Here’s the hard truth: developing a successful agency-client relationship is one of the most difficult aspects of big business. There are a million reasons why, but on either side of this hot debate, there is a key stakeholder pointing a finger in the other direction.
It’s time to hash things out. In the next 1,000 words, Deb Angilletta, CEO of Angilletta & Associates and business strategist, and Leon Grassi, Senior marketing strategist at DSM and business development professional, will be thoroughly called out, as they (attempt to) ask and answer the hard questions.
LEON: A lot of agencies offer the same set menu of various service offerings to every one of their clients. From a client perspective, is this expected? What is your opinion on sacrificing this set list of services for a customized marketing solution that is tailored to your business’s objectives?
DEB: Honestly, I don’t want a menu. Have you been to a diner lately? There are too many choices! And you know what a confused mind does? Nada. Nothing. You are the expert — tell me what to order here.
Here is what I expect from an agency. I want you to get to know my business. Ask smart questions. Based on your research, I then want you to give me the Cadillac version of a marketing plan and the Ford Fiesta version. I want to understand the range of services and what I can expect as a result of each service. Then, give me your recommendation, coming from a place of integrity. You tell me what I need. I’m expecting that will probably fall in the middle of that range we discussed. Lastly, I may want to give you a try before I buy in long term. Be sure you have a short-term way for me to get started and we can build a foundation together from there.
LEON: Deciding between hiring an external marketing agency versus using an internal marketing resource is something every business must eventually do. In your opinion, what are the driving factors that would make a business choose an agency over an internal team? Vice versa?
DEB: I think this depends on the size of the company and past marketing experiences. From my experience, an agency can be a cost-effective option. It also allows for flexibility to address a company’s needs.
Companies hire people according to what the business needs today. I knew an IT company who hired a marketing professional early on. As the company grew and needed more outreach, social media expertise and content creation, the company outgrew her. She was an event planner and was able to coordinate local news media appearances. That was all she was capable of. The company had to fire and rehire all over again. A lot of time and money was wasted. With an agency, talented is continuously managed and resources are shifted, constantly evolving to suit your business and the changing marketplace. It’s seamless. Agencies remove those instances in which a business has to break marketing momentum. It’s all a cumulative effort, right? So, why create fits and starts when it comes to your marketing? An agency is a much faster path to a business’s desired outcomes.
LEON: What do you think a company should spend on marketing annually?
DEB: I’ll give you a range. I believe 1% – 10% of annual top line revenues is the right number. However, it depends on the company, industry and competitive landscape. Further, businesses should seek to understand the speed of their results. Most times, the higher the marketing budget and with solid talent, they can monetize faster. Once again, it’s all planning, which most businesses don’t take the time to do. Calculating return on investment at each level is crucial.
LEON: How do you believe companies make the determination about budget and allocations?
DEB: Ha! I love this question. What you probably want to hear is that there is a formal process and that an allocation for a marketing budget is created each year when a company does their annual corporate budgets. Now, you want to hear what really happens? If the CEO wants marketing, they will come up with a random amount and throw it against the wall, like spaghetti, to see what sticks. If the CEO wants “social media”, they will want to be everywhere and many times, they don’t care which resources are required to make it happen. For a marketing agency, the shinier of an object you are, the more likely it is that you will win the business. That’s the truth!
LEON: How does a company justify these determinations?
DEB: On the flip side, if there is a marketing budget that means the company probably has an in-house or outsourced Chief Financial Officer. They are responsible for helping management create an annual corporate budget for the company. It’s really the CFO that creates the budget in collaboration with the CEO. I know this because that’s what we do; our firm provides a virtual outsourced CFO service for IT companies. So, we put together these numbers all of the time in collaboration with the CEO and the marketing agency.
LEON: In working with an internal marketing resource, what analytical data does a business have regarding the success of previous marketing endeavors?
DEB: Um, honestly? None.
LEON: In your experience, do most businesses have data that shows how successful marketing efforts have been in the six months? One year? Five years?
DEB: I chuckle to myself. This is a great question, but the answer is so much more basic than you would expect. You probably think there is a lot of data analytics going on in most companies. The truth of the matter is that most companies know how to manage and monitor the data for their “core” business, meaning their sales numbers. Honestly, most of the time, they are not so great at that either. As a result, they have no idea how to monitor or manage their marketing numbers. Unless a professional is steeped in the world of marketing, a business owner would have no idea the analytics involved. So, no, typically businesses have no data, wouldn’t know where to get it and even if they had data, they would not know how to interpret it.
LEON: The success of marketing is directly linked to sales and vice versa. Far too often, there is a disconnect between these respective teams within an organization and using an external marketing resource can muddy these waters even more. In your opinion, how can a marketing agency make the sales-to-marketing connection more fluid?
DEB: Agencies should incorporate this as part of the plan to interact and access the salespeople for their clients’ businesses two to three times per year. They are on the front lines of the business and no one is asking them anything. An agency can do industry research all day long, which is great in theory. Everything that is really happening, on a day-to-day basis, as it relates to sales interaction with prospective customers, makes up the meat of what an agency really needs to know. Bonus: salespeople love to talk – so just ask! This would differentiate any agency from the rest of the agencies out there.
Now, it’s Leon’s turn in the hot seat. Deb has a few critical questions about marketing agencies that won’t be easy to address.
DEB: Setting expectations is an important aspect of developing a healthy relationship with a marketing agency, but most agencies fall short. In general, what can any business expect in the first month of engagement? After 6 months? One year?
LEON: This is a fair question and something many agencies wrestle with. At the ground level, both parties need to establish the right working relationship so that it’s easier to set and manage expectations regarding all of the variables associated with a successful partnership. If an agency is afraid to ask questions or is not empowered to push back when necessary, it’s going to be tough to set realistic goals.
Having said that, the best agencies can’t tell you what an engagement will look like in Month 3, 6, 9 and so on. When marketing is being properly executed, the data is what determines the course of action. As a result, the expectations will constantly be changing while ultimately driving a variety of improvements to achieve business objectives. If an agency is transparent in its efforts, expectations should be fluid based on a collaborative discussion. That may sound a little “pie in the sky”, but that’s how we operate at DSM. Our team of marketers sets goals with clients, side-by-side. In return, clients expect that we are busting our butts to drive results, as best we can, through every bump in the road.
DEB: If a marketing agency decides to focus its efforts on inbound marketing, how do you determine what qualifies as a “good lead”? What methodologies or data is used to ensure that the leads generated are high-quality?
LEON: It’s 2018. Like it or not, people produce a mountain of data every day, as they search the internet on a variety of devices. Digital marketers can “scale” this virtual mountain and learn from the data to make better-informed decisions about how to run programs, campaigns, develop content and design websites. Quite simply, marketers can remove many, if not all, of the assumptions that used to work in marketing of old. This is one of the foundations of inbound marketing and this is what enables inbound agencies to really hone in on the right persona(s) while filtering out the waste. It’s not foolproof; we fail, but we fail fast and learn quickly, so we can improve at a much faster rate than ever before.
DEB: How does a marketing agency determine the cost of its services? What is the average cost of an engagement?
LEON: I can only speak for how DSM determines the cost of services, which I believe, is the right way. There are no preconceived pricing buckets for clients of a certain size or industry. Our pricing exercise is contingent upon the goals that a client sets forth during the discovery process. We ask a lot of our prospective clients through some pretty deep research. The output is a document that helps us determine what level of effort is required to achieve the mutually agreed upon goals. We’re actually pretty picky about who we work with. We have left business on the table when a prospect’s goals were way too lofty and they weren’t willing to compromise.
This ties back to our previous conversation about managing expectations. It’s important that our clients get what they pay for and that we find success together. Average costs vary greatly but it’s fair to say that the right marketing partnership would be a retainer-based relationship with an agency who is transparent in their efforts and the costs associated.
DEB: How does a marketing agency ensure its staff can be successful for their clients? Especially in the cases of inbound marketing, where content development and community engagement are crucial, how does an agency stay up-to-date on what’s happening in their clients’ industries?
LEON: An agency needs to walk a fine line between having people who operate on the bleeding edge but also have a foundation in the understanding of people. Knowledge, empathy and insight. That’s ultimately what marketing is all about. We subscribe to a pretty rigid process in our search for new talent. We also practice what we preach, which is why we’ve taken advantage of some great online resources that are accessible to anyone from industry leaders like HubSpot.
There also needs to be segmentation between the people who craft the strategy, the people who execute on that strategy and the people who use the resulting data to create actionable intelligence that makes digital marketing successful. I’ve seen shops who try to do all three of these things with one person and it just doesn’t work that way. They are different skill sets and we can’t expect one person to be able to facilitate all of those things while still committing the time required to understand the client’s industry. Seek out a marketing agency that has those levels, and most importantly, a solid account management team because that’s where the rubber meets the road. That’s the team who is tasked with educating the rest of the group on the industry and connecting the dots between the target persona and the deliverables.
DEB: ROI is the silver bullet, it’s the most important indicator of success but it’s rarely defined clearly. What can a client expect as a result of investing in external marketing resources? How is ROI determined? In the short-term vs. the long-term?
LEON: Sounds like I’m being asked about “managing expectations” again… Just joking. The truth is there is no reason we can’t have a clearly defined discussion on ROI in 2018 and beyond. The trick is that marketing ROI can take on many forms depending on the delivery vehicle of the effort. It can be represented by traffic, impressions, engagement, form submissions…the list goes on. ROI should be any combination of those things and a business should absolutely hold their agency accountable for something. It’s fair to say that technology has changed the game for all of us, but that’s especially true for marketing. The beauty of this marketing technology is that a client’s marketing infrastructure, when built properly, will gather data making it possible to close the loop on your campaigns thereby attributing metrics on your returns.
For example, if a prospective customer does a Google search for a problem they are having, finds a blog post the agency wrote on client’s behalf and fills out a form submission to learn more, the client now has a solid lead. Through the company’s sales efforts, the prospect then becomes a client, the automation platform and CRM have been tracking this prospect to client journey, and magic happens. The business can attribute this new customer to the vehicles and methodologies that the agency deployed.
Now, this is the ideal outcome to a successful marketing program but it takes time to get to this point. In the short term, it’s important to pay attention to milestones that will ultimately lead up to this type of success. Finally, remember that ROI is not always tied to revenue. It’s very difficult if not impossible to estimate the return that a new brand or logo will have but that doesn’t mean it didn’t have an impact. Not all “ROI” has to be measurable, some can be anecdotal or perceived but all returns need to be fairly assessed by both the client and the agency.
There you have it, folks. These two professionals from either side of the aisle have broken down the most difficult aspects of an agency-client relationship with some real talk. The main takeaway? With proper planning, trust and transparency, everybody wins.