Think it over before outsourcing social media

Image Source:Jason A. Howie@flickr (CC BY 2.0)

As my last blog indicates that customer experience on social media is vital, the operational level becomes a focal point of marketing strategy. Therefore, I want to explore more about the problems of outsourcing social media, which is the most common task in today’s marketing agencies and can do a great impact on the brands.

Is outsourcing really a rational and economical choice?

Many companies tend to outsource their social media this day. There are voices suggest the cost to hire social media expert/manager is relevant high, which is the dominant factor makes outsourcing seem like to be a good choice other than taking social media in house. But on the other hand, we all know that cheap solutions in the short term sometimes become expensive in the long term, so the question is: are companies relying on their traditional instinct of budget saving, hence underestimating the value of customer insights brought by social media?

A research of pre-outsourcing decision process and post-outsourcing supplier management was conducted on 14 British companies (Ying Fan, 2000); it shows the cost reduction (64%) is the primary driver of most outsourcing deals. The result corresponded with the other literature (Bettis et al., 1992) that suggests most outsourcing deals are urged by the desire of cost reduction and unburdening problem areas of the company.

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(Ying Fan, 2000)
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(Ying Fan, 2000)

The responses also show that peripheral activities are predominantly outsourced, with 57% respondents inclined not to outsource activities that have direct advantageous impact on their companies.

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(Ying Fan, 2000)

There is also an interesting and conflict fact revealed in the research. A number of 57 respondents agreed the statement says ‘we outsource where others can do it better’, while the last questionnaire shown most of the respondents refer to outsource peripheral activities than the activities with great potential.

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(Ying Fan, 2000)

Although the research above was conducted in 2000, it does not look like that most companies’ mindsets have changed with the digital era today. Managing social media channels is not just handing over to someone with good knowledge, but tightly related to the business strategy, brand value and long-term goal, these are all pointing to one primary purpose of social media—communicating with consumers.

Below are three main points I regard as the advantages of taking social media in house that can favour the company image and increase satisfaction of customer experience.

  1. Precisely deliver the core value of brand

The social media platforms, such as Facebook, Instagram and Twitter are the most obvious representative of brands this day, and where people are most likely having the first impression of brands.

One thing evident is that marketing agencies usually do not fully understand the core value of brand. Appealing contents can catch the eye of people successfully, but the brand impression of reliability, faith and recognition are the essential foundations that determine whether customers will trust a brand and eventually fulfill their purchase.

According to James Heaton, the president of brand strategy agency Tronving Group says, “Brand is what sticks in your mind associated with a product, service, or organization—whether or not, at that particular moment, you bought or did not buy” (James Heaton, 2011). To be more specifically, the message people receive from brands can influence them to make purchase decisions without even noticing, and it can make products stand out among other merchandises even before customers have seen or touched the products in person.

In other words, brand image is costly— and so does customer loyalty. The most expensive thing is not to spend enough on retaining the relationship between customer and brand. Social media is the ideal place to present brand ideas, and adjust your business strategy through observing user engagement.

  1. Rapid reply to emergent public relations crisis

When public relations crisis happens on social media, it could be hard for marketing agencies to react promptly, especially when crisis could have an effect on the reputation of company.

For one particular example that occurred in April 2017, the president of one of the Taiwan retailers, Chuan Lian Ltd. made an inappropriate remark about young people when he was interviewed on TV. As a result, the indignant crowd flown into the Facebook fan page of Chuan Lian and left numerous negative comments. The marketing department of company held meeting immediately with their marketing agency and published a statement on FB fan page the next day as respond. This case shows that when severe public crisis happened, most of marketing agencies do not have the authority to make respond in behalf of the enterprises, hence these agencies are usually unable to make rapid reaction in real-time.

Some may argue that companies need experts from marketing agency to help them work out public relations crisis, but would not it be better if someone knowing the interior strategy well handles it? Through this way, not only will company earn experiences from problems resolving, but to know their customers better form facing people’s demands directly.

  1. Long term relationship with customers on social media

It is important to develop a long-term social media marketing strategy for companies to retain a long lasting relationship with customers. Especially in this digital era, customers are taking control of where they want to connect with other customer or a brand.

However, marketing agencies are often focusing on short-term objectives that can measured by hard numbers, such as increasing monthly sales, cost reduction and member growth through social media marketing campaigns. But developing deep relationship with customers takes time, online users value interactive ‘conversations’ to define their relationship with corporations. Besides, the motivations of people using social media and customer investments via social media should be considered as well. (Donna L. Hoffman and Marek Fodor, 2010)

On the other hand, it is a realistic truth that marketing agencies are up to their neck in works with clients from various disciplines, the time and efforts they can spend on analysis for each business is less. Since Customers’ preferences are varied in different domains, company could conduct social media strategies based on their specific industrial know-how and seize customer insights more directly. Moreover, cooperates can improve their marketing strategy accordingly and generalize the customer trends for long-term marketing plan. Thus, I would argue that taking social media in house is essential to maintain customer relationship with good quality, and giving corporations the first hand insight of their customers.

Example of taking social media in house

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Open Grid Scheduler / Grid Engine

The international sports brand Nike decided to bring their social media in house in 2013. In addition to building a tighter relationship with their fans, Nike aimed to have greater control of its social media data to develop innovative digital services in the future. Instead of making marketing agency manage their marketing campaigns, Nike can work with marketing agency on things that have less expertise on (Seb Joseph, 2013).

Though it is a seemingly costly investment, but just like many larger businesses have realized they can effectively communicate and build customer advocacy in the front line that better than external agencies ( Nat Schooler & Kinetica, 2015), this could be a cost-effective solution for businesses in long-term. Through this example, we can tell the businesses’ desires to build a more straightforward connection with its customers and the full control of digital data are the incentives make firms want to take social media in house.

Taking in house: make the most of communication on social media

In summary, taking social media in house is an valuable and worthwhile marketing investment in long-term strategy. Not only can brands keep conveying accurate messages to customers with its innovative values by time passes, but also meeting customers’ higher demand of instant reply. Given those reasons above, companies should reconsider before outsourcing social media and communicating with customers in accordance with the company image they want to present.

 

References:

Ying Fan, “Strategic outsourcing: evidence from British companies”. Marketing Intelligence & Planning, Vol. 18 Issue: 4, pp.213-219. 2000.

Bettis, R.A., Stephen P. Bradley, and G. Hamel. “Outsourcing and Industrial Decline.” Academy of Management Executive 6, no.1. February 1992.

James Heaton. “The Difference Between Marketing and Branding.” Tronvig Group. 2011.

Donna L. Hoffman and Marek Fodor. “Can you measure the ROI of your social media marketing?”, MIT Sloan Management Review. 2010.

Seb Joseph. “Nike’s decision to bring social media in-house is a sign of things to come.” Marketing Week. 2013.

Nat Schooler, Kinetica. “Nike Takes Digital Data and Social Media Marketing Seriously.” IRIS. 2015.

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7 thoughts on “Think it over before outsourcing social media

  1. I agree with these advantages of doing social media in-house, especially more direct information telling and more flexible interaction with consumers. However, from my own working experience, sometimes it is better and more efficient to give some parts of social media to the professional agency, such as basic and regular posts, to save brand’s time for more challenging and timely tasks and also to train agency to have a better understanding of the brand. I think it’s crucial to use both in-house and outsource for social media.

    Liked by 2 people

    1. Hello Jasmine, I appreciate your comment very much.
      It is worth to explore more about partly outsource social media, but to what degree? I suppose the content/ campaign that attract the most people to engage should be managed by the firm itself, and company can get to know the preference of their customers through testing different kinds of contents.

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  2. I think this is a very interesting topic, especially in today’s digital era, enterprises need to communicate with consumers through different channels. The number of replying to customers should be great. From my point of view, I think this is partly feasible, just like some companies outsource their call centre.

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    1. Hi Ya-Yun, thanks for your comment. I believe companies should be able to communicate effectively with their customers on social media and extract useful behavior datas for long-term strategy. In terms of the companies that outsourcing their call centers, I suppose the customer service should be trained well 🙂

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  3. Personally, I totally agree with your confident evidence that in this digital era, companies should do their marketing or consumers insights on social media by themselves! Take Tesla for example, Elon who is CEO does marketing himself on Twitter, engaging himself and companies with a lots of costumers. Even better, he never hides any error his companies made, in the opposite, he shared on Twitter! Above all is I think this is nowadays firms should change their way on marketing, just go direct to the market rather than outsource to other professional agencies because they won’t understand more than YOU, yourself!

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    1. Hello, I appreciate your strong opinion, and you also gave out a practical example of Tesla 🙂 So I assume people would grow their trust on a brand if they think the it is being ‘honest’ in some degree, which is hard for some big corporations to work in practice. I agree with that social medias should be handed to someone knows the brand well.

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  4. I think we can create the content and manage the platform in-house and outsource the execution. Since agencies can not fully understand the product, companies can create the content and monitor the platforms by themselves. Agencies can help to establish strategy, produce content, and analyze performance.

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