The 15th of September 2008 was a great day. It was my 35th birthday. I first met our now editor in chief, the venerable Justin Crozier. And it was my first day working as a freelance writer with Justin’s team at Martin Currie. As it turned out, it was also the day Lehman Brothers went bust.
Stock markets fell. Assets under management fell. And so did fund managers’ profits. Consequently, marketing directors had their budgets and staff numbers slashed. However, they realised they needed to talk to their customers more regularly to reassure them. In other words, the imperative to spend less AND communicate more created a conflict of competing priorities that accelerated the outsourcing trend.
Will a weak economy in 2019 and 2020 lead to falling markets and more outsourcing?
No-one is predicting a return to the terrible conditions of 2009. However, most leading indicators predict a slowdown of some magnitude.
What should 2019’s marketers learn from 2009? Is outsourcing still the best strategy for an uncertain environment? Let’s consider the three main choices facing marketers.
1. Cost cutting is your priority
This is where markets get really bad (down 20% plus) and profits collapse: the CFO is running the show. A tactic here is to optimise efficiency. If you publish 30 fund commentaries, employ a writer for just five days to write those reports. Matching your resources to your marketing plan makes your budget far more efficient.
Traditional thinking is that outsourcing costs more than permanent employees. That’s certainly not always the case. Marketers usually forget to consider the hidden costs of employment, which can often be double employees’ base salaries. Our analysis shows that a simple ‘day rate’ model saves money for clients paying base salaries of £80,000. In reality, the threshold is probably lower, but we’re confident about this higher figure.
2. Client retention is more important than cost cutting
This is a mildly weak environment: markets are down 10% but profit margins are holding up.
You may want to retain your existing team. But investors need to hear more from you. So, this is the time to invest in more writing to increase the frequency, clarity and strength of your message. The marginal cost of extra communication (say a £2,000 campaign) in relation to the cost of retaining even one £100k client is a no-brainer.
3. You want to cut costs AND retain client assets
This is the Goldilocks scenario in which the senior executives want to have the best of both worlds. In this scenario, a more flexible staffing model is critical.
Marketers need to adapt campaigns and spending to changing priorities. Having too many fixed resources means you can’t react quickly enough. A flexible model with some in-house and some outsourced writers means you can scale up and down when required.
That flexibility should also extend to the types of writers. If you feel the need to employ someone, you need a generalist. But be prepared to pay a higher price for that experience; these writers are as rare as three-legged unicorns. If, however, you don’t feel the need to build an empire, you can then use multiple outsourced writers for different assignments. That’s important if you have a diverse product range: you need a different skillset for a white paper on municipal bonds compared with a brand-led social media campaign or a monthly programme of 300 edited fund commentaries.
Underlying this message is a human question: what about the people that work in-house? Well, despite the explosion in content being produced by the Copylab team, we have yet to be the cause of redundancies of our ‘own making’. On the one occasion when that was mooted, we hired that writer. That makes me happy as a business owner that cares about people – not just those employed by Copylab but also in our client companies.
And for me, that’s why outsourcing will remain a great strategy for our clients when the next downturn comes along.