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Common Red Flags When Choosing An Agency

Jon Torre, Account Executive at Metric Digital

“Fool me once shame on you, fool me twice shame on YOU… and everyone else going forward”

That’s a variation on an old proverb, but encapsulates how many businesses feel when being approached with marketing services. As a provider of marketing services, the challenges become painfully clear at the onset of our outreach. To get a business to purchase marketing solutions we often must wade through horror stories of experiences with previous agencies that sound more akin to the live reporting of the Hindenburg disaster, rather than standard B2B sales mishaps.

Unfortunately, lies, gross underperformance, misrepresentation of the firm’s capabilities and outright theft are all par the course. These aren’t isolated incidents that have happened once or twice, but rather a string of multiple failures that seem to happen quarterly.

Understandably, businesses tend to blame all marketing providers for the failures of their past providers. In attempt to minimize their risk, businesses often look for the wrong things when considering a new purchase. You, the business owner, must cut through the noise and that starts with identifying red flags when deciding who will provide your paid advertising.

Our goal is to make the experience of working with a marketing agency transparent, productive, and performance oriented. Surprisingly, that is not the norm in this industry. By outlining a few red flags, we hope to help you avoid an agency horror story.

Red Flag 1 - SaaS Platform

SaaS based marketing platforms typically use an “algorithm” to bid on keywords. The companies that offer these products came into prominence over a decade ago and at face value appear to be a viable option, particularly for small businesses due to the relatively low price point. The sales reps these outfits employee often read from scripts, rarely consider the prospects needs, and regale their would-be prospect with past client success stories. Your sales rep here most likely doesn’t know the difference between the organic and paid section, but has a set of pre-canned lines handy if they need to make that distinction.

These companies rarely deliver results, as they are more focused on new account generation rather than servicing the existing client base. They don't really manage your account; they group you with hundreds of similar clients, all using the same strategy, and then go on auto-pilot.

Churn here is high, but a business with this model survives because they can always add more clients due to their large sales force. Automation and technology will continue to transform this industry and have value, but when during talks you must look hard at the company and the sales process to avoid the same mistakes. Just getting a hard sell, only to then be put on an autopilot program and ignored once you buy, is not the answer.

Red Flag 2 - Contract Length/Price:

Once a business has had multiple bad experiences with marketers, price and contract length tend to be scrutinized and incorrectly evaluated. Burned buyers tend to look in the wrong direction; viewing the shorter contracts and cheaper price points as a plus.

Generally, most quality marketing company worth their salt will want to enter into a longer-term agreement with you, typically three months or more. This type of agency is taking the longer view, rather than a short-term and inevitably short-lived pay day.

After a few bad experiences, it’s entirely reasonable to want a month-to-month contract to minimize risk, but typically these don’t play out as promised. It takes time, skill and patience to effectively launch a paid campaign that produces consistent returns. There’s a lot of work to do in month 1 of an agency contract, but in a month-to-month contract you incentivize your agency to spend disproportionate time and effort convincing you that things are moving in the right direction instead of building a foundation for sustainable, profitable growth. 

Conversely, super-long contracts are not the answer either. Locking your capital up for that length of time is dangerous because it fails to create any urgency on the part of the agency. Even if they ramp it up in the latter half of the contract duration, why tie your money up for a year what may be four months of quality work?

You want terms that are reasonable; ideally three to six months. It signals that you are serious about your marketing and are giving them a reasonable window to perform. That way the agency will move with alacrity in getting results, but it’s not so short they turn out subpar, thoughtless work, nor is so long that they procrastinate doing the work until they need to.

The same goes for price. If a marketing agency is willing to cut to bargain basement levels (under $2K/month), their pricing is either grossly inflated or the real management cost is so small that there probably isn’t any skills-based management going on at all. The pricing of the services should reflect the overall value of the services. It’s best to do some comparative shopping and if your being offered pricing that seems too good to be true, it probably is.

Entering into an a slightly longer, pricier agreement may take more consideration, but is the best way to align incentives. It forces your agency to put in their best work, yielding you a better ROI, and in exchange the agency gets a consistent and healthy balance sheet. This is the best type of agreement to keep both parties vested in the success of the campaign. It’s the equivalent of telling the agency “there’s more where that came from.” Now they must earn it.

Red Flag 3 - A “Guarantee”

The request for a guarantee is probably just as old as sales itself. You will very seldom here a sales rep introducing a “guarantee” into the process. However, many buyers request one throughout negotiations. It’s typically a last-ditch hedge against the mistakes of the past.

A guarantee sounds great in theory, but in practice very few respectable agencies will take on a client by offering them any form of a guarantee on return. In reality, an agency simply can’t know performance before they start doing work, making a true guarantee too costly to build a business around. There are a million factors that affect performance, most of which are out of the agency's control. Companies that offer a guarantee need that guarantee to win business.

While projections based on past results are reasonable and should be readily provided, using a money back “guarantee” as a form of protection causes more harm than good. In most cases, the provider will try to create the appearance that their end of the agreement was met. Keep in mind that the provider has tons of tools at their disposal to massage the numbers in their favor – is the guarantee based on numbers in Google Analytics, Facebook, your back end reporting? Is it based on first click attribution, last click attribution, viewthrough attribution, 1 day attribution windows, 7 day windows, 30 day windows? You get the picture. Whether they resort to inflating the numbers, avoiding contact, or creative accounting, you won’t be getting the accurate data needed to augment growth through your marketing efforts, making the partnership one big time suck.

Once the agreement is terminated, too often you will not be able to recoup your money, nor your time, leaving you at square one in search for yet another provider.

For more philosophizing on the guarantee, see this clip from Tommy Boy: https://www.youtube.com/watch?v=mEB7WbTTlu4

While the red flags outlined here may seem obvious, they are also the most common ones ignored. Watching out for these should help to improve your evaluation process. If you buy with these red flags in place, I “guarantee” you will be “burned” again. Just don’t blame the next sales rep that reaches out.

Love to hear your thoughts on how you evaluate marketing services. Think these seem accurate? Agree, disagree or think I missed something? I would love to hear from you at jonathan@metricdigital.com.

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Jonathan Torre Account Executive, Metric Digital The Metric Digital Blog A Blog on All Things Digital Marketing