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11 Replies Latest reply: Mar 15, 2010 10:18 PM by WiMSSMing RSS

Does Outsourcing Make Sense in this Economy?

franklinb Novice
Currently Being Moderated
Most references to outsourcing make me think of workers being let go to ship jobs overseas. The vision of outsourcing is that of a huge phone room in India with hundreds of reps handling customer service calls for help with equipment or software issues for big US companies. That really happens, but there are other outsourcing opportunities that do make sense for smaller businesses.

Here in the US, there are many small to medium sized business owners who have moved to online website marketing to increase their sales and customer base. Many of them are not web trained and experienced though, so they are forced to hire that work out. This whole process can be daunting to say the least.

Conventional web marketing companies here in the US are expensive to work with. They have the skills business owners need to perform internet and social media marketing, but the cost is so high that is forces many small business owners to attempt to do it themselves. They need blogging and social media activity to get the attention they need online, but they just don't have the experience to make it work correctly.

What if a business owner could outsource that work for $5 an hour? That would be an attractive price point would it not? This is where outsourcing really does make sense for many small to medium sized businesses. It is far cheaper to outsource internet marketing and social media promotions then most people think. A company I represent does perform that service and much more, and they are located in the Philippines.

123Employee
http://bblmedia.com/123.html*

Some business owners could afford to hire more than one employee to do their marketing online, while others may only be able to afford one. Whatever the circumstances, 123Employee has a plan to fit the budget, at an average cost of about $5 an hour per oursourced employee. Tailored marketing plans are available upon request.

The thing that makes this company so attractive is the work force they have there in the Philippines is highly experienced in social media and internet marketing function and strategy. Once a business owner has hired them, they just need to understand the goals of that business and it's product line. Then they begin the campaigns needed to create buzz on the internet about that client's products and services.

So my contention is that outsourcing does make sense in limited and highly targeted markets, through web channels of social media like Twitter, Squidoo, Blogger, Facebook, Linkedin, Stumble, AIM, Ask, Bing, Google Groups, Yahoo Answers, Technorati and hundreds of others. The employees at 123Employee have that kind of experience. They also can write articles about any business and do appropriate article marketing as well.

123Employee
http://bblmedia.com/123.html*

Click the link above and you will be invited to receive a free ebook with no further obligation. The ebook is called "Outsource This", written by company founder Daven Michaels. It contains valuable information to help a business owner make the decision about outsourcing for online marketing functions.
  • Re: Does Outsourcing Make Sense in this Economy?
    RedTieMedia Novice
    Currently Being Moderated
    This is one of the reasons why many Web Designers cant find work in the united states......Because of Oursourcing.
    • Re: Does Outsourcing Make Sense in this Economy?
      franklinb Novice
      Currently Being Moderated
      I agree to a certain point, but I am also a web designer and I never have trouble finding work. It is the rates many designers charge that causes companies to look to outsourcing. I did not include the term "web design" in the post above. My specific promotion application is for "social media marketing" or general web marketing, I personally know several business owners who do not have a clue how to do this type of marketing.

      One guy I know owns a business making small campers and trailers, but he has no idea of how to do social media stuff. He got some quotes from local small businesses who do this but the quotes were so high he simply could not afford to hire any of them. Heck, to do social media marketing, he can't afford to hire me either, so he is considering the 123Employee option right now.

      I finished a project last month for a small company who needed their site fixed so it worked from an seo standpoint. After it was done I talked to him about social media applications, but he told me he needed to see if he could talk his daughter into doing it. That type of thing is happening all over right now as small businesses try to get in the mix as best they can. Unless they have someone on staff who knows how to do it, or they do it themselves, it doesn't happen at all.
      • Re: Does Outsourcing Make Sense in this Economy?
        RedTieMedia Novice
        Currently Being Moderated
        I agree with you on the fact that there are lots of small business owners that have no idea about social media aspects to advertise their business. I also agree with you on the fact that most web designers have high rates for design and development of website ((not even counting the extra things that go into the site after the design part is completed.))

        Red Tie Media is run out of Orlando, FL ((tons of designers in this area)) so our prices are competitive with everyone around us. These things do add up in price and yes outsourcing helps with marketing but when it comes down to the web design portion and the fact that they work for so cheap...but you also get what you pay for.

        I was not ripping on your post at all I just felt that it needed to be said since this was the only outsourcing post that caught my attention.

        So again, this was not an attack on 123Employee or outsourcing for Social media marketing, just a general statement.
        • Re: Does Outsourcing Make Sense in this Economy?
          vinod1978 Novice
          Currently Being Moderated
          I'd like to throw in my 2 cents:

          If we look at outsourcing from a client's perspective then objectively I would say that outsourcing is a viable option in many cases, but not all.
          If clients know exactly what they are looking for creatively, and technically then outsourcing might be the best option as it would most likely be more cost effective.
          In some cases a project could be so complex that the constant back & forth discussions between the client and the end developer might be so great that the loss of time, and frustration might outweigh the potential savings from outsourcing a project overseas.

          Before I started my own company I worked for a telecommunications company that moved their operations office to Eastern Europe. I was the lead project manager and we quickly discovered that the only way to have quality customer service, and technicians was to continually have employees travel to the european office regularly to be train and manage our european counterparts. This was still a cost effective solution saving the company millions of dollars in labor - and that is why I can not say that outsourcing doesn't work - it does, but not in all cases.

          If a small business wants a website that is both functional and creative that will be mostly used by customers in the United States, and the development does not need 100+ hours of labor then it might be cost effective and less frustrating to work with a company in the states. For most companies your website is the 1st interaction a potential customer has with your product or service. Trying to save a few thousand dollars on the creative and development processes of your website can be extremely short sighted, and adjustments might have to be made down the road to appropriately fit your target demographic. On the other hand if you are a business and you need frequent manual updates or changes outsourcing is probably the best option for you. If your project is very labor intensive then outsourcing will most likely be your best option. It's up to to the business to decide what is right for them based on their needs. Get multiple quotes, review portfolios, and TALK to previous customers (if possible).

          Saving a few thousand up front can cost you millions in the long run, and spending too much money on development can leave you with very little money for marketing and attracting customers to your website.

          Vinod Tonangi
          Tonangi Media
          http://www.tonangi.com

          Video Production & Advertising Services for Small Businesses
    • Re: Does Outsourcing Make Sense in this Economy?
      WiMSSMing Newbie
      Currently Being Moderated
      I would have to say it depends on what sort of project it is and Expectations.
      As far as Good Old Fashioned Cold Calling I believe it is best left Stateside.
      Customer Service on the other hand where the "consumer" has all ready purchased a product "So what if they Don't like it"
      " It is What it is"
      http://mustang-sally-style-market-ing.blogspot.com

      WiMSSMing
  • Re: Does Outsourcing Make Sense in this Economy?
    DennisGibson Newbie
    Currently Being Moderated
    Re: Does Outsourcing Make Sense in this Economy? -YES IT DOES!!



    Shop Zip Code allows you to advertise for free targeting the right audience, people who are looking for services or products to buy.
  • Re: Does Outsourcing Make Sense in this Economy?
    Expert
    Currently Being Moderated

    franklinb:

     


    Thank you for starting a great discussion thread. And thank you, RedTieMedia and Vinod1978 for some excellent responses.

     


    Outsourcing makes sense in all economies (good or bad) depending on a company's needs, budget, size, proficiencies, and frequency of specific needs. Each company is unique and has different variables that will create the opportunity for outsourcing to help their bottom line.

     


    Just some basic examples - A large corporation may benefit by outsourcing a segment of their operation to a lower cost offshore locale or may find that they have certain activities that are ad hoc and don't require a full time employee. A small or solo-business, may not have the budget to bring on extra staff to cover key areas of business. These factors exist regardless of the state of the economy.

     


    Typically companies in the US will charge higher rates than those in Asia, south of the border or in Eastern Europe, but I agree with the complexity, language barrier issues, cultural issues, time zone issues that Vinod mentioned.

     


    I provide outsourcing services for solo entrepreneur and micro-businesses, but I know that I am not the right fit for all companies sand vice versa. I am disappointed when I am wooing a new customer that had a bad experience with a previous company because of poorly established expectations, defined goals and erratic communications. My experience has been that there are preconceived expectations for a limited learning curve that neither the outsourcing agency nor the customer do their part to establish proper expectations during the proposal process.

     


    For smaller businesses, there is the opportunity to cover outsourcing needs through joint ventures and bartering for services as an alternative to paying for them.

     


    Great topic.

     


    All the Best,

     


    Doug Dolan

     

    The Solopreneur's Guide

     

    http://thesologuide.com/
  • Re: Does Outsourcing Make Sense in this Economy?
    TraciKnoppe Newbie
    Currently Being Moderated
    I agree, outsourcing can definitely save a company quite a bit of money; however, there are affordable American outsourcing options. Even if the cost were higher than offshore, there is still an advantage to helping to reduce the unemployment rate, as an American outsourcing company is hiring American workers. If your end consumer isn't working, they will not be able to purchase your products or services.

    Outsourcing work to an American company, while perhaps will reduce in-house staff, still provides Americans with work. A win-win for America.

    Sincerely,
    Traci Knoppe
    http://yourwebtechteam.com/outsource-for-business/the-pros-cons-of-outsourcing/
  • Re: Does Outsourcing Make Sense in this Economy?
    dpeterson Novice
    Currently Being Moderated
    Sometimes I log into this forum and the topic I was just thinking about pops right up. Does outsourcing make sense... I would have to say for all of those routine tasks like call center payment processing, or tier one customer support, or even creating back links for SEO purposes then the answer is a resounding YES.

    Several of my clients are on the receiving end of these out-sourced businesses. They are very skilled at their tasks yet they focus on the types of processes that when brought up to scale really reduces costs.

    To me I can't see outsourcing creative work unless the technology gets better and you are "in the room" with the client. It won't be long until that happens but today it is still a bit difficult to get your creative point across via email. I'm sure a lot of people are doing it I just haven't come across a client that has tried to scale that type of operation.

    Two of my outsourcing clients handle repetitive processes like these:

    Call Center Payment Processing - http://www.atlantasalesandconsulting.com/BPO_call_center.htm
    SEO Back Links - http://seolinkwheelers.com/

    Since I do this all day, every day I would have to say that for my clients, and my client's customers that outsourcing companies should be looked at as just another professional, yet economical vendor.

    David Peterson
    http://www.atlantasalesandconsulting.com/

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