Episode 1

RSM Founding Partner Bruce Rowley talks with Ryan Gates to answer many of the initial questions business owners have about outsourcing their marketing department. Key questions answered include: What kind of companies choose to outsource? Why do they choose to outsource? What is included in an outsourcing subscription?

Transcript

Welcome everyone to the outsource marketing department podcast. I’m your host, Ryan Gates. If you’re new, thanks for joining us, and if you’re returning then welcome back. Today, we’re going to talk with Bruce Rowley of RSM marketing, a firm in Wichita, Kansas, that specializes in outsourced marketing.

So Bruce, why don’t you to tell me a little bit about about yourself and RSM.

Sure, so I’ve spent my entire life doing nothing other than marketing and advertising. I was actually raised in a marketing and advertising family. So my experience belies my age, I like to think., I’ve been working in the business for 40 out of my 50 years and eventually took that to Los Angeles where I was really lucky to be on the launch team for the Lexus brand, and then took that around the world to China, Singapore, Europe and then back to the States. And one of the things that I learned was, number one, that marketing and consumers are basically the same everywhere in the world. And number two, I was able to see with brands like Lexis and others that I was a part of around the world, the true power that marketing can really have. Creating immense amounts of value in unbelievably short amount of time. I was lucky enough to start my career working on the Lexus brand, at the very birth of it, and so I watched while we, literally shoved market share from Mercedes Benz was the initial victim of that launch, and watching us shovel just truckloads of market share from an established brand like Mercedes into a brand new innovative brand. It was a true eye opener for me and being able to see the power that marketing can have.

So now you’re in Wichita, Kansas and you’ve got a company called RSM Marketing where you specialize in outsource marking Department as a model. What exactly… What is outsource marketing?

Sure, so outsource marketing is a subscription service that flattens out the fee for a client, and gives them access to an entire team of professionals, that enable them to get a huge range of work done every month at that flat fee. So I one week changes day-to-day and week-to-week. Essentially, they get on an hourly… Even daily basis, a different team to accomplish the changing needs that they have for their business.

So how does this differ them from an advertising agency per se when you’re working with traditional advertising?

Well, traditionally, an advertising agency is what it says in the name. It’s an agency. So they are an agent between advertisers and the media or advertisers, and production companies We’ve never called ourselves an ad agency where we named ourselves initially at the very beginning, back in 2010, we saw the need for a marketing services company, and we chose that descriptor, very carefully because what we saw was that the range of services that were needed by companies was growing, growing, growing, and the people were looking essentially for freelancers to do all these things, but then this crazy web of freelancers would overwhelm them and the freelancers never work together, and they find themselves trying to manage this team of freelancers like herding cats, and they got frustrated with that. So we wanted to offer a simple solution where companies could get all the different marketing services done, whether it’s website, email, SEO, SEM, writing blogs, shooting videos, posting videos on YouTube, managing their social channel, managing their reviews channels. All these different things that were just sort of crawling all over them and not getting done, could be done in one relationship with one flat fee. And we’re able to do that because we employ all those people, unlike an ad agency that has relationships with other companies and they have, all they’re really doing is passing through cost. We employ 40 different people at this point, that do all those different things.

Okay, so … You talk about the companies that are out there, herding cats, they’re looking for these services and you are a place where they can come to you and get all of them under one roof.
What does a traditional company look like that uses this outsource marketing model?

So we have clients that range in size from 5,000 employees down to one employee. So, size is not really the thing that determines the kind of client we have, it’s really mindset and all of our clients are absolutely growth-driven, and they absolutely believe that their growth will come through marketing. We’re not, so we’re not so marketing focused, to believe that marketing is the only solution. Certainly there are companies that grow through a mergers and acquisitions for example, or maybe they grow by chasing cost down to the bottom by continually moving their manufacturing to a cheaper location, trying to lower their cost in the market. Our clients believe that their growth and their success will be driven through marketing, every single one of them and they are rabid about it.

Gotcha. So I’m picturing the company of one you talk about… And I can see that obviously it’s a great model for them, it’s the ability to go and get all these different branches of marketing. How does a company that has a larger company where they have some of these maybe things already sent place. How would an OMD… an outsource marketing, how does that look for them?

It’s a great question. So it is obvious for the small company that it’s very easy. We typically work with the owner of that company, whether it’s… You know some of those companies are 20 or 30 people, but they don’t have a marketing department at all and so we work directly with the owner and we act as the marketing director and their entire team. And we meet with the owner to set to make sure that what we’re working on matches the priorities of the business. For larger companies we work with a healthcare system that employs.. let’s see.. more than 5000 people. They have their own Executive Vice President, Marketing Director. They have a PR person, they have a marketing manager. What they don’t have is the ability to get all these things done. And so we’re really… We are the extension of all those people getting not just the typical things that you would expect an ad agency to do like making simple print ads and things like that. But we produce even in-house videos for them, we produce signage that needs to happen inside the hospital, we manage and execute literally every single little thing. So this is a really great example because in the market, where this healthcare system is there are two equal-sized healthcare systems, one of them are client employees of marketing department of three, the other employees of marketing department of 30.

Oh wow, so that’s a big difference. So, so in the system, you talked about you’re typically working with a CEO, a president, ahead of the company. When I think about outsourced marketing I think about anything outsourced marketing. With marketing, my marketing director is right down the hall, so if I’ve got an idea, I can go and I can bark in my market director right away and get an idea going. So how do you approach that at that need, that desire to constantly be there? How do you integrate into these larger companies?

Sure, so it’s a funny thing. When I grew up in the ad business, we had all these meetings with marketing people, and the meeting was generally to review all the work that we were doing, and we talked about very tactical things that were in-progress… status meetings…. We don’t have status meetings really anymore, we don’t. The meetings we have with CEOS, or owners, or managing partners, they’re not interested in having a status meeting. All of the status of the work is really done in real time. We use project management software that our clients can see, that keep our clients updated, on the progress of everything. If they ever wanna see what the status is of all the different work that we’re doing, they can simply click on a link and see what we’re doing. What that does is it means that the time that we spend together which, for many clients, that’s 30 minutes a week, sometimes it’s 30 minutes every two weeks. Sometimes if it’s a big client, it might be an hour and a half every week that we spend together. But that time is spent really understanding what are the priorities going forward of that business and how are we aligning the tactics that we are working on to the top highest value priorities of the business going forward, not looking at the day-to-day tactical kind of stuff, the lower value conversation, the CEO is not interested in that. They can see that in their own time or if they feel frustrated or they’re worried about something, they can click and have a look at that.

So it sounds like it’s very much a high level, strategic relationship that you are then executed the tactical as well?

Very much so. I mean, we want to make sure that the subscription that they are paying, is focused on the highest value activities that we can do for them. We wanna understand where’s the highest margin parts of their business. Where can we help them strategically move their business to where they want it to be. I think I can say in the beginning of my career, I didn’t really understand all that stuff. When I worked at an ad agency, I really was just focused on making ads. Today I’m really proud to say that not only do I understand, but the team of marketing directors that we employ here can tell you the inner workings of the clients that they work with. They can tell you the margins, they understand what drives those margins in that in that client business. Just like what you would expect. A marketing director to know.

Absolutely! So… So if I’m a company and I’m sitting here exploring, I need to have a marketing director. What what’s the driving force for me to… There’s got be models where in-house makes sense to models were outsourced makes sense. What is the difference between our in-house versus an outsource and where is the outsource all come into play and create value?

Boy, it’s hard for me to imagine a place where in-house makes sense. But I could say if you are the kind of CEO where you absolutely want to be making last second decisions every single day and you feel the need to have the control of knowing that you can call your team together at 7 at night and meet in your office and have a whole new campaign ready in an hour to roll out. Maybe outsourcing isn’t for you. But we find that we are faster and more cost-effective and more marketing effective than in-house departments are because, we are applying specific expertise to each area. We’re not counting on what we would call a marketing unicorn. A lot of companies they have where they’re seeking this mythical beast.

The silver bullet.

Yeah, yeah, sure. The 24-year-old kid who knows how to do all the things that they wanna do and can do them all at a very low cost and handle everything. I’ve yet to really find one. I’ve seen variations of it, but typically this is somebody who’s really good at one thing and they can kind of fake their way through some of the others and when they go on vacation, everyone panics.

So in the unicorn model, so if you’ve got… Maybe there’s not one unicorn but maybe you’ve got a of couple of stallions, you’ve got two or three really great individuals that are great, they’re a jack of all trades, maybe a master of some. So in that model, why does the OMD work? Verses the in-house?

Well, frankly, we still hold an advantage in the sense that we employ enterprise-level marketing software, for example, that we pay an enormous amount of money for every year, and that we apply across our different clients. So we have clients that are paying us a few thousand dollars a year but they’re getting access to not just people, but they’re getting access to software. Where an individual license might be, 20 or 30,000 a year just to use it.

So it’s a high value proposition. And it sounds like it’s very much also is, you could have a master of one or you can have a master of… I think you said 40 people on your staff.

It makes a big difference when you have someone who truly understands the details of social media marketing for example and that’s gonna be a very different person than the person who understands email marketing. Oftentimes that’s not the same person and getting somebody who’s good at email marketing, and getting somebody who’s great at email marketing. The return on that the, the return on that investment is radically, radically different.

In my experience, when we talk about these unicorns. I’ve met a lot of people that are, they’re unicorns because they’re very executional. They understand how to do the email marketing, how to post on social media, but the understanding of what and why and targeting isn’t there as much. I assume this is something you’re seeing a lot.

Yeah, that’s another really big part of the value proposition here and that is the marketing director, who is helping translate the business priorities into the tactics that those experts are deploying. Oftentimes, even if you’re employing a unicorn or a couple of Unicorn like, young people on a marketing team, I’ve had clients describe what happens next as the feeling of being packed to death by chickens. Because you have these people constantly asking you, “Should I do this, should I do this? What do you think? Should I do this, should I do this?” And they wanna be out of the game of the hour by hour direction to these folks. The flip side of that is, if they don’t hear anything from those people, those people might be executing tons and tons of tactics in the complete lowest value direction of the business because they’ve just not been told any different.

Sure. So you’ve come from the advertising role, I come from the advertising world. Here, we are talking about “outsourced marketing”. So what are some of the trends that are happening in the marketplace, right now in the business world that has brought this model to light?

Well, we launched our business at the lowest point of the great recession, and we initially launched it based on the idea that companies were kind of poking their head out after the recession and we’re trying to figure out, is it a good time to invest in marketing again? And they didn’t wanna hire people and we knew a lot of folks that owned businesses and they were asking us… “Hey, do you know anybody that… If we could hire a part-time to be a marketing director for us or”… And we kind of understood that what was happening was people didn’t wanna fully commit, and we launched the idea based on that. But what’s interesting was, what happened next, because as we came out of that recession the other trend really revealed itself, and that is this exponential expansion of marketing tactics that just overwhelms companies and things that used to be considered a nice to have. If you got it done, like do you have a YouTube channel? “Ehh
We don’t have one but we don’t really… It’s not really that big of a deal.” Well, it is a big deal now. You’re not paying attention to your Google reviews. “Ehh so what?”… Well, it’s a big deal now. And so, even for small companies, they find that these things that used to be considered optional, nice-to-have kinds of things are really… And truly a cost of entry tactics today and the list of costs, cost entry tactics keeps growing. So every month it appears that something else has sort of grown from this upstart interesting thing into something that you have to have or your competitors are gonna eat your lunch with it. And that has driven the need for… First of all, people run to freelancers, so they run to… Look at the growth of Fiverr. Fiverr grew 400% in the last six months. That’s a signal of people looking for a solution, but what happens is their journey starts with Fiverr and it very quickly leads them to an understanding that, employing five or six different freelancers through a platform, an online platform, means that you now have to manage and direct those people.

Exactly use thinking that’s, that’s a lot of management right there.

Right? Again, you’re being packed it at my chickens.

Yeah, I does not sound like a fun way to go.

Not that they are chickens, but the idea of A… And you’re just sort of constantly being picked at by these things that need attention.

Sure, so… All models, have their plus size there. downsides to it, or they have models in which they don’t work. So what are some of the ways… Where either you have seen or can see potential for an outsource marketing to not work for it to fail in a scenario.

Absolutely, it is not for everyone. So, if you have trouble letting go, this is probably not the right model, for you. I you feel like you can do everything better than everyone else, this is not the model for you. I tell people if you don’t believe in marketing, if you secretly believe that marketing is just a whole bunch of hooey that you’re throwing money…

Don’t spend money on marketing…

Yeah, this is… We are not gonna be a great fit. I always use the example. Would you go into pizza restaurant and when they bring you the menu, you just start telling them how this is ridiculous. You could make all these pizzas at home, you could just go to the grocery store and buy all these ingredients and go home and make them… Of course you don’t. Maybe some people do because some people certainly do, show up and say, “Well these are all things I could do myself and my answer is, “Well, then why are you here? Why didn’t you?”

So it’s the uh… “I don’t wanna make the pizza, I want someone to make the pizza for me”

Exactly,and there are hundreds of thousands of restaurants, pizza restaurants, that prove every day that people don’t want to make their own pizza and so we’re not claiming that we have the most amazing, unique magical pizza recipe on the planet that can never be replicated. We aren’t… We’re simply in many cases. I tell those people look… I’m not telling you that we’re magical elves that are going to do this in some amazing way, that no one else can. We’re good, don’t get me wrong. We are very good and we employ professionals that are constantly trained, and certified and given the best possible tools to use, but ultimately you could build your own. But it is going to cost you considerably more than you will spend here, and that’s just not a good business.

Absolutely. So as we talk about potential for failure, in these, and if you’re not willing to let go and to get into marketing..

Right. If you’re the kind of guy who always wants to grow your own wheat, to grind your own flower, to make your own special crust, to make your own pizza… Go for it.

Well let’s talk about the…Tto wrap up, let’s talk about the OMD’s that are working. So what does it look like for an outsource marketing client where it is working and what are they doing to get the most out of their subscription?

They have a very crystal clear laser-like plans for their business. They understand what they’re trying to achieve, so they can give us very, very clear, your goals and if we have clear objectives, and goals that we can report back to, and they believe in the power of marketing and can then see how what we’re doing is tied directly to their goals and objectives. That type of partnership is very valuable. And we have been very lucky to… very fortunate to have worked with many different companies that have seen tremendous results that are very measurable. And many of these, I’ll just add that, these people are also a realistic. They understand that we will make experiments. Wwe will almost always experiment first, to prove out a hypothesis that a tactic or a message is effective and when we find an effective tactic and message we then go all the way in on that one to chase that particular tactic to its point of diminishing return.

If you might give us one quick story about an outsource market, department client, you don’t have to name a client if you don’t want to you, to just tell us one example of a great story of a client using outsourced marketing to get that growth they’re looking for.

Wow, you know, I would say… I’ll go back to this healthcare system. Healthcare is not a consumer-driven marketing industry, typically, but we work with a very large health system several hospitals lots of clinics and getting them connected to consumers has been a phenomenal example. So, they run-ERs, all over town. And early on, we had a hypothesis that we wanted to make it easier for people to understand what was happening in the ER and connect with the ER. So we experimented with a couple of tactics we created systems that allowed people to check in. Or at least, I would say, let her know that they were coming. We made it so super easy for consumers to do that we promoted that in the market. We then tied that to an internal wait-time tool that the hospital had and we worked with them to turn that into an external-facing tool. We paired those things together and we absolutely created… Just in the last five years, hundreds of millions of dollars in value across this entire system through increases in volume measured… increases in volume.

Wow, that’s awesome! Well Bruce, thank you so much for join me, I really appreciate you taking the time to sit down and talk to us about RSM Marketing and the outsource marketing department model.

It’s really fun, and we keep adding a couple of clients every month. So we really feel like this is a wave that we’re riding. Based on a market need, not something that we’re trying to push out on to people, so it’s a lot more fun to fulfill a market need than to try and convince people that you have a role. Thanks!

Thank you!

Thanks for listening to another episode of the outsource market, department podcast, your source for all things OMD.

If you have questions over the topics cover today or suggestions for a future topic follow the link in the description of this episode.

I’m Ryan Gates and I’ll see you next time.

 

 

 

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