In-housing vs Outsourcing: Do You Keep Or Contract Out Optimisation?
Have a toolbox in the house? If so, you’ll probably have the basics – a screwdriver, hammer, adjustable spanner and a spirit level.
Fine for fixing a shelf but if you are tackling something the size of a kitchen extension, what do you do? You might have the skills to try it yourself, you might research ‘how tos’ on YouTube but it could also be a job for experienced builders, plumbers and electricians.
Yes, it’s that tough call between in-housing and outsourcing and a regular source of pressure for ecommerce leaders tasked with customer experience (CX) and Conversion Rate Optimisation (CRO). The discussion is frequently prompted by budget reviews and the need to find savings but can also arise from a new business opportunity, the need to scale at speed or changing customer behaviours and trends.
Many businesses have found the gap between expectations and outcomes can be significant when it comes to in-housing. An ISBA/Alchemist 2023 report, The State Of In-housing, found outcomes fell short across 11 metrics. For instance, Agility was a near universal expectation (93%) of in-housing but only 40% of brands felt they achieved it.
Any decision on in-housing or working with a partner agency for ecommerce and optimisation needs to weigh up whether there are genuine cost-savings or there’s more value in working with external partners. Decision-makers need to bear in mind that CRO is still a young industry and finding practitioners with more than a few years’ experience and putting them on the payroll is going to be costly.
And the word ‘value’ is important. With either choice, the value may lie in long-term payback rather than immediate gains.
Let’s walk through just some of the key considerations that can help frame decisions.
· Cost savings: in-housing seems an obvious way of making savings and we know tough budgeting decisions are occasionally required. But there’s a high upfront investment in assembling a CRO team from scratch – and procurement should hear the counterargument that using agencies can potentially deliver lower costs, as they can benefit from the economies of scale that come with spreading costs over multiple clients. This also means they might have more cost-effective access to the latest optimisation tools.
· Transparency: costs will be set out clearly when working with an outsourced partner. An in-housing decision may lead to hidden costs and false economies, a saving or advantage on paper will not necessarily materialise ‘in the real world’.
· Knowledge: with the best will in the world, it’s hard to be across all the latest developments, innovations and tools in CRO. This is what specialist agencies bring to the table – the most up-to-date information on CX and optimisation practice alongside the experts that know how to use the tools.
· Scalability: recruiting, training and deploying new staff with optimisation skills takes time and is expensive, while ecommerce moves at pace. Upgrading your team’s expertise is always a good thing for motivation and retention but can’t be done at speed, while a specific skill might only be required for a short-term. Agencies can quickly scale up or down specialist resources as necessary.
· End-to-end solutions: it can be expensive to cover off all requirements from soup to nuts in-house. Specialist agencies are equipped to offer comprehensive services from analysis and strategy development to implementation and continuous optimisation.
· Alignment: in-house teams will generally be more plugged in to the overall business objectives and can mine insights from close liaison with other departments. On the other hand, trusted agency partners can be embedded within a business and work alongside in-house teams. Crucially, they also offer that objective perspective on operations and processes insiders might not possess.
There are a lot of factors at play, including the size of your business, where your team is on the maturity curve of CRO experience and overall business priorities. The fact that 68% of SMEs don’t have a structured CRO strategy suggests they should at least start a conversation with an external specialist.
The Blended Approach
We understand every company is different and there’s no one-size fits all answer to the in-housing or outsourcing question. We do see some of the most effective strategies deployed by bigger businesses involve a hybrid model, taking a blended approach by combining internal team knowledge with the objectivity and specialist expertise of an outside agency.
This approach means a business benefits from a balance of viewpoints around optimisation strategy and can keep control when it comes to company values and practices. It also means that a partner and business can figure out together exactly which services should be handed off to the agency and which the company is equipped to handle.
Commenting on working with Eclipse, P&O Senior Digital Experience Manager Gavin Atcheson said: “It has helped us save time in development, avoid inconsistencies in output and means we can develop and deploy experiments faster, allowing us to continually drive toward iterative improvements.”
There’s definitely value in ecommerce individuals building strong relationships with trusted partners they can rely on across the course of their careers. A partner that you can consult when you need to make the big calls involving working with specialist agencies or building up in-house expertise will be invaluable
Eclipse can play a role across all these optimisation requirements: we can evaluate the tools and skills needed for your next stage of your ecommerce growth, make recommendations and even implement to help you achieve your CRO goals. For an exploratory chat just get in touch.
