What does it take to run an elite marketing program in-house? In this episode, we're going to discuss the best practices for building an internal marketing team as well as when and how to outsource projects with agency partners.
One of the things I have learned from my years working in the agency world, is just how labor-intensive good marketing really is.
From photography and video, to graphic design and content writing, putting together a team that can tackle any project is a challenge, especially on a budget. You will need a talented group of people to fill multiple roles and juggle multiple projects in your distribution business. This topic always triggers a bevy of questions.
Let's dig in and provide some answers to the most common question concerning marketing resources. Before we begin, go ahead and grab a PDF copy of the accountability chart below.
In-House or Outsource -- That is The Question!
The answer to that question depends on a couple of things. How much control do you want -- and -- can you afford to do the work in-house?
If you're the type of industrial entrepreneur who likes to put their personal touch on every aspect of your business, then you may not be comfortable working with an outside agency who will bring their own ideas and strategies about how to execute creative work or campaigns. I know one distributor owner who actually had some agency experience and himself was a former marketing director. As you can imagine, he had a difficult time delegating that top marketing role to anyone who didn't do it exactly like him.
Most importantly, can you afford to hire at least two or three full-time employees? Fully loaded salaries will easily cost you more than a quarter of millions dollars. In the most economic scenario, you will need a marketing director or manager who can organize projects and report back to top-level management on the results, a full-stack developer who can design and code, and a content specialist who can write copy and manage product content. They will need to wear multiple hats, but it's possible.
The question of affordability is really based on your sales. Marketing should be 5%-10% of your gross margin. So, if your gross margin is $5 million, your total marketing budget, including staff, should be between $250K and $500K. Don't forget you will have software, hosting, print, advertising, trade show, and travel costs to include in that total budget.
Working with an agency for website development, catalogs, and the occasional data or design projects can be vastly more affordable than carrying several full-time salaries. The problem with outsourcing everything to an agency is the amount of time it will take you -- the owner -- to communicate, provide feedback, and monitor the results. You should be spending your time honing the sales process, working with your supplier partners, and calling on customers. Working with an agency can be a major distraction for industrial entrepreneurs because you care so much about every detail of how your brand is represented.
The best practice is to use a hybrid approach to maximize your capabilities and guard your time. At Spinstak, we have worked with industrial distributors and suppliers of all shapes and sizes. We primarily work with small to mid-market distributors. This means that they rarely have a seven figure marketing budget. They simply cannot afford a full marketing team. In our experience, the highest performing, fastest-growing distributors have at least one marketing manager who outsources the vast majority of the marketing projects.
A good marketing director will serve as a bridge between you and your business goals and the agencies or freelancers who will execute the work. Ownership has annual growth goals. These are communicated to the marketing director. The marketing director will work with ownership to develop marketing goals that will help the company reach it's overall goals. Then he or she will develop a marketing calendar with projects, activities, and events that will positively impact those goals.
Rather than trying to do everything in-house, the marketing director with work with experts in web development, hosting, maintenance, catalog development, design, and content management. It takes nothing less than a small army to tackle everything on the calendar, but the good thing is that none of these soldiers are fixed costs. Everything is outsourced with the exception of the thought leadership and brand management which the marketing director carefully stewards.
If you're thinking about building an internal marketing team, be sure to download our Marketing Team Accountability Chart which outlines the roles and core responsibilities associated with a world-class distribution marketing team.
3 Core Marketing Functions for Industrial Distributors
Before you build a team or hire an agency to help you execute the game plan, you need to think about building an accountability chart organized by core marketing functions that you will need help managing. In my experience, every industrial distributor needs to do three things well:
Your website and digital marketing should be operated like it's own branch. Imagine opening a brand new location for your distribution business. You would need a Branch Manager, supporting staff, sales, marketing, and inventory. Your website should integrate with your traditional business and serve non-traditional buyers who prefer a hands-off digital experience.
Product content is the the difference between elite online distributors and the vast majority who have yet to conquer this mountain. You need to have a team dedicated to working with manufacturers, gathering content, normalizing the content, and updating your product database with the highest quality product descriptions, images, and rich data for both online and print channels. Print is not dead. Regular catalogs and seasonal flyers are still extremely effective tools to grow sales, especially when used in conjunction with an eCommerce website.
Have you defined your target markets? The best independent distributors have well-defined buyer personas and they exhibit where they are. Trade show marketing requires organized, forward thinking management, design, and coordination. Traditionally, this has been the domain of the sales rep, but advances in marketing technology and smarter buyers have made trade shows a more nuanced channel than in years past. You will want a team that understands how to design a booth that generates foot traffic and engagement. It's not enough to collect the lead. Once we have a contact, we need to qualify, nurture, and follow-up using timely email marketing automation. Otherwise, you could spend a lot of money for very little return.
Marketing Team Accountability Chart
This accountability chart is an example of the roles needed to build an incredible distributor marketing team. It is NOT a to-do list for your Human Resources department. Very few distributors will be large enough to afford to have a team this large. For most small-to-medium-sized distributors, you will likely hire one to three full-time employees to serve multiple roles on this chart and your will outsource the other roles to 1099 employees, freelancers, or marketing agencies. Let's go through each role and identify the key responsibilities.
The Marketing Director is responsible for defining and communicating a go-to-market strategy with measurable goals aligned with the overall company goals. He/She will manage the overall marketing budget and will handle communication between stakeholders/ownership and the rest of the marketing team or outsource partners. For most small and mid-market distributors, this role is filled by the CEO/Owner. Salary range: $85K - $125K. Reports to ownership.
The Merchandising Manager is responsible for sourcing, normalizing, and updating product content from your manufacturer partners. Ideally, he/she would utilize a PIM (product information management software) to maintain a master catalog as well as mutliple customer catalogs. They would also handle updating the pricing at least once or twice a year. This product content includes all media: images, videos, sell sheets, etc. This role can be outsourced while you are still small. Salary range: $50K - $80K. Reports to Marketing Director.
Digital Producer / Designer
If you are looking to compete online, an important role is that of Digital Producer / Designer. The Merchandising team needs high-quality images, video, and media to help showcase products for both online and print channels. If possible, this person would also be able to design printed catalogs, flyers, and brochures. This can be easily outsourced. Salary range: $45K - $65K. Reports to Merchandising Manager.
This person is the unsung hero of online distributor success. The Data Specialist does the heavy lifting inside Excel or the PIM to normalize product data, organize it, and syndicate it for printed catalogs or eCommerce websites. This role can be easily outsourced. Salary range: $45K - $65K. Reports to Merchandising Manager.
Digital Branch Manager / Digital Marketing Director
The Digital Branch Manager is responsible for all online sales and communication. He/She will determine the technology, platform, hosting, and maintenance services for the website. They will work closely with the Marketing Director to create KPIs (key performance indicators) and SMART goals (specific, measurable, attainable, results-oriented, and time-bound) for the website or digital branch. This would include CRM (customer relationship management software) implementation, email marketing, search-engine marketing, advertising, social media strategies, and analytics dashboard. This is probably the first person to hire if you are a small distributor looking to build an online sales channel, as this role is far too involved for someone to do part time. Salary range: $70K - $100K. Reports to Marketing Director.
This role is critical to maximizing efficiencies when working with internal staff of marketing agencies. Your Marketing Manager is a project manager who understands marketing concepts, strategies, and digital marketing software. This person will schedule emails, manage social media, and website projects. They will be the primary point of contact for your freelancers or agency partners. This is one role you want to keep in-house if you can afford it, but many agencies can provide this role for you. Salary range: $45K - $75K. Reports to Digital Branch Manager.
This person will design everything that can or will be viewed on a customer's computer screen or phone. Website pages, landing pages, blog articles, banners, social media, email design, etc. All of it goes through one designer for a consistent brand look and feel. This role is easily outsourced. Salary range: $45K - $65K. Reports to Marketing Manager.
This person will code everything that can or will be viewed on a customer's computer screen or phone. Website pages, landing pages, blog articles, banners, social media, email design, etc. In addition to writing code, this person will handle the technical aspects related to connecting technology or managing integrations. This role is easily outsourced. Salary range: $55K - $85K. Reports to Marketing Manager.
If there is no content, there is no internet! It is really important to have a good writer on your marketing time to help with everything from copy in emails and social media, to product descriptions, blog articles, and core page SEO. This role is easily outsourced. Salary range: $45K - $65K. Reports to Marketing Manager.
Most distributors will plan to attend between ten to twenty events over the course of the year. An Event Manager is responsible for managing an event marketing budget, developing a detailed calendar, coordination of booth design and equipment, as well as communication with sales team, customers, and prospects. This role can sometimes be handled by the Marketing Director or outsourced to an agency or member of the sales team. Salary range: $50K - $85K. Reports to the Marketing Director.
This person will do a LOT when it comes to event marketing. They will handle all the small stuff that never gets noticed like purchasing food and drinks, coordinating the signage, booth rentals, lead capture and follow-up. This role is not easily outsourced. If you are doing a lot of bigger events (like 5+ year), you will want this person on your staff. Salary range: $45K - $65K. Reports to Marketing Manager.
Admittedly, this role is a luxury, but one that could really set you apart from the competition. They will handle designing the booth, swag, handouts, and even multi-media. Salary range: $40K - $60K. Reports to Marketing Manager.
Who's On Your Team?
We gave you our ideal example. Now it's your turn! Who did we miss? Is there a particular role on your marketing team that you think should be on this chart? We'd love to read your feedback in the comments below.