HOWse Guest: David Baker Reevaluates In-house’s Value

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Most of my work (through ReCourses) is with independent, small- to mid-sized firms in the marketing space. But I get asked to consult with in-house departments, such as Verizon, Hallmark, PriceWaterHouse, Whole Foods, Hartford Life, Toyota, Compassion Intl, etc. Probably 40 in all over the years.

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In some cases, I’ve been asked to “audit” the output of the in-house department to justify its existence on financial grounds. In other words, some C-level executive is questioning whether or not they should even HAVE an in-house department.

Here’s something I think you’ll find interesting: in every case that I’ve done such an exercise, having an in-house department has proven to be MORE expensive than using outside firms.

But what I want to get across is that financial exercises like this are not really the point. Sure, processes and roles can be fine tuned to put out better and more work, but building an in-house department to save money is a fool’s errand.

So, what is the primary reason for your existence if it isn’t to save the mother ship money? You’d better have a handy answer to that question or your department will continue on the slow path to marginalization, stupid requests unfiltered by money, tighter and tighter deadlines, and more implementation and less strategy.

No, your in-house department SHOULD exist for one primary purpose: because you know the company and it’s products or services better than anybody in the world. You are essentially very, very specialized…in the unique marketplace your company serves. No other agency could possibly know as much as you do about not only the industry, but also the politics and history of the company.

Now, having said that, there are some things that are working against you. For instance, experts are generally innaccessible, and you are far too accessible (spatially right down the hall, and timewise available at a moment’s notice). This puts you downstream of the “outside expert who is more objective” unless you constantly combat that in-house image.

You also don’t typically have handy ways to measure value, though a chargeback system can help in some circumstances. In other words, it seems like it doesn’t cost anything to use you, so it’s hard to place value on your services. There are other things, too, that all need to be worked through if you are to be a respected partner, knowing how much you can push back before you are no longer the team player.

But whatever you do, don’t forget that your primary reason for existence is your intimate knowledge of the client. And that should come at a price, which it does.

David Baker speaks to, writes for, and consults with the marketing industry via ReCourses, Inc. He’s worked with more than 600 firms individually and thousands of people have been through Recourses seminars.

David owns RockBench Publishing Corp., a traditional and electronic publisher of thought leadership content through which he’s authored and published “Managing (Right) for the First Time”, available via Amazon; and “Financial Management of a Marketing Firm”, available at ReCourses.

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