How To Avoid Wasting Money When Working With A Digital Marketing Agency

The Secret Might Be In How The Agency Works With You

Selecting A Digital Marekting AgencyHaving run an agency for almost 18 years and also providing agency consulting in my free time, I am intimate with the way agencies work with clients.

Unfortunately, a lot of waste is baked into the way most agencies work with their clients.

It’s not the agency’s fault. Some of it is legacy operational thinking, some of it is bowing to clients and how they think they want to work with agencies, and the rest of it is directly related to the new technology offerings many agencies now provide.

Clients need to ask new questions. They need to look for more efficient engagement models and they need to rethink how they invest in agency programs.

Here are some very direct ways to challenge your agency to deliver a more efficient engagement and optimize your investment in agency programs.

The History Behind The Waste At Most Agencies

I hate to say it, but most agencies are pretty inefficient, and clients pay for that most of the time. To understand this more, you have to look back in time at how agencies evolved.

Most agencies had very simple billing systems. Clients used hours and agencies billed clients for used hours. Every month the client got a bill for the number of hours consumed.

This system actually encouraged agencies to be inefficient. The more they billed, the better the agency did. Agencies weren’t trying to be inefficient; they were trying to be creative, but the result was the same — clients paid for the agency’s inefficiency.

Over time agencies evolved to doing more digital work and less creative advertising (think “Mad Men”), but their operations remain inefficient. If they did a website project for you, they billed each month for the work they did. If the site took six months, you paid more than if the site took three months. Again, built-in inefficiency.

Agencies evolved, and flat fees became more commonplace. However, agencies simply passed their inefficiency along to clients in the form of flat fees.

About 10 years ago, many smaller agencies moved from project work to retainer work, billing clients the same each month and doing similar amounts of work each month. Clients liked this a lot because they capped their spend and could control their budgets. Agencies liked this a lot because it smoothed out their cash flow and created more long-term relationships with clients.

But the inefficiencies remained.

This new retainer model allowed agencies to get more clients and keep their costs flat by giving more clients to a single account manager. Today, some agencies have account managers handling 10 or more accounts.

The retainer model also allowed the agency to cap the work each month and meter out that work over time based on the client’s stated budget. This worked well for the client’s budget and the agency’s cash flow, but it didn’t work so well for the client’s results.

Clients had to wait and wait and wait, because the agency could only do so much each month. Programs were extended months (and in some cases years). Agencies got good at telling clients to be patient and that good marketing takes time.

No one did this maliciously. In fact, it’s exactly what the clients were asking for, but it didn’t serve their businesses. Clients want real business outcomes and actual results from their investment in marketing — and quickly.

These fractional agency teams are not set up to deliver results and business outcomes quickly. They are set up to manage long-term retainers and meter out work over time.

The More Clients Your Account Manager Handles, The More You’ll Waste

There is a direct correlation to what you pay in your monthly retainer and the number of clients your account manager is handling. The less you pay, the more you share the manager.

Many agencies make this look attractive. They’ll say they’re charging you $5,000 a month vs. the $10,000 a month other agencies will quote you.

But they don’t tell you that you’re sharing your account manager with 10 other companies. If you had a $10,000 monthly retainer, you’d probably only be sharing your account manager with four or five other companies.

Of course, you’d be sharing them regardless, and this is where the inefficiencies get bad.

People who are working on multiple projects at a time are jumping around every single day. They are balancing multiple balls simultaneously. They are hopping on a call with you in the morning, getting on a call with someone else at lunch and then wrapping up the day with a third meeting for a third client. This starting and stopping is highly inefficient.

No one can focus and no one can do a great job for any one of their clients. Multitasking is a myth. These account managers are just getting by. They’re just trying to get through the day without having any of their clients get upset. It is impossible to take care of this many clients and do an amazing job for them.

I know because I used to be a marketing consultant for our agency. I used to run client services for our agency. Our entire agency used to run like this, so I have some experience here.

The inefficiency, the waste, the distractions and the inability to focus on any one company means clients are paying for these inefficiencies, and they are generally unaware of it.

12-Month Retainers Are Filled With Waste

We haven’t signed a client to a 12-month retainer for over a year, and our agency continues to grow and thrive. These retainer engagements are designed to bury the waste and perpetuate it month over month.

It might feel like the engagement is gaining traction after the fourth or fifth month, but that’s just because most of the heavily lifting is done. The website might be done, the content might be out and some of the ongoing nurtures are working.

But all this means is the account manager is moving on to do the heavy lift for their newest client. You’ll settle into maintenance mode, which is the time when your account manager spends as little time with you as possible to keep you happy.

You’re paying the same but getting much less attention.

This is also where clients get concerned, because if the program is taking longer to get going (and it does sometimes), there isn’t much to be done. There’s not much more to lift. Instead, you hear a lot of this: “Be patient. It hasn’t been that long yet. It will work. Good marketing takes time to get traction.”

It’s all true, but it’s only true because your account manager doesn’t have the time to do everything needed to improve the results. Your account manager is too busy handling other requests from other clients, too distracted to really dig into your performance issues and spread too thin to really be excellent at consulting with you on the direction of your marketing.

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Having You Do The Work Could Be Highly Inefficient

Over the previous three or four years, there has been a trend to hire in-house. Companies all over the world have been building marketing departments. They’ve been hiring writers, designers, digital experts and HubSpot specialists, as well as marketing managers, directors and VPs.

Over the past few months, that trend has reversed. Those people were some of the first to lose their jobs as companies pared back expenses to manage through COVID-19.

Today, companies are looking for lean and high-efficient ways to keep their marketing machine fueled. Working with an agency is one option. The other option is to empower your entire organization to take up the marketing mantel.

Some agencies and some companies are getting their entire teams involved to write content, to lead educational programming, to shoot videos and to produce other content like podcasts.

That sounds good on paper. In fact, it sounds amazing. Getting a team of experts to create content for your company is exactly what you should be doing. But I have to ask: Is that the most efficient use of their time?

Are they writers, videographers or podcast producers? Or are they engineers, architects, accountants, software developers or manufacturers? 

How long is it going to take to get them prepared, comfortable and highly efficient enough to create all of the content you need when you need it and still do the job you hired them to do?

How much additional work to edit, SEO optimize and socialize the content is required to get the content ready for prime time?

Here’s a quick illustration:

Option A is to have a professional writer and designer work on an e-book for your company. The professional writer already knows your business and your industry, but he spends an hour with a subject matter expert to get the gist of the content. He does his own research and creates the copy. Then the copy goes to a designer who already knows your brand guidelines, standards and design specs. Then an editor reviews the piece to make sure it is grammatically correct, on point for tone/voice and in line with the agreed-on positioning for the company.

Four hours for the writer (including the interview), three hours for the designer and one hour for the editor. Eight hours total.

Option B is to have someone on your team do it. In my experience, novice writers spend a lot of time starting and stopping. They usually need an outline and then go through filling in the outline to build out the content document. Even though they know the subject matter, it’s going to take at least twice as long as the professional writer. The design time is roughly the same, and because the editor needs to look at work from an untrained writer, he’ll need twice the time to clean up the content.

Eight hours for the writer, three hours for the designer and two hours for the editor. 13 hours total.

Hands down, the first option is going to be more efficient and include much less waste. It’s worth whatever that investment would be to create the content in a very efficient manner.

You just have to know what you’re getting into, and you have to be clear with your entire company around the time required to do this at the level it needs to be done to scale a content marketing, inbound marketing and lead generation effort.

Paying For Proposals

This is another trend that we’ve seen pop up over the past few years. Part of the challenge with agencies and proposals is that clients ask for proposals prematurely. Clients screen agencies like candy, asking 10 or more agencies for proposals. They waste agencies’ time getting those proposals when they intend to hire the cheapest agency regardless of qualifications or experience.

In response, agencies have asked clients to step up and pay them for their time in preparing smart and thoughtful recommendations. I could not agree more with the positioning of those agencies and the technique to help weed out the clients that don’t appreciate good work.

But I also think it is a waste of money for clients to pay agencies for proposals. Agencies with the experience to actually help clients can quickly, strategically, thoughtfully and creatively develop recommendations for clients if their sales process is well-thought-out and by design weeds out bad actors.

I would rather earn a client’s business by giving them solid recommendations and taking them through a sales process that guides them, informs them and advises them along the way. I would rather have a client take that money and use it on strategy, consulting and coming up with breakthroughs for their business to propel their lead generation and revenue growth.

To me, paying for a proposal is wasteful.

Investing In Strategy And Getting Value For Tactics

Finally, today there is a major gap between money invested in revenue growth strategy and money invested in marketing tactics. Far too much is spent on tactics and far too little is spent on strategy.

The results speak for themselves. Many clients have stalled or ineffective programs. Many clients are complaining about the random acts of marketing their agencies are doing. Many clients don’t know why their programs are not working nor do they know how to fix them.

The solutions and the fixes almost always are found in the lack of strategy work.

Agencies that understand strategy and how it drives results shouldn’t be taking clients without an understanding in advance that money will be invested in strategy work.

This includes work like buyer journey mapping, message development, differentiation, story development, market segmentation and prioritization. It includes building out the metrics associated with what success looks like and installing the analytics to track that success. It also includes defining the technology required to create a foundation on which all of the marketing, sales and customer service tactics will be built.

Miss or skip even part of that list and you run the risk of seeing poor performance from any money invested in marketing, sales or customer service tactics.

When it comes to these tactics, today they are highly commoditized, and your agency should be set up to make sure you get a good value for your investment in these tactics. While you might be paying high rates for strategy work, you should be paying more reasonable rates for tactical support.

Copywriting, design, web work, marketing automation technical support, training, sales execution and other tactical work can be done by more people today than ever before. These people work for agencies, they work as freelancers and they work as contractors. They provide these services at very reasonable rates to agencies and to corporate clients alike.

There is no reason to not take advantage of the huge market of smart people looking to help you with tactical execution.

So much has changed in the agency world in such a short time frame. When we started the agency in 2003, we had a completely different perspective on the agency and how we work with clients. It’s all about efficiency today.

How can we quickly get clients results? How can we efficiently deliver the necessary strategy work? How can we keep the costs of tactics down so the investment in strategy is appropriate? How can we deliver a team that is intimate with our clients and focused on only one client at a time? How can we bring the best and the brightest talent to our clients regardless of their employment status with Square 2?

All of this comes together to deliver a highly efficient process that works well for every client. Clients see an increase in leads in weeks, not months. Clients see leads that move quickly through the sale cycle and become sales opportunities. Clients see these sales opportunities move to close and close at a higher rate than previously.

It’s truly a case where strategy, tactics, analytics and technology come together to create the revenue generation machine that business leaders have been searching for their entire professional careers.

Square 2 — Building The Agency You’ll LOVE!

Posted By Author Mike Lieberman, CEO and Chief Revenue Scientist

Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.

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