evaluating your short-list of two or three finalists.

II. Ensuring Results: Measurement and metrics are at the core of any successful partnership. If you hire a marketing provider to create a monthly eNewsletter or webinar series, but do not clearly specify which measurements equal success then the relationship is doomed to fail in the long-term regardless of short-term results or WOW deliverables. Rather than hope that your marketing services provider generates magic it is better to mutually agree on success ranges. Example measures include:

1. Brand Equity – How is your brand is perceived against your competition and substitutes? This can be tracked and improved over time. 
   
2. Online Brand Equities – Create a point measurement system where the formula includes website traffic, search engine page rankings, and conversion percentages. 
   
3. Demand Generation (Cost, quality, and conversion rate of each of the following):
• Interactions (number of webpage conversions, downloads, interactions, online inquiries, clicks, etc.)
• Phone appointments
• Face-to-face appointments

The benefit of agreeing upon measurement target ranges is that the responsibility and accountability is placed upon the service provider to act as a trusted advisor and ensure that they bring their full expertise to your engagement regardless of the barriers that will show up.

III. Ensuring Economic Efficiency: At the core, all marketing decisions should be based on risk and spend cost-benefit analysis. The goal of any services, technology, or outsourcing provider should be 20 percent cost of customer acquisition or less on a per unit basis.

All marketing and PR can be measured, contact Ephor Group if you need to measure any of your marketing spend of if you need help calculating your customer acquisition cost, of want to know your industry sector’s average customer acquisition cost.

Did you know that many of your larger competitors and/or substitutes can afford to outspend you to acquire new customers?  Valuation arbitrage mechanics may enable your competitors to outspend or directly buy revenue at a higher price than you and still be better off!  More on this topic later this month.

 

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Comments

[Jonathan Goodman]

Charles,
This is a great post. One I expect to reference again in the future to support conversations I have on this very topic.

Two of your points I'm still thinking about in particular:

1) Selecting a firm that "acts as an extension of your management and sales team" - In addition to the criteria you list, I would add the ability to establish trust (probably a given) and selecting a firm that is a personality and cultural fit with your company. It works much like any hiring decision. The closer you work with an outsider provider, the more matters of personality and culture matter.

2) "At the core, all marketing decisions should be based on risk and spend cost-benefit analysis." I'll take issue with this statement only because it's so sweeping. You just wrote a post about Gladwell's new book Outliers. His other recent book "Blink" discusses other ways that people make smart and not so smart decisions. Rarely is strict calculation involved in the manner you prescribe for marketing investments. Years of experience educate our decision making capacity. And not all marketing value can be strictly quantified according in terms of cost of customer acquisition. I support that notion that companies should measure what can be readily (and not so readily) measured, and that data should drive decision making, but marketing investments are not all reducible to formulas.

I hope my points kick-off some further discussion. It's a very pertinent exchange of ideas, especially now when all operational expenditures are getting a very critical review.

[bedard]

"Risk and Spend" for decision making always applies. And everything can be measured.

You certainly make a great distinction that decisions are not all about customer acquisition; but building the brand is still a cost-benefit analysis (i.e. should I spend an hour getting an editorial in a local magazine, or focus on examining my positioning relative to my competitors, etc.).

Most of the marketing for Ephor Group as a consulting company is focused on building the brand, either creating thought leadership or other branding initiatives. My partners will attest to the fact that we measure our brand, its perception, and strength (its a quantifiable measurement system).

Great example of "risk and spend" for branding is the Salesnet branding of "No More BS from SF.com." Was highly risky (legally and from a customer and prospect positioning stand point)!

Thanks for the discussion!!