In-House Expertise: The Final Frontier of Optimization?

house iconI recently moved from the world of consulting to the world of “in-house” marketing optimization. While my reasons for switching career direction after 5 years on the ‘service provider’ side are numerous, I wanted to take this opportunity to discuss A) why I chose to go “in-house” and B) why I believe that in-house optimization expertise should be the ultimate, long-term goal for online marketing organizations.

Why I Made The Switch

Here are a few reasons why I made the switch from service provider to in-house expert:

#1 – Continued Growth » I’ve had fabulous opportunities to nurture my skill set as a web analytics and optimization expert over the years. I’ve worked for two of the world’s premier, pure-play optimization firms and learned much from people who’ve written authoritative books and given plenty of keynote speeches at industry conferences.

But, I noticed in the past couple years that I was consistently working on the same types of projects, filed under “please optimize my shopping cart” and “please optimize my landing page(s).” There’s obviously nothing wrong with this challenging and fulfilling work, but at some point you risk being pigeonholed and stunting your own growth as a practitioner.

So, in order to continue to grow, going in-house allows me the opportunity to understand a business top-to-bottom, analyze its data at a very deep level, and optimize it in a more holistic way.

#2 – Interpersonal Fulfillment » Consulting is an interesting occupation because, while you often develop deep relationships with a handful of clients, you are still separated by the ‘client vs. vendor’ divide. At best, it’s a small gap. At worst, it’s downright antagonistic!

While I treasure the relationships I have with past partners and clients, I look forward to the deep bonds you form with colleagues when you work with them, face to face, over a long period of time.

#3 – Stability » While some are drawn to the Conversion Optimization industry for the “excitement” of forging new paths, being entrepreneurial, etc., it’s not why I chose this line of work. Despite the growth of the industry (more companies, more conferences, more practitioners), most service provider companies are small and hence unstable. My temperament is drawn to stability, so going in-house may allow more time to think about marketing optimization, and less time thinking about whether “that client we just lost means layoffs.”

Why Online Businesses Should Pursue In-House Optimization

#1 – Cost Savings » Engaging service providers, especially niche consultants, is never cheap. Nor should it be. Paying a premium for optimization services when you don’t have the skills in-house is a great idea. However, it doesn’t make business sense to outsource a practice like optimization over the long-term. While you may get favorable pricing from a service provider if you work with them a lot, you’ll still be paying for the availability of human resources.

#2 – Business/Marketing Optimization » If you engage a service provider to help you optimize your site and marketing, it’s likely the optimization/testing efforts will be focused on increasing conversion rate. This is how the service provider will gauge their success. There is nothing inherently wrong with this approach, but it is limited due to the client/vendor relationship.

For example, the vendor won’t know your marketing investments, profit margins, Cost of Goods Sold, etc. Increasing conversion rates will likely increase revenue, but revenue is about more than getting prospects to take action. It’s about labor costs, operating costs, marketing costs, margins, and more. To truly optimize your marketing, you need to work within the reality of the business. To do this, you need your optimization efforts to live in-house.

#3 – Stability » Suppose you engage the services of an optimization consulting firm. Things are swell; you’re running some tests and you like your assigned optimization consultant. Then, that consultant gets a better offer, and takes a job at a different firm (it happens). Now, you have the sticky decision of either switching service providers (to keep the talent) or keeping status quo (to keep continuity and save the headache), but not liking your new assigned talent.

Here’s another scenario. Your service provider signs a juicy, new client. They don’t quite have the cash to hire new headcount, so they’ll either a) overload your consultant, causing you to get inferior services or b) assign a new consultant, likely a more junior one with less overall expertise. Again, factors outside of your control will impact the quality of service, and likely the amount of lift you’ll actually get on your revenue.

The only way to avoid these types of “out of our control” situations is to bring the talent in-house so that you have a better chance of liking the resource, working with them over a long period or time, and leveraging their talents more consistently.

Views are Subject to Change

IMPORTANT: This post was intended to explain a point of view, not to disparage optimization service providers in any way. Outsourcing optimization services makes fantastic sense for a lot of marketing organizations, some for short-term, some for mid-term, and some for long-term.

Also, these are merely my views today, and are subject to change as I gain perspective on in-house optimization in general. Who knows, I may some day rejoin the service provider world! For now, I’m “in the house.” 🙂

2 thoughts on “In-House Expertise: The Final Frontier of Optimization?

  1. Nice post, Brendan! Echos my current thinking precisely. Developing those deep bonds over time, and by association perhaps even developing deeper thoughts over time – are both very appealing objectives to me. Congrats on your recent change in direction, and I hope your faith and optimism are duly rewarded in your new venture!

  2. Congratulations on your move and I hope everything is working out. The Conversion Optimization industry seems to be a small one, and evolving as is the entire E-Commerce industry evolves and changes. I wish more shopping cart providers would get a clue on conversion optimization.

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