Clayton Christensen, author of The Innovator’s Dilemma, How Will You Measure Your Life?, and other landmark business publications, writes about disruptive innovation. This occurs when smaller companies root a product or service in simple applications at the bottom of a market and relentlessly move up a market, resulting in the displacement of bigger companies. He states that large companies are consistently disrupted by smaller, nimbler, and more aggressive companies that attack a niche—or possibly lower end—of the market.
According to Christensen, these established companies often struggle when trying to create new markets. When they keep improving existing products to meet their best customers’ needs, they run into what he calls the “innovator’s dilemma.” By doing everything “right,” they create opportunities for smaller companies to take their markets away. Large companies either ignore these threats (to their peril), or they use their existing resources to go after these niche or lower-end segments of the market. However, because the marginal costs are greater for this new market, they often give up, or they don’t allocate their resources appropriately.
These companies often lack the flexibility, focus, and financial incentive to compete against upstart rivals. What’s more, their resources, processes, and values are in fact not designed to tackle innovation. By using their standard resources, it’s almost impossible for these companies to compete.
Companies need to find a way to unlock the process of innovation and create growth. Thus, he suggests that a completely separate division, agency, or players must go after this new market.
That’s where outsourcing your sales and marketing needs to an expert can help.
Outsourced Sales and Marketing: Case in Point
Consider this example: Company A, a large company selling widgets, sees that a small competitor is trying to come after smaller customers in its market (or even a vertical). This company could ask its current sales force to start selling to this new group. But this will fail. The sales reps will only go after the largest customers, because that’s where the margin dollars are—and where their biggest commissions lie. Plus, Company A has little expertise on dealing with these smaller customers.
A better solution is to organize a new division, under the guidance and direction of an outsourced company, to go after this segment or vertical. Outsourced partners will scope out the segment, leverage best practices, and put together a strategy of advanced analytics, marketing automation, and lower-cost resources to attack this market—all on a separate P&L from the primary company.
The initial foray into a new market segment of vertical sometimes produces a lower margin or ROI (and this is why some companies give up on trying to transform). But, eventually, when the new market is secured, margins and ROI will dramatically improve and rival the highest returns seen in other parts of the business.
The Benefits of Outsourced Sales and Marketing
Outsourced experts enable organizations to extend coverage into new markets, verticals, and channels with fully enabled teams that integrate within your sales culture (or not, if you want to change the culture)—in a fraction of the time it takes them to do this internally. But because outsourced partners are inherently flexible, resources can be deployed and shifted to test out different messaging, product sets, channels, and prices. Once a strategy is shown to be profitable, then teams can be augmented to generate ever-increasing revenues.
Partnering with a separate, outsourced company can guide an organization on the best sales approach for its target market. A company like MarketStar can bring years of collective expertise and support that even the most established organizations may never achieve. Outsourced teams provide access to unique tools, technologies, training methods, and analytics that otherwise may be cost-prohibitive or counterproductive for existing organizations. And they utilize robust, sales-specific tools to generate leads, support objectives, and provide teams with insight to see what’s really driving results.
Ultimately, outsourced teams are designed to meet the unique needs of individual organizations. Outsourced sales and marketing teams provide scalable solutions, which is ideal for organizations looking to enter new markets or verticals. Because these teams already have an infrastructure and process in place, organizations can leverage them to scale up or down as necessary.
Outsourcing your needs to MarketStar equips your organization with the flexibility, focus, and financial incentive you need to compete in an ever-changing sales environment.