Clearly, I’m biased, but the answer is a resounding “yes.” For over 30 years, I’ve worked on both the outsourced agency side (for 20 years) and as a client of such providers and then managed teams that I decided to keep in-house – all in Australia and Europe. There are pros and cons, and there are timing and context to consider, but outsourcing your field sales and in-store activation tasks works – and I might be bold to add, usually works better than having your own team.
Tapping into a third-party sales/merchandising team provider offers scale. Most of the major service providers in this space will cover more than 90 per cent of Australia in an efficient and cost-effective way. This sometimes means sharing the store visits with other non-competing brands, but in essence, each brand gets its “call within the call” to ensure its share of voice in the store visit is measured, timed, and optimised. Alternatively, dedicated store visits for a single brand or client can be provided.
It’s no accident that around 70 per cent of the top 100 FMCG manufacturers (by revenue) outsource all or part of their in-store brand activation effort, covering selling, merchandising, display building, compliance work, availability, winning over and above displays, and sampling. Furthermore, the major grocery retailers themselves outsource much of their in-store work. This market penetration means that third-party retail marketing providers are experts, and executing brand activity in-store via running large field teams is their core business. Such providers have strong relationships at the store level given their visit frequency and duration, as well as experience and insight across different retailer settings and across a breadth of product categories. This all amounts to adding value to the agency-client partner through expertise and experience.
The labour market in Australia is not getting any easier to do business. Relatively low unemployment, around the 3-4 per cent mark in recent years, means that the fight for talent is a constant challenge, notwithstanding just the availability of labour per se. Add to this the increasing regulatory and legislative creep into especially casual labour employment practices, and being compliant, up-to-date, and organised in this context can be too hard for some. Conversely, this is a “day job” for the agencies, for whom running field teams is their core business.
Related to the impact of the labour market, the overhead costs of in-house teams are an increasing burden. That’s fine (albeit challenging) if you are able to pass it on to the customer (usually the retailer) in trading terms, and great if you could see a clear return on investment from your field team. It is not fine if you are just seeing exponential costs with no obvious growth or return. The worry, then, is the opportunity cost lost if I don’t carry on executing. When evaluating whether to outsource procurement and budget-holding (or not), decision-makers often omit to include not only the unit cost savings in outsourcing tasks or the increased return but also the knock-on opportunity to remove overhead costs from the support services at head office. If the budget holder for the field team doesn’t see the on cost of HR, finance (payroll), OH&S and systems that support their field team, then often the potential savings in those faculties are often overlooked. Yet savings are there to be had.
Outsourcing to experts governed by contractual relationships that surpass even the most robust of the internal SLAs of in-house teams means costs can be performance-related. Look for the opportunity for “risk and reward” style fee-related schemes to ensure a “pay for what you get” type approach, with the agency open to putting some of its margin at risk. You don’t get a rebate if your in-house team doesn’t deliver.
Finally, many of the top agency outsourced providers in Australia know that collectively there is benefit in tackling key non-competing but industry challenges together. The Activate Group is a not-for-profit, member-based organisation that enables members to join together on a collective scale to improve awareness through marketing, lobby the government, and increase the talent pipeline into the industry. Activate also runs the highly prestigious “Joe Berry Award,” which for over 30 years has been recognising younger talent involved in Australian retail and manufacturing.
Outsourcing field teams and in-store execution works very well across many fronts and mitigates against many headwinds facing Australian retailers and manufacturers.
About the author: Matt Lloyd is the MD and CEO at Strikeforce, leading the largest privately owned outsourcing field sales, retail marketing, and shopper solutions service provider to major brand owners and retailers in Australia. Within brand owners and third-party agencies, he has a 29-year track record in driving sales, share and return on investment for major blue-chip businesses by directing and inspiring big teams internationally.
About Strikeforce: Strikeforce, Australia and New Zealand’s leading field sales and retail marketing group, activates sales and marketing solutions, connecting brands and products with the right customers across all retail categories. Its integrated consultative and activation services ensure investment converts to meaningful and measurable goals.
