Summer 2005

Welcome!

We are pleased to present the Summer 2005 issue of The Apex, the quarterly newsletter of Cambridge Consulting.

Cambridge Consulting is a leading provider of high-tech marketing and business development expertise for Fortune 500 and top-tier technology clients. From initial strategy through tactical implementation, Cambridge Consulting delivers customized solutions that help you expand existing markets and launch new products and services — right now, in real time. By bringing together innovative companies and high-performance professionals, we're building relationships that build success.

To find out how we can help build your success, visit us at www.cambridgeconsultant.com or, for immediate response, please call us at 800-436-7185 and ask to speak with a client representative.

When Staffing and Outsourcing Make Sense for your Marketing Organization

Jim Judge, Principal, Cambridge Consulting

In today’s global workforce economy, staffing and outsourcing models are acceptable alternatives to permanent hiring when it comes to IT, HR, legal, manufacturing and, yes, even marketing, within small and large enterprises. Both organizational models offer the common goals of reduced cost and greater work efficiency, but not every vendor can deliver.

The staffing model may have been around the longest, but outsourcing continues to grow across many industries and functional disciplines. Even core inbound and outbound marketing disciplines such as Product Management, Product Marketing, PR and MARCOM are delivered by an outsourcing model.

Don’t mistake the terms business process outsourcing (BPO) or the new buzz word “insourcing,” as new. This is just a repackaging and repositioning to avoid some of the ugly baggage associated with outsourcing and the ties to off-shore job loss. The diagram below provides a simple illustration on how outsourcing encompasses the people (staffing model) plus the processes (business, technical, etc.) and programs (functional work material and deliverables). Often you’ll hear the process and program components defined as the “best practice” value-add.

Stepping through the Process
To understand when the time is right to staff or even outsource a marketing function, follow these three easy steps.

Step One: Review your business objectives in real-time.
Staffing and outsourcing are business tools within your portfolio to help you achieve your business objectives now. Cambridge provides a staged approach to growing your business in real-time. At each stage you have real-time objectives that bring people needs and perhaps the infrastructure to match. Where you may lack the business processes or no longer desire to maintain a core competency, you can now extend a staffing need with a broader outsourcing approach. Many high technology companies that maintain an engineering focus consider marketing outsourcing as a nature extension to a staffing plan.

Step Two: Assess your organizational resources and capabilities.
This is where the marketing executive gut check comes in. You have business objectives, and perhaps enough people to fulfill them. Or maybe not. But in the end, do you have the right people in the right positions? Staffing may come to mind first, and is often called upon to augment your existing marketing expertise for the short-term need. Outsourcing can also be considered to replace a marketing group or in many cases introduce an entire market functioning to the organization. Either model is worth considering as your business grows or, in worse cases, even declines. The task to hire, fire, train, re-train and ramp up in-house expertise can be costly and put you at a competitive disadvantage.

Step Three: Choose a vendor-partner.
The staffing and outsourcing industry has grown in recent years, with many vendors to choose from. We suggest you start by applying the same basic due diligence used for selecting any supplier, especially a vendor-partner. Next, when considering staffing or outsourcing a marketing function, contract with a vendor as if you are hiring for an internal position. Don’t contract an IT staffing vendor to provide a marketing person, and don’t expect your marketing staffing vendor to provide strong HR resources. Larger vendors offer you a one-size fits all vendor-manager approach that might at the surface reduce costs, but in the end will cause greater inefficiency.

Like hiring the function, choose a marketing staffing vendor that provides both functional and industry expertise. A marketing staffing firm that might help General Motors with a competitive program is probably not nearly as knowledgeable on the enterprise computing or mobile networking competitive landscape as a firm that works primarily in the technology industry.

Your decision doesn’t have to be final.
If a staffing or outsourcing vendor is inflexible, then a big part of the value proposition goes away. You like to hire professionals within your organization because it gives you both choice and control over your resources. Marketing is considered to be the “last bastion of creativity” within the organization, and change should be considered a vital part of the process. Vendor-partners should offer you the flexibility to change your staffing needs on the fly. This might even mean bringing those functions back in-house when business objectives warrant it and marketing becomes your competitive advantage.

Java-Enabled Mobile Platform Use

Java has made the cross-over from strictly an enterprise platform to a broader mobile platform for both enterprise and consumers. As the chart below shows, according to Juniper Research, by the end of 2005, a majority of all mobile devices will be Java-enabled.

VoIP Takes the World by Storm

Helen Feber, Independent Consultant

Our society’s increasing desire to be able to communicate at all times from any location is creating a seemingly insatiable demand for voice and video services. This demand, along with a convergence of many powerful economic, cultural and technological forces, are driving traditional telecommunications subscribers to look for alternative solutions. Enter Voice over Internet Protocol, or VoIP.

First introduced in 1995, VoIP facilitates the transmission of voice data over the Internet. It is performed in the digital domain, which allows for a sophisticated set of services to be offered to users, such as intelligent call routing, seamless roaming, improved audio quality and powerful integration with a wide variety of computer and telecommunications hardware.

By enabling conversations to be held over existing Internet connections, it is possible to avoid many of the costs and limitations of standard telephone services that typically require discrete and dedicated infrastructures.

Many analysts predict an ‘order of magnitude’ increase in the number of U.S. residential VoIP subscribers between 2005 and 2009. Today, the VoIP landscape is dominated by traditional carriers and Internet Service Providers (ISPs). However, the phenomenal business opportunities for product and service purveyors will attract even more contenders, including telcom equipment providers, cable companies and new Internet Telephony Service Providers (ITSPs).

Although currently lagging behind residential usage, enterprise IP telephony is beginning to revolutionize traditional business offices and call centers, with vendors like Cisco leading the charge. By coupling VoIP with wireline and wireless technologies, companies can provide employees with hugely flexible phone and PC connectivity.

Dedicated telephone extension numbers are now no longer anchored to physical locations. Wireless-enabled handsets and PCs utilizing VoIP services can provide all of the traditional office-bound capabilities virtually anywhere. The need for duplicate investments in discrete infrastructures for voice and data networks is becoming obsolete.

Vendors are targeting specific market segments with price and service delivery differentiation. This situation benefits residential and business customers as market forces drive down IP telephony service fees and providers strive to improve services, features and applications to remain competitive. However, to avoid a cut-throat pricing war that leaves no viable survivors, it will become increasingly important that consumers are moved away from price-motivated decisions and emphasis is placed on the features and benefits of VoIP-related services.

The ongoing development of VoIP services and technologies is somewhat inevitable, but there are issues—such as traditional wireline and wireless carrier resistance, potentially complex implementation and the selection of pervasive standards—that need to be taken into consideration for successful deployments. On top of this, U.S. Congress is lobbying the Federal Communication Commission (FCC) to become more involved in regulating VoIP.

The flexibility and adaptability of VoIP technologies will reward the innovators that can deliver compelling, differentiated and affordable offerings. Many of these products and services will provide consumers with lowered costs and enhanced capabilities. The opportunities for both consumers and providers are potentially enormous. Executed correctly, the proliferation of VoIP technology has the potential to be the catalyst for widespread change and mutual benefit.

Segmentation for Resource Allocation

Andy Fitzpatrick, Principal, Cambridge Consulting

What is the true value of rigorously segmenting a relevant business market?

Traditionally, market segmentation exercises have been conducted for purposes of understanding exactly which segment or subsegments of customers represent the core target market.

While this is a valuable and necessary exercise, it doesn’t represent the true purpose of segmentation. The most compelling argument for segmentation lies in the application of marketing resources to address not only the core target market, but also those tertiary markets that emerge as a result of the segmentation effort.

Said another way, a properly done segmentation exercise is not an end in itself. Instead, it sets the stage for one of the most important (and expensive) activities that a company can undertake—creating and executing marketing activities and initiatives that drive the marketing message to the intended targets.

Just 20 or 30 years ago, it could be said that marketing expenditures were not put under the same scrutiny as other corporate expenditures (such as capital equipment) because the expenditures could not be easily measured (e.g. how do you calculate the return on investment of a $20 million television campaign?).

Well, times have changed. Today’s marketing executives are responsible for justifying their spending and investments based on a number of variables, not the least of which is ROI. A rigorous segmentation effort is not cheap, and therefore the results of the effort need to pay a return that can be translated into dollars and cents.

The segmentation exercise should go beyond identifying a series of submarkets large enough to target marketing efforts, relevant enough to the company’s business, reachable through one or more marketing mix variables and different enough from each other to warrant a separate distinction. The effort must not only suggest the related submarket needs, but also some effective ways to reach the potential targets.

This is important because marketing executives must now align their scarce budget dollars to those activities that drive the company’s marketing messages to the key submarket constituencies in the most cost efficient manner possible.

The key point here is that, to make the segmentation effort pay dividends, market segmentation efforts must result in multiple subsegments that can (and should) be addressed differently by the marketing group. Once the segmentation effort is complete, each subgroup can be assigned a level of importance that can then closely correspond to a marketing budget (or not) as appropriate. Marketing dollars can be spread over a number of potential submarkets such that carefully tailored marketing initiatives and related messages that appeal to each distinctive subgroup can be developed and executed.

When trying to justify expenditure levels for different activities, executives can use the segmentation documentation to support various marketing activities in combination with a budget appropriate to the subsegment business potential. Using some of the more common analytical methods now available, marketing executives can then go back and measure the relative effectiveness of each effort in a post-campaign analysis. Based on those results, they can see which efforts paid the most dividends and adjust the marketing expenditure levels as appropriate in the next fiscal cycle.

This all leads us to the conclusion that segmentation efforts should not only be used for identifying the core target marketing, but also for following through with a marketing resource allocation plan that adheres to your segmentation results and that acts in concert with your business strategy goals. Having done so, the results will speak for themselves.

Interested in finding out more about Cambridge’s staffing and outsourcing solutions? Please call (800) 436-7185 or email us at consult@cambridgeconsultant.com and reference any of these articles for an initial project discount.