Let’s Hire a Marketing Agency
So you are thinking of hiring a new marketing agency? If you're a marketing leader in the process of hiring a marketing agency, but you're not sure what kind of contract you'd like to sign, consider the points in this article before you make your choice.
Before we start, many know that I owned my own agency for four years, conducting interviews and presenting my agency to be hired countless times, so one could say I have experience from both sides of the table. I now work for a large B2B company, and we have outside agencies, so I’ve had to use my skills in hiring and firing an agency.
Marketing leaders spend too much time wondering whether they are getting burned by their marketing agency. But as someone who has worked in agencies on the agency side, I can tell you that marketing leaders are the ones with the most influence over that. It comes down to communication.
Business relationships usually fail because of a lack of communication, not a lack of results. So even if you select a creative agency with a shining reputation that can churn out precisely what you're looking for on a deadline, that doesn't always translate into a great working relationship.
If you think the agency you've hired doesn't understand your business and therefore makes for a lousy partner, don't rush to judgment: The onus is not solely on them. Like all business partnerships, working agency relationships are a two-way street.
You hired the agency, so your neck is on the line in upholding that agency's reputation. You've also paid the agency to do work for you, and you don't want to blow your budget. So go that extra mile and communicate effectively. It will help you get the most out of your money while also respecting the agency's creative reputation.
Hiring a marketing agency starts with your KPIs
Your goal and your KPI-based statement of work (SOW) must be aligned. You should understand each of your KPIs and have goals associated with each one before hiring a marketing agency.
As the in-house marketing leader, it's your job to know exactly what you want from an agency before signing on while also ensuring that your SOW is flexible enough to include expert suggestions of the agency you're trying to work with.
When onboarding an agency, ask questions and listen carefully to see whether the agency can accomplish what you need.
Pin down the following before even reaching out to an agency:
Benchmark marketing numbers relevant to the project or goal (traffic, CPA, closing rates, etc.)
A set budget
What a successful partnership will look like 12 months from now
A scorecard of essential factors for your organization to reference when hiring an agency (performance, reliability, cost, contract length, etc.)
Should your contract measure hours, deliverables, or goals?
As you speak with agencies, they will share their preferred method of accountability: hours, deliverables, or goals.
When hiring a marketing agency, consider that you should work with the agency's strengths while remaining aligned with your own situation.
An hourly contract usually works for smaller budgets and companies that want to test the waters with an agency.
Deliverables make sense if you possess the skills but not the resources to meet the task at hand.
And goal-based deals work for businesses looking for solid results and a creative partner.
When you understand the nuances and advantages of each scenario, you can determine which situation will be most beneficial to your agency relationship.
1. Hourly Rate-Based Contracts
Hourly contracts are significant if the agency you're working with provides you with a quick feedback mechanism on hours spent; otherwise, it can be pretty easy to go over budget.
If you need quality work done on a deadline and you find an agency with a reputation for completing that sort of work hourly, you could benefit from this kind of agreement.
Hourly contracts can also be suitable for smaller-scale projects for which you need additional help to reach a clearly defined goal.
However, remember that agencies hired for hourly work typically aren't held accountable for results.
2. Deliverable-Based Contracts
If you want the agency you hire to be accountable for a project's tactics and results, you might want to go with a deliverable-based contract.
These contracts can be significant when bandwidth is your primary issue. If the work you need is the kind you usually oversee at your company but need extra creative firepower, or if you're time-constrained and need that extra bit of "oomph" to get you over the finish line, consider a deliverable-based contract.
Another reason for signing a deliverable-based contract might be that your team doesn't have enough historical data to create a reasonable goal, so you're just looking to get the project done on time and budget.
However, deliverable-based projects often come with a lower chance of success because the agency is required to deliver on a project basis—not integrate themselves into your team's framework or help drive your marketing strategy as a whole.
3. Goal-Based Contracts
Goal-based contracts are usually the route that brings long-lasting success. They allow agencies to have more skin in the game.
That said, goal-based contracts are almost always more expensive but almost always more successful than deliverable-based contracts. Goal-based arrangements are great if you're leading your marketing into new terrain and therefore want to partner with an outside agency to build a new strategy from the ground up.
Consider a goal-based contract if you're looking for a partnership in which you and the agency share accountability for strategy and results.
Goal-based contracts are also beneficial if results and partnership are among your priorities and you're looking to build upon a reliable source of historical data to target either new or established goals.
Think of this relationship as your taking the suggestions of an external yet equal department within your company to drive growth. When you sign the contract, you're forming a partnership.
Communicate your needs, set measurable goals, and prioritize feedback
You'll always get the best results by communicating your goals from the outset. You wouldn't go to a barber and say, "Go for it," so why would you hand over that amount of creative license to an agency?
The best way to get the most out of an agency partnership is to treat the agency as you would members of your own team.
Whether the partnership is for the short term or the long term, it's best-practices to ensure the agency you hire is always highly aware of your company's direction. Better communication means better creative work.